Thank you, thank you, THANK YOU! We just hit 10k subscribers on our CZcams channel and couldn't be happier. To all of you who have supported us along the way, thank you for your views, likes, comments, and shares. We couldn't have done it without you. We're committed to bringing you even more amazing content in the future that will help you achieve your real estate investing and tax goals faster. So, stay tuned for more exciting stuff from us! We can't wait to see what the next 10k subscribers will bring. Once again, thank you for your support. You guys rock!
I have learned more from this channel then I ever did in school or by talking to my financially literate friends. The education you put out is incredibly useful and a great primer for educating your clients before they hire you. You're content is valuable and appreciated and I know it's not easy to make. Keep going!
Thanks for the explanation. I’m familiar with most of what you are speaking on. I’ve been a landlord for 35 years and I’ve worked the system to my benefit.
I highly recommend Cherry, I have been a customer of hers for several years and she knows her stuff! I knew she was the one after only one question that all accountants get wrong, she answered it correctly and without a thought. What is your number one expense in life? She will now know who I am as I don’t use my real name on line. Thank you for the hard work you do
Thank you for your video! The government punishes hard working people for being successful its a darn shame! Work hard, make a good wage and get punished by the outrageous taxes in Canada! It's disgusting!
So from your experience and perspective, for those who have a 9-5 job - and planning to engage in real estate and acquire properties for rental income for the long term - which would be the most ideal ownership structure to get the most efficient tax advantages etc.
I want to thank you very much. You are right it is very confusing but you made it really easy to understand. I am in Nova Scotia and an american so I will have to delve further into this but I wanted to say thank you and I liked it and am a subscriber.
We are renting out our personal home here in Manitoba for the first time. if it works out without to many issues and there is potential profit, should I let my wife take that profit as income because she doesn't currently have income and mine would just increase my income. Thanks for the information. New to your content.
Thank you for the thorough coverage of the subject. There is one question I have that wasn't covered. If an individual has been renting his property for 15 years and on the 16th year he suffers rental income losses (repairs and rental defaults exceed income) and now on the 17th year his daughter moves in rent free. Now on the 18th year he wants to sell the property. How does the profit from the sale be taxed?
Sounds like you have a specific tax question. Feel free to talk to your accountant or if you don't have one, feel free to call our office at 416 548 4228 to schedule a one on one consultation
This was way more than I could learn anywhere else combined. Thank you for your detailed information. It would be great if you could offer investment and or rental property portfolio strategy consulting.
Thank you so much for your reply, Would you do a complete video converting an owner occupied multiplex to cooperate level and how taxes work? It will be a very helpful video..........Thank you so much for your videos........
Hi Cherry, Me and My wife just bought house and its our primary resident, we are renting my basement and we both work full time. I will declare that to the CRA but my question to you that is, will there be a capital tax gain when I will sell the house or any other extra charges then a normal primary resident sell ?
Hi Cherry, if you make about $70,000 in rental income before any deduction, is it better to consider registering a company for Tax purpose? What are the additional expense deduction you can make under a corporation and what kind of company should you register?
Thanks a lot Cherry for this informative video. Had a question Can I gift my rental income to my college going son for his tuition fees without any tax implications?
Hi. I was wondering if you have a rental income and a CPP pension coming in, how does this affect the Tax rate you pay. As someone reaching older age, I am trying to plan my income stream. The high cost of living is making me consider renting out my property, and living somewhere else. If I have a rental income coming in, what percentage would impact my pension? I am considering visiting a Tax professional for consultation. Thank you for this video.
If I will only gross 8,000 per year on rental income for 3 or 4 weeks of rentals, i wonder what taxes I'd pay. Factor8ng in capital cost allowance, if there is a $160,000 mortgage and $6,000 in utility and insurance costs and negligible.maintenance costs during those few weeks. I'd love to see some calculations in your presentation on owners just making a few thousand dollars per year
If someone expects to have less income in the future (say in retirement), does using CCA make sense during the earlier high income years? Recapture in the future would only be charged at the future marginal tax rate, which should be lower. Could be an interesting way to defer taxes, though if the capital gains during a sale are sufficiently high, you might just end up being in a high marginal tax rate anyways. Does that make sense?
Yes absolutely. If you are making high income today, and you are expecting to continue to make high income even when you're retired, then you might as well take CCA. A dollar in your pocket today is worth way more than a dollar in your pocket 10 years down the road during inflationary period.
I’m not sure about the mixing of reimbursement of the rental income losses on employment tax. In my case what happened that CRA didn’t mix these two sources of income and only carried forward the losses from rentals to future years but didn’t take it into account to deduct from my employment income tax. This didn’t also apply to cases when you are employed but you have losses from your sole proprietor business. Are you 100% sure you are correct cause if this is the case, then the federal and provincial government cheated me.
Hello! My husband and I are Canadian citizens, and we plan on moving to SE Asia for the first 5 years of our retirement. We still hold a mortgage and plan to rent out our primary residence to cover the costs of the mortgage/taxes/insurance while we are away. We also plan on returning to visit our family every year for a couple months at a time. We will only have our CPP OAS pensions supplemented by our modest RRSP/TFSA. My question is, do we need to hire an accountant or just continue to have our taxes done by our local tax service company? Any insight would be appreciated. Thank you in advance!
Hi Cherry, Is there a max on how much mortgage interest can be claimed? For example if 50K of mortgage interest was paid during the tax year, can all of it be claimed? When that number was applied to T776, the T1 return generated an abnormally high tax refund of 6K. Is this normal (given the high housing interest rates of current time)?
I really appreciate your content. Unfortunately I think the video skipped ahead and missed the REIT tax explanation. I am very interested in the REIT explanation, as well as a Syndicated investment for both a Canadian Corp investing in US properties, vs a US Corp REIT or Syndication for Canadian investors. I currently have some capital invested in the US in both structures, and not fully sure of the tax advantages or pitfalls of one over the other. Except obviously a Canadian Corp will issue proper CRA year end forms, vs a K-1 from US companies. We (my wife and I) already have ITIN numbers set up from previous investments. I am concerned with getting double taxed if not properly set up, or the incorrect structure used. I hope you can elaborate in laymans terms. I look forward to your response or future video explanation of each. Thank you.
if the sale of the primary property in less than 365 days occurs loss, would this be business loss? so we can deduct it from the personal income? I am assuming no tax on the sale then. Thank you.
In case we rent out the basement of our primary residence and declare rental income as and when earned. When we sell the property will we be eligible for primary residence exemption? (as long as we meet three criteria of not making any structural change, no CCA and rented portion smaller than our area)
Does not work for everyone.. what about people who has only .. Your explanation is great and clear but CRA is not doing it that way for everyone especially an amount way above $30,000..
Hi If i buy an other property from the sale of investment property capital gains and move in as principal residence. Do i still have to pay capital gains? I am planning to build a rental unit in that house as well?
Hi Cherry, Thanks for all your content. I am going through your book and have a question. Let's assume I pay $20k(including HST) as current expense for my rental property (in my name) and so my property has incured loss of $20k due to repairs this year(considering rent collection and cost of managing property is breakeven). Can i deduct full $20k against the taxes i paid in my full time job and receive a refund of $20k when i file taxes?? Thank you.!😊
If my rental income per month $2000.00 and my mortgage for that property is $1800.00. My net income is only $200.00 I suppose that I need to file taxable income is $200x12 =$2400.00 Am I right?
A loss incurred from the sale of depreciable property, for example a vehicle, would be considered a terminal loss. There are specific rules regarding this and I would recommend you schedule a meeting with my team to review your scenario.
Thank you! Always learning something new watching your videos. What would be the tax implications if the rental income of one property is used as a down payment to purchase another investment property? Could that amount be claimed as a dedcution? Thank you in advance.
@@RealEstateTaxTips Thank you. And, let's say, I were to refinance my primary residence then shortly decided to rent it out, would all that interest be deductible?
Hi Cherry, great video as usual! I’m curious to understand what happens if you own a rental property portfolio with negative cash flow but don’t have any job income or your job income is less than the amount you loose on your rentals. I guess you just take the loss because there is no way to offset it. In that case, would it be better to own that in a corporation or is it the same? Thanks
Hi Cherry, thank you for your video. It’s very helpful. I have a question and really appreciate if you can help me out here. A few years ago, I refinanced my primary home and used those funds to buy a rental property (so the rental property is fully paid out). Like you mentioned, if the primary residence is refinanced, and those funds are used for the purpose of investment, then the interest from this rental priory can be tax deductible. I want to refinance the rental property to buy a second rental property, would the interest from the funds I used to buy the second rental property also be tax deductible? Probably yes. My main question: Will the interests from both rental properties be tax deductible if I bought my second rental by refinancing the first rental property? Thank you
Yes you would be able to claim the interest from the refinanced property provided the funds were used to acquire a property from which you earned rental income
Hi Cherry, if I someone has a property co-owner with her sister 50/50, the younger sister has been letting her older sister to collect and report 100% rental income for over 10 years just to help her out, now if the younger sister wants to switch back that 50% rental income to her if that is possible ? The property has been co-own since they bought the property. If this is possible, then what do they need to do? Thank you
Hi Cherry, thanks for your videos. I incorporated my business for IT Consultancy and decided to buy presale properties through my company and flip. Do I need to create a holding company to own these properties or is my operating company sufficient to own these properties and pay capital gain tax or business tax.
This is a bit of a personal preference based on y our risk tolerance. It also depends on how much you are investing. For tax purpose, it might have some differences. Make sure you consult with your accountant, and if you don't work with one, we're always here to help.
Hi Cherry, If rental income is taxed at 50% in a corporation, and if it's under personal name and taxed below 50%, what would be the benefit of having it in a corporate structure?
I would recommend that you schedule a meeting with my team to review these points more in depth as there are many factors that need to be considered when investing in a corporation.
People are renting rooms in Canada and are losing their Pension Income because they are trying to pay their high Mortgage renewals. They are also complaing in the way they are taxed also on their property tax. the larger portion of the property tax comes at the begining of the year with overdue payment and interest traffic infractions added to your property tax without any notification by just looking up your name through your licence plat. This is also from another city.
I'm not aware of traffic tax that you mentioned. My own experience with property tax is that we pay the same amount as prior year but prorated for the first half of the year, you pay the increase in the second half of the year... a bit different from you comment.
Hi Cherry, would it be better to create a corporation for the short-term rental i do with my home? Can i charge the corporation rent at market rate and pay myself? Would CRA allow this?
I would recommend you schedule a meeting with my team so that we can better understand your situation and provide you the correct advice relevant to your scenario
Are there any options to claim income tax relief on the rental payments? Say a home owner has to rent out their property and move to another location and rent a property, will they get any tax rebate on the rental they will be paying?
You gotta compare how much you're receiving as rent, vs how much you're paying as deductible expenses. If you have a loss, you may be able to offset the loss against the employment income, which may trigger a tax refund
Thank you for your video. When you refer to net rental. Do you only pay taxes on the amount after your mortgage payment? Therefore if rent is 500 and mortgage is 400, the net taxable income is only 100? Or are you taxed on the full rent. And furthermore, you can deduct off that with other house related payments? Thanks in advance.
mortgage interest is deductible but mortgage principle is not. Typically in Canada, your mortgage payment is a blended payment between interest and principle paydown. So only the interest amount is tax deductible
@@RealEstateTaxTips but when you claim your rental income. Does all of the rental amount count as income (tax deductible) or just the delta between what your mortgage costs and how much you received in rent?
Thanks for the video. If I bought a property with the intention to rent in Oct 2021. I did some minor repairs, and pay utilities, advertising etc .But did not get it rented until Feb the following year. How do you report in the tax year of 2021? Thanks.
The costs of the renovations/repairs from the date of purchase until the date rented would be considered a "soft cost" per CRA and added to your purchase price of the property. As such there is nothing to report in 2021 as you earned no income from rent until 2022.
HI thanks for the video! I got that I cannot make a bigger lost with CCA, but can I use CCA to lower my income to 0 and then with interest, property taxes and others that you explained in other video "top 10 tax deduction", make a loss ? E.G I earned 10k in rentals, with CCA lower to 0, and then claim 10k interest + 3k in property taxes to make a 13k lose ?
You cannot use CCA to create a loss. The sequence of deduction matters. You'll deduct interest, property taxes first, before you are allowed to claim CCA
Hi Cherry, I’m one of your subscriber, I’m learn a lot just by listening to you… I have a question, I have this rental property in Regina, I acquire 2008, it was rented ever since I bought it. My question is I bougt it 15k , now I remortgage for the amount 135k… I’m planning to sell it now but price in this province is very low ,my mortgage is higher than the amount if I sell. Pls. Advice me what to do
Wish I would know what I could do... I don't have a magic wand unfortunately. If you were to sell it, you would have to pay taxes plus the mortgage amount. If you don't have the cash available to cover these, you might not want to sell it in the short-run.
Would you do a complete video about advantages of converting a property to a S cooperation please ? Explanation Is too fast, there are difficult words to understand and I am a new comer in real estate........Try to be slower with simple explanations please........
Hi how do rental taxes work if your salary is above 150k. I heard that you cannot claim net rental loss once you go above 150k salary. Also great channel very informative.
@@RealEstateTaxTips they charged the income of the person paying the rental, the person who owns the property pays taxes and property taxes and when they purchased it, and when they sell it, just saying this is another layer I was not aware of. I assumed if you paid for a rental permit that was it.
I have learned one think , rent only in Canada and invest outside it's much more healthy ....the Tax in Canada is a black hole that sucks every dollar.
Landlords have no support when they get a bad tenant, and start losing a lot of money because they literally can't evict them fast enough, yet the banks, insurance, and the taxman certainly will not wait for you !
We do incorporation webinar every quarter. You might want to join our next one to get a better understanding on whether you should setup a holding company or not.
@@RealEstateTaxTips Sure how do I join? Would you also talk about that if I decide to go open a holding company I will not be able to use RRSP and FHSA?
Hi Cherry, I am foreign buyer & I bought one condo in vancouver for my son in 2014, and stayed there with him, & full family till date, now he has bought his own house and I want to sell this condo, what is tax implication to foreign buyers, or if I rent it out and later when the condo prices are high sell it say after two years, what will be tax implication then, both the cases are same or different? Also, how much tax do a foreign owner has to pay on rental income (I have no income in Canada)?
Thanks for such an educational video! I have a quick question: If I fund my own personal corporation money (seed money), say 50k, can I deduct 50k from my own personal income tax? So if I earn 100k annually, does it mean I only make 50k the year I seeded the money? Thanks in advance for your advice and input!
If you fund it, it's called investments (either in loan format or share investments). Unfortunately you cannot write it off against your personal income.
@@RealEstateTaxTips thank you for your response! I hope I can be your customer in the future since you're from Oakville (I'm in Hamilton). Is there an email which i can contact you to schedule a future appointment?
Hi. I just bought a rental. I will only earn $2000 for the year due to not acquiring property until November. But in order to rent property, i had to spend $5000 to get the property in order. All expenses are wear and tear and not capital expenses such as replacing the roof. So i am at a loss of $3000. Does this come off my income as a bad debt?
Expenses incurred to get the house ready for rent is generally considered capital expenses - you might want to revisit the CRA website to check whether your expenses are truly wear and tear
HI, I am going to rent my 1 bedroom out of 3 bedroom condo principal house soon. is it going to be same for that as well? or its different bcos renting room will be considered paying guest ?
Hi there, question about the Co-owner %. I'm in a higher tax bracket than my spouse, but we co-own our rental property. We incurred a net lost on the rental property in 2022 and will likely continue to until interest rates go down. 2022 is the first year of this investment. I'm thinking of assigning all the net loss deduction to my return, do i still have to report the rental property as Co-ownership and set it at 99.99/0.01? or 100/0%? Or do I not report as co-ownership, even though we have both names under the rental property. Thanks in advance for your help!
It goes back to what your legal ownership is, who pays for downpayment, who pays for the net loss, etc. The last thing you can do is to flip flop between the two owners based on the the income/losses incurred.
@@RealEstateTaxTips my spouse and I own the property 50% each. She had the same loss as mine. So co-ownership and partnership do not allow losses to be used to offset personal income tax?
@@macleandanso4890 losses incurred on rental in personal name can be used to offset against other source of income (not dollar for dollar offset against personal tax). Not sure if that answers your question.
@@RealEstateTaxTips Thanks for your response. Is there exception to this rule "losses incurred on rental in personal name can be used to offset against other source of income"? We had a rental loss last year but Turbotax put the amount on line 67830, calculated on Form T691 - The Alternative Minimum Tax (AMT). I paid about $2500 combined Federal and Provincial taxes but the loss was not used to offset my other source of income.
Thanks for the great tips. I would love to connect and see if you’re able to help me in my specific situation. Could be content for your next video as I know several people in my age group facing the same challenge and there is no accurate info out there on how to tackle situations like these. Thanks again and great work!
Thanks Raj. Feel free to reach out to our office if you have a specific individual situation. If you have a generic question, feel free to post it here as well.
Thank you, thank you, THANK YOU! We just hit 10k subscribers on our CZcams channel and couldn't be happier.
To all of you who have supported us along the way, thank you for your views, likes, comments, and shares. We couldn't have done it without you.
We're committed to bringing you even more amazing content in the future that will help you achieve your real estate investing and tax goals faster.
So, stay tuned for more exciting stuff from us! We can't wait to see what the next 10k subscribers will bring.
Once again, thank you for your support. You guys rock!
Great content!
Happy you reached your goal and keep up the good work!
@@fishhead314 Thanks!
I have learned more from this channel then I ever did in school or by talking to my financially literate friends. The education you put out is incredibly useful and a great primer for educating your clients before they hire you. You're content is valuable and appreciated and I know it's not easy to make. Keep going!
Glad you found them useful. And yes, it is a lot of work. 😆😅
Thank you for this high quality video
Thanks for the explanation. I’m familiar with most of what you are speaking on. I’ve been a landlord for 35 years and I’ve worked the system to my benefit.
I highly recommend Cherry, I have been a customer of hers for several years and she knows her stuff! I knew she was the one after only one question that all accountants get wrong, she answered it correctly and without a thought.
What is your number one expense in life?
She will now know who I am as I don’t use my real name on line. Thank you for the hard work you do
Thank you! Your videos are so informational. Hard to find such good Canadian content!
Glad you like them!
Great video, Cherry! Thanks for adding the examples, definitely helps to understand better 😊
Glad it was helpful!
Thank you for your video! The government punishes hard working people for being successful its a darn shame! Work hard, make a good wage and get punished by the outrageous taxes in Canada! It's disgusting!
So sad!
So happy I found your channel!!!!
Great content! Love it! ❤❤❤
Glad you enjoy it!
So from your experience and perspective, for those who have a 9-5 job - and planning to engage in real estate and acquire properties for rental income for the long term - which would be the most ideal ownership structure to get the most efficient tax advantages etc.
so clearly demonstrated with examples! great content Cherry!
Thank you!
Thank you for getting to the point quickly - just subscribed -
Thanks for the sub!
So so informative and helpful, thank you! 👏
Glad it was helpful!
I want to thank you very much. You are right it is very confusing but you made it really easy to understand. I am in Nova Scotia and an american so I will have to delve further into this but I wanted to say thank you and I liked it and am a subscriber.
Glad it was helpful!
My advice is the less the government knows about your rental the better
Great learning from this video. Thank you. Seeking more in the future ❤
Glad it was helpful!
You are doing a great job with your videos. Thanks.
Glad you like them!
Thanks for making content like this. It’s very helpful.
Glad it was helpful!
Thank you for the great video, it’s very informative.
Glad you enjoyed it!
I LOVE YOUR CONTENT. PLEASE KEEP TEACHING US ABOUT REAL ESTATE TAX STRUCTURES IN CANADA
Thanks, appreciate your feedback. Keeps me going !
We are renting out our personal home here in Manitoba for the first time. if it works out without to many issues and there is potential profit, should I let my wife take that profit as income because she doesn't currently have income and mine would just increase my income. Thanks for the information. New to your content.
Thanks for the information 👍🏽
Glad you find it useful
Please make a video on how rental income is taxed in corporation also… keenly waiting for it
That will come... it's in my plan
Thank you for the thorough coverage of the subject. There is one question I have that wasn't covered. If an individual has been renting his property for 15 years and on the 16th year he suffers rental income losses (repairs and rental defaults exceed income) and now on the 17th year his daughter moves in rent free. Now on the 18th year he wants to sell the property. How does the profit from the sale be taxed?
Sounds like you have a specific tax question. Feel free to talk to your accountant or if you don't have one, feel free to call our office at 416 548 4228 to schedule a one on one consultation
This was way more than I could learn anywhere else combined. Thank you for your detailed information. It would be great if you could offer investment and or rental property portfolio strategy consulting.
Great content. Thank you.
Thank you!
Thank you so much for your reply, Would you do a complete video converting an owner occupied multiplex to cooperate level and how taxes work? It will be a very helpful video..........Thank you so much for your videos........
Hi Cherry, Me and My wife just bought house and its our primary resident, we are renting my basement and we both work full time. I will declare that to the CRA but my question to you that is, will there be a capital tax gain when I will sell the house or any other extra charges then a normal primary resident sell ?
Hi Cherry, if you make about $70,000 in rental income before any deduction, is it better to consider registering a company for Tax purpose? What are the additional expense deduction you can make under a corporation and what kind of company should you register?
Thanks a lot Cherry for this informative video.
Had a question
Can I gift my rental income to my college going son for his tuition fees without any tax implications?
All your videos are very informative. Would like some advice for us if incorporating would be better.
I'm doing a webinar tomorrow at 8 pm on incorporation. Feel free to attend that to learn more :) www.therealestateaccountants.ca/investor-yt
Hi. I was wondering if you have a rental income and a CPP pension coming in, how does this affect the Tax rate you pay. As someone reaching older age, I am trying to plan my income stream. The high cost of living is making me consider renting out my property, and living somewhere else. If I have a rental income coming in, what percentage would impact my pension? I am considering visiting a Tax professional for consultation. Thank you for this video.
Hi Thanks for the video... I dont see a link to top tax deductions for rental income. Can you please post it or provide the link. Thanks.
czcams.com/video/7tcV_zVj7CE/video.html
If I will only gross 8,000 per year on rental income for 3 or 4 weeks of rentals, i wonder what taxes I'd pay. Factor8ng in capital cost allowance, if there is a $160,000 mortgage and $6,000 in utility and insurance costs and negligible.maintenance costs during those few weeks.
I'd love to see some calculations in your presentation on owners just making a few thousand dollars per year
If someone expects to have less income in the future (say in retirement), does using CCA make sense during the earlier high income years? Recapture in the future would only be charged at the future marginal tax rate, which should be lower. Could be an interesting way to defer taxes, though if the capital gains during a sale are sufficiently high, you might just end up being in a high marginal tax rate anyways. Does that make sense?
Yes absolutely. If you are making high income today, and you are expecting to continue to make high income even when you're retired, then you might as well take CCA. A dollar in your pocket today is worth way more than a dollar in your pocket 10 years down the road during inflationary period.
Thx for upload 😮
Wow. Very informative.
Glad it was helpful!
What a headache. So I have to pay capital gains just for renting out my home and not selling it?
Amazing info!
Glad you like it
it would be good idea to add examples
Will keep that in mind for future video production
I’m not sure about the mixing of reimbursement of the rental income losses on employment tax. In my case what happened that CRA didn’t mix these two sources of income and only carried forward the losses from rentals to future years but didn’t take it into account to deduct from my employment income tax. This didn’t also apply to cases when you are employed but you have losses from your sole proprietor business. Are you 100% sure you are correct cause if this is the case, then the federal and provincial government cheated me.
Thank you for your effort
If you manage your own rental properties within your corporation, can you pay yourself a salary?
Hello! My husband and I are Canadian citizens, and we plan on moving to SE Asia for the first 5 years of our retirement.
We still hold a mortgage and plan to rent out our primary residence to cover the costs of the mortgage/taxes/insurance while we are away. We also plan on returning to visit our family every year for a couple months at a time.
We will only have our CPP OAS pensions supplemented by our modest RRSP/TFSA.
My question is, do we need to hire an accountant or just continue to have our taxes done by our local tax service company? Any insight would be appreciated. Thank you in advance!
Hi Cherry,
Is there a max on how much mortgage interest can be claimed? For example if 50K of mortgage interest was paid during the tax year, can all of it be claimed? When that number was applied to T776, the T1 return generated an abnormally high tax refund of 6K. Is this normal (given the high housing interest rates of current time)?
Very informative
Thank you so much
Glad you found it helpful!
I really appreciate your content. Unfortunately I think the video skipped ahead and missed the REIT tax explanation. I am very interested in the REIT explanation, as well as a Syndicated investment for both a Canadian Corp investing in US properties, vs a US Corp REIT or Syndication for Canadian investors. I currently have some capital invested in the US in both structures, and not fully sure of the tax advantages or pitfalls of one over the other. Except obviously a Canadian Corp will issue proper CRA year end forms, vs a K-1 from US companies. We (my wife and I) already have ITIN numbers set up from previous investments. I am concerned with getting double taxed if not properly set up, or the incorrect structure used. I hope you can elaborate in laymans terms. I look forward to your response or future video explanation of each. Thank you.
These are very specific situations - and we will keep them in mind for future video production. Thanks.
if the sale of the primary property in less than 365 days occurs loss, would this be business loss? so we can deduct it from the personal income? I am assuming no tax on the sale then. Thank you.
In case we rent out the basement of our primary residence and declare rental income as and when earned. When we sell the property will we be eligible for primary residence exemption? (as long as we meet three criteria of not making any structural change, no CCA and rented portion smaller than our area)
Does not work for everyone.. what about people who has only .. Your explanation is great and clear but CRA is not doing it that way for everyone especially an amount way above $30,000..
Hi
If i buy an other property from the sale of investment property capital gains and move in as principal residence. Do i still have to pay capital gains? I am planning to build a rental unit in that house as well?
Useful info. Followed.
Glad it was helpful!
Thank you Great tips
Glad it was helpful!
Hi Cherry, Thanks for all your content. I am going through your book and have a question.
Let's assume I pay $20k(including HST) as current expense for my rental property (in my name) and so my property has incured loss of $20k due to repairs this year(considering rent collection and cost of managing property is breakeven). Can i deduct full $20k against the taxes i paid in my full time job and receive a refund of $20k when i file taxes??
Thank you.!😊
If my rental income per month $2000.00 and my mortgage for that property is $1800.00.
My net income is only $200.00
I suppose that I need to file taxable income is $200x12 =$2400.00
Am I right?
I added some cash , $10k, to my principal , how do i report on T776?
Hi I rent my principal resident and moved with my son. What tax implication when I sale my principle resident? What is the best option?
Thank you
Can rental losses be carried forward to future years?
In other words - unless you want to be completely ripped off, gotta do some under the table deals.
Why doesn’t cra allow claiming capital losses if there is terminal loss? Could you explain that concept please ?
A loss incurred from the sale of depreciable property, for example a vehicle, would be considered a terminal loss. There are specific rules regarding this and I would recommend you schedule a meeting with my team to review your scenario.
Thank you! Always learning something new watching your videos.
What would be the tax implications if the rental income of one property is used as a down payment to purchase another investment property? Could that amount be claimed as a dedcution?
Thank you in advance.
Downpayment is never a deduction. Interest incurred on money borrowed is...
@@RealEstateTaxTips Thank you. And, let's say, I were to refinance my primary residence then shortly decided to rent it out, would all that interest be deductible?
Hi Cherry, great video as usual!
I’m curious to understand what happens if you own a rental property portfolio with negative cash flow but don’t have any job income or your job income is less than the amount you loose on your rentals.
I guess you just take the loss because there is no way to offset it.
In that case, would it be better to own that in a corporation or is it the same?
Thanks
The loss can be carried forward to offset against future income or it can be carried back for three years
@@RealEstateTaxTips thank you Cherry, this is a valuable information ☺️
Very informative
Hi Cherry, thank you for your video. It’s very helpful. I have a question and really appreciate if you can help me out here.
A few years ago, I refinanced my primary home and used those funds to buy a rental property (so the rental property is fully paid out). Like you mentioned, if the primary residence is refinanced, and those funds are used for the purpose of investment, then the interest from this rental priory can be tax deductible.
I want to refinance the rental property to buy a second rental property, would the interest from the funds I used to buy the second rental property also be tax deductible? Probably yes. My main question: Will the interests from both rental properties be tax deductible if I bought my second rental by refinancing the first rental property? Thank you
Yes you would be able to claim the interest from the refinanced property provided the funds were used to acquire a property from which you earned rental income
Do you provide a tax service to small corporations and private tax payers.
I'm in BC, Vancouver Island.
Hello! yes we do. Please contact us at realestatetaxtips.ca/contact-us/ and my team can guide you. Thanks
Hi Cherry, if I someone has a property co-owner with her sister 50/50, the younger sister has been letting her older sister to collect and report 100% rental income for over 10 years just to help her out, now if the younger sister wants to switch back that 50% rental income to her if that is possible ? The property has been co-own since they bought the property. If this is possible, then what do they need to do? Thank you
How about Limited REIT?
WHAT AREBTHE TAX RESPONSIBILITIES WHEN YOU RENT TO BUY
Hi Cherry, thanks for your videos. I incorporated my business for IT Consultancy and decided to buy presale properties through my company and flip. Do I need to create a holding company to own these properties or is my operating company sufficient to own these properties and pay capital gain tax or business tax.
This is a bit of a personal preference based on y our risk tolerance. It also depends on how much you are investing. For tax purpose, it might have some differences. Make sure you consult with your accountant, and if you don't work with one, we're always here to help.
Hi Cherry, If rental income is taxed at 50% in a corporation, and if it's under personal name and taxed below 50%, what would be the benefit of having it in a corporate structure?
I would recommend that you schedule a meeting with my team to review these points more in depth as there are many factors that need to be considered when investing in a corporation.
People are renting rooms in Canada and are losing their Pension Income because they are trying to pay their high Mortgage renewals.
They are also complaing in the way they are taxed also on their property tax. the larger portion of the property tax comes at the begining of the year with overdue payment and interest
traffic infractions added to your property tax without any notification by just looking up your name through your licence plat. This is also from another city.
I'm not aware of traffic tax that you mentioned. My own experience with property tax is that we pay the same amount as prior year but prorated for the first half of the year, you pay the increase in the second half of the year... a bit different from you comment.
Hi Cherry, would it be better to create a corporation for the short-term rental i do with my home? Can i charge the corporation rent at market rate and pay myself? Would CRA allow this?
I would recommend you schedule a meeting with my team so that we can better understand your situation and provide you the correct advice relevant to your scenario
Are there any options to claim income tax relief on the rental payments? Say a home owner has to rent out their property and move to another location and rent a property, will they get any tax rebate on the rental they will be paying?
You gotta compare how much you're receiving as rent, vs how much you're paying as deductible expenses. If you have a loss, you may be able to offset the loss against the employment income, which may trigger a tax refund
Thank you for your video. When you refer to net rental. Do you only pay taxes on the amount after your mortgage payment? Therefore if rent is 500 and mortgage is 400, the net taxable income is only 100? Or are you taxed on the full rent. And furthermore, you can deduct off that with other house related payments? Thanks in advance.
mortgage interest is deductible but mortgage principle is not. Typically in Canada, your mortgage payment is a blended payment between interest and principle paydown. So only the interest amount is tax deductible
@@RealEstateTaxTips but when you claim your rental income. Does all of the rental amount count as income (tax deductible) or just the delta between what your mortgage costs and how much you received in rent?
@@Theonebiz You always report gross rent, and the mortgage interest as a deduction
Thanks for the video. If I bought a property with the intention to rent in Oct 2021. I did some minor repairs, and pay utilities, advertising etc .But did not get it rented until Feb the following year.
How do you report in the tax year of 2021?
Thanks.
The costs of the renovations/repairs from the date of purchase until the date rented would be considered a "soft cost" per CRA and added to your purchase price of the property. As such there is nothing to report in 2021 as you earned no income from rent until 2022.
HI thanks for the video! I got that I cannot make a bigger lost with CCA, but can I use CCA to lower my income to 0 and then with interest, property taxes and others that you explained in other video "top 10 tax deduction", make a loss ?
E.G I earned 10k in rentals, with CCA lower to 0, and then claim 10k interest + 3k in property taxes to make a 13k lose ?
You cannot use CCA to create a loss. The sequence of deduction matters. You'll deduct interest, property taxes first, before you are allowed to claim CCA
Hi Cherry, I’m one of your subscriber, I’m learn a lot just by listening to you… I have a question, I have this rental property in Regina, I acquire 2008, it was rented ever since I bought it. My question is I bougt it 15k , now I remortgage for the amount 135k… I’m planning to sell it now but price in this province is very low ,my mortgage is higher than the amount if I sell. Pls. Advice me what to do
Wish I would know what I could do... I don't have a magic wand unfortunately.
If you were to sell it, you would have to pay taxes plus the mortgage amount. If you don't have the cash available to cover these, you might not want to sell it in the short-run.
Would you do a complete video about advantages of converting a property to a S cooperation please ? Explanation Is too fast, there are difficult words to understand and I am a new comer in real estate........Try to be slower with simple explanations please........
This is a video for Canada - S corporation isn't available in Canada.
I'm assuming you're referring to a regular corporation, right?
Hi how do rental taxes work if your salary is above 150k. I heard that you cannot claim net rental loss once you go above 150k salary. Also great channel very informative.
Not sure what your source is, as far as I know, as long as you have a legitimate rental loss, you can still claim losses.
Thank you!!!
You're welcome!
thats crazy, the government literally does nothing for a rental property and you get taxed again for it.
They charge tax on rental... that's about it...
@@RealEstateTaxTips they charged the income of the person paying the rental, the person who owns the property pays taxes and property taxes and when they purchased it, and when they sell it, just saying this is another layer I was not aware of. I assumed if you paid for a rental permit that was it.
If I rent my principal home out and if I sell it, does it consider tax free since I only have one home?
Thanks
You can only avoid tax on the years you use it as your primary residence
Hi, a new subscriber here. I'm a new rental property owner. Should I declare the purchase price of the rental property in my income tax? Thanks.
The only time you will need to declare the purchase price is when you claim capital cost allowance assuming you have net rental income.
I have learned one think , rent only in Canada and invest outside it's much more healthy ....the Tax in Canada is a black hole that sucks every dollar.
We're definitely diversifying to different countries...
Landlords have no support when they get a bad tenant, and start losing a lot of money because they literally can't evict them fast enough, yet the banks, insurance, and the taxman certainly will not wait for you !
Sad but true. This year, my theme is about diversifying
How do I figure out the land and building value for CCA? I have a condominium unit in the city of Toronto. Thanks.
For condos there is generally no land component,
Rental property vacant I am paying property tax and mortgage during vacant period . can it consider as loss
It depends on what you are doing to earn income
What about holding companies? I was told to get a holding company and put that on the rental property name
We do incorporation webinar every quarter. You might want to join our next one to get a better understanding on whether you should setup a holding company or not.
@@RealEstateTaxTips Sure how do I join? Would you also talk about that if I decide to go open a holding company I will not be able to use RRSP and FHSA?
Would the CCA be applicable for the primary resident who owns the place and rents it out on Airbnb for less than 180 days a year?
You may just lose PR exemption if you claim CCA
Thank you so much for making the videos. Subscribes 😊
Hi Cherry, I am foreign buyer & I bought one condo in vancouver for my son in 2014, and stayed there with him, & full family till date, now he has bought his own house and I want to sell this condo, what is tax implication to foreign buyers, or if I rent it out and later when the condo prices are high sell it say after two years, what will be tax implication then, both the cases are same or different?
Also, how much tax do a foreign owner has to pay on rental income (I have no income in Canada)?
Your situation is quite complicated and you should consider speaking with a professional accountant
You cant create a loss using cca
Thanks for such an educational video! I have a quick question: If I fund my own personal corporation money (seed money), say 50k, can I deduct 50k from my own personal income tax? So if I earn 100k annually, does it mean I only make 50k the year I seeded the money? Thanks in advance for your advice and input!
If you fund it, it's called investments (either in loan format or share investments). Unfortunately you cannot write it off against your personal income.
@@RealEstateTaxTips thank you for your response! I hope I can be your customer in the future since you're from Oakville (I'm in Hamilton). Is there an email which i can contact you to schedule a future appointment?
Thank you ❤
Welcome!
What if just a room was rented, can i still claim deductions like property tax, mortgage interest, new ac and furnace?
CRA is fair in a way, if you're renting it out you could deduct the proportional expense related to that room...
I bought the property in 2010 cost $ 3400000 now due to inflation the property price up to $ 700000 , this consider gain tax ignoring inflation
Sounds like all gain
Does it mean despite deduction of income tax by employer, rental income will be added to your net income and pay tax at 33%?
Rental income, net of expenses will be added as your income and is subject to your marginal tax rate
Hi. I just bought a rental. I will only earn $2000 for the year due to not acquiring property until November. But in order to rent property, i had to spend $5000 to get the property in order. All expenses are wear and tear and not capital expenses such as replacing the roof. So i am at a loss of $3000. Does this come off my income as a bad debt?
Expenses incurred to get the house ready for rent is generally considered capital expenses - you might want to revisit the CRA website to check whether your expenses are truly wear and tear
Roof replacement is depreciated, small roof repair is deducted
HI, I am going to rent my 1 bedroom out of 3 bedroom condo principal house soon. is it going to be same for that as well? or its different bcos renting room will be considered paying guest ?
Depending on your particular arrangement, you likely can deduct majority of the expenses proportionally.
Hi there, question about the Co-owner %. I'm in a higher tax bracket than my spouse, but we co-own our rental property. We incurred a net lost on the rental property in 2022 and will likely continue to until interest rates go down. 2022 is the first year of this investment.
I'm thinking of assigning all the net loss deduction to my return, do i still have to report the rental property as Co-ownership and set it at 99.99/0.01? or 100/0%? Or do I not report as co-ownership, even though we have both names under the rental property.
Thanks in advance for your help!
It goes back to what your legal ownership is, who pays for downpayment, who pays for the net loss, etc. The last thing you can do is to flip flop between the two owners based on the the income/losses incurred.
@@RealEstateTaxTips my spouse and I own the property 50% each. She had the same loss as mine. So co-ownership and partnership do not allow losses to be used to offset personal income tax?
@@macleandanso4890 losses incurred on rental in personal name can be used to offset against other source of income (not dollar for dollar offset against personal tax). Not sure if that answers your question.
@@RealEstateTaxTips Thanks for your response. Is there exception to this rule "losses incurred on rental in personal name can be used to offset against other source of income"? We had a rental loss last year but Turbotax put the amount on line 67830, calculated on Form T691 - The Alternative Minimum Tax (AMT). I paid about $2500 combined Federal and Provincial taxes but the loss was not used to offset my other source of income.
Thanks for the great tips. I would love to connect and see if you’re able to help me in my specific situation. Could be content for your next video as I know several people in my age group facing the same challenge and there is no accurate info out there on how to tackle situations like these. Thanks again and great work!
Thanks Raj. Feel free to reach out to our office if you have a specific individual situation.
If you have a generic question, feel free to post it here as well.