Cost of Transferring Your Rental Properties To Corporation

If you own your rental properties in your personal name and have been wondering about the cost of transferring them to a corporation, this video is for you.
There are four (4) major costs you would incur when you transfer your rental properties to a corporation, and in this video, I dive deep into each of these costs to help you make an informed decision.
If you have any questions or thoughts after watching this video or need help setting up a corporation, leave a comment below, and I’ll respond as soon as possible.
#RealEstateTaxTips​ #RealEstateInvestors​​ #CanadianInvesting​ #corporation #taxes #Canadiantax
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DISCLAIMER:
Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your own legal and tax advisors to ensure you get the advice you personalized for you.
The information contained in this video is for general information purposes only.
The information is provided by ECRB Consulting Inc., RealEstateTaxTips.ca, Cherry Chan Professional Corporation and Cherry Chan.
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[@hilairetucker]

Clear and concise so I subscribed. Thank you!

[@RealEstateTaxTips]

Thanks for the sub!

[@zaka9169]

Just wanted to say thank you so much for this video it answered a lot of questions that I had !!

[@RealEstateTaxTips]

Glad it was helpful!

[@helenlenniecounselling1024]

Thankyou You are very clear

[@RealEstateTaxTips]

Glad it helped

[@fi_high]

Great tips! Please do make that video about owning a property in trust to avoid land transfer taxes!

[@RealEstateTaxTips]

Great suggestion! I have been bugging a real estate lawyer to go on my KZbin channel to talk about trust agreement & land transfer tax. Stay tuned.

[@rupeshacharya402]

Thank you for video. Can you confirm if the cost #1,2 and 4 are income deductible after the property is transferred to corp.?

[@kelsieleavitt4717]

Thank you for your informative content. One question- you mentioned at the end even if you are due for a refinance you would still be charged a mortgage penalty when you transfer into a corporation? If your term is up with the bank and due for a refinance, there should be no penalty , no?

[@yeonsuchoi1721]

Thanks for great videos. With all these cost you mentioned, when is it still tax beneficial to transfer personal property to corporation?

[@RealEstateTaxTips]

Good question! It's not an easy answer. Everyone's individual goal is different, for majority of people, it does not make sense to sell the rentals to the corporations. If you want to get a definitive answer, the easiest way is to setup a consultation with our team to get better advice based on your personal situation.

[@nakulgirme6871]

Hi Cherry thanks for the video what is the form for election after taking the proceeds of the sale of investment property to corporation As I have registered a corporation under a operating business I bought recently and chose to purchase land and building with the proceeds under the corporation name I have also refinanced another investment property and took the proceeds to pay for the same ( the operating business under corporation now does not carry any mortgage and is fully paid )

[@chestervillabert3704]

Hi Cherry, we just purchased a pre-construction condo under our personal names. The closing hasn't happened yet, can we still transfer the property to a corporation without paying the land transfer tax and capital gain tax?

[@vivianmichael7830]

Thanks Cherry for the good information. On #2 - capital gain tax, can I assume that if the trust agreement has been in place, this will be an non-issue given it would have always been reported under the corporation since inception. Or is there more to it even with the trust agreement?

[@RealEstateTaxTips]

Yes, if you have the trust agreement in place and everything has always been reported in the company's name AND that the transactions are going through the company, you likely can avoid land transfer tax. :)

[@vivianmichael7830]

@@RealEstateTaxTips Thanks for the reply. What I would like to confirm is on the capital gain tax. Is it also something that can be avoided?

[@tuonglaitretuvangiaoduc3400]

Thank you for sharing. I told my lawyer to do the trust document but she said She wanted to know what trust document she should do as it has a lot of trust document types. Please advise me which trust document?

[@RealEstateTaxTips]

Its a conversation with your accountant and your lawyer. All the best.

[@alvinyau12345678]

Thanks for the info. Is it better to use a corporation to buy a preconstruction instead? Thanks.

[@RealEstateTaxTips]

Hi Alvin, it really goes back to your particular situation. Depending on what your investment strategy is with these pre-construction condo, sometimes it is better to buy them in the corp. Sometimes it is better to buy them in the personal name. Feel free to download our guide on RealEstateTaxTips.ca to get a better understanding.

[@vidanueva2540]

Thanks for the information! I'm separating. I will probably transfer investment properties to my name, what are the advantages to transfer them to a corporation instead?

[@RealEstateTaxTips]

There're many advantages to transfer the properties to the corporation, but most of them wouldn't apply to you. Transferring between spouses that are separating in Canada is tax free. Transferring to a corporation at the time of divorce makes it a lot more complicated and costly. Be sure to consult with someone that understand this area of tax before you make your decision.

[@nickminiov8428]

Hi Cherry, We are planning on purchasing a property and renting it until we can move into it 4 years from the time of purchase. At that time we plan on selling our principal residence, paying the mortgage on the rented property, and using this as our princilat residence. What tax implication will this have? The rental property is purchased by my son and me.

[@RealEstateTaxTips]

There would be a taxable capital gain eventually when the new property is sold, provided you file a section 45(3) election. I would recommend scheduling an appointment with my team to review your situation in more detail and provide you a more detailed answer.

[@elaineJJ]

If I own a airbnb property under my personal name, should I register hst under Business - Sole Proprietorship?

[@RealEstateTaxTips]

Chances are you need to register for a HST number in your personal name - depending on your revenue

[@raymondspencer3332]

Would be interested to understand implications of doing rental business as individual renting out under 10 condos in Canada while living in Bélize or Singapore for example

[@RealEstateTaxTips]

Thanks Raymond. We generally don't get into non-resident's taxation as it can get quite complicated. We will keep this topic in mind for future KZbin videos.

[@raymondspencer3332]

@@RealEstateTaxTips Thanks for your reply. I did sign up for a paid session with you on Wednesday on this exact topic. If you can’t help it would be good to get a refund and cancel the session.

[@jawadaboucha8266]

Hello. Is it possible to put the rental income into my corporation when this rental comes from a property that under my personal name?

[@RealEstateTaxTips]

Possibly. Depending on your situation. We routinely have this type of consultation with our clients to map out whats best for them. If you are interested, feel free to reach out to our office at [e-mail] or call us at 416-548-4228 to schedule a consultation

[@JAGDEEPsingh-vi3xi]

Great info. Can I transfer my principal house to corporation name. I am purchasing a new property which will be my principal house and the current principal house I want to make it as an investment property and transfer the ownership from my personal name to corporation name . Can I do that ?

[@RealEstateTaxTips]

Of course, the only catch is that you would have to pay land transfer tax at current market value at the time of transfer.

[@JAGDEEPsingh-vi3xi]

@@RealEstateTaxTips Thanks Cherry

[@watsss]

Can you file an election for multiple properties? Does it all have to be done at the same time or could I do one property now and another property later?

[@RealEstateTaxTips]

Tax deferral election can be done together, or separately. You don't have to them all at once.

[@watsss]

@@RealEstateTaxTips Thanks!

[@nadeemlakha8509]

Can i use my parents to manage my rental properties in canada and pay them as a company ??

[@RealEstateTaxTips]

Hi Nadeem, Thanks for reaching out! Although I'd love to advise, unfortunately I won't be able to do so before knowing more about your personalized situation and all the factors. For any questions or consultation, please contact our office at 416-548-4228 or email us at [e-mail].

[@rosymitt]

If a person has more than1 corporation in their name, is it possible to transfer money from one corporate account to another tax free? It's so hard to understand about corporation.

[@RealEstateTaxTips]

Typically inter-company transfers are tax free if it is done as a loan.

[@cathyjose]

hi, i bought a property for my flipping business, then i opened a corporation, my lawyer suggested that instead of transferring the land title, we do the bare trust agreement, where I hold the property in trust for my corporation, is this possible? and if yes who is going to file the tax? Is it the corporation? thank you

[@RealEstateTaxTips]

Yes it is possible and the corporation would report the income

[@cathyjose]

@@RealEstateTaxTips even if my corporation is opened after i bought the property? thank u

[@cathyjose]

hello, please follow up

[@RealEstateTaxTips]

@@cathyjose have a conversation with your lawyer and determine the risk involved. It also goes back to the timing of your corporation. Best is to have a sit down conversation with a knowledgeable real estate accountant to advise you on the risk involved. As always, if you don't have an accountant, feel free to reach out to us at [e-mail] or call us at 416-548-4228

[@rh315]

Why transfer to a corporation in the first place ?

[@GeorgeOrwel]

so wait, you have 11k subs and a guy like logan paul has millions ? you bring more value than those bozos. my goodness