Roll over rental property to a corporation!

Make sure you haave a good reason for rolling it over, as tax rate on rental income in a corp is approx 50% before any dividends being paid out.

You can do the transfer for tax purposes via section 85 election.

On the land transfer side, will ownership be the same? if there is no benefcial change in ownership i believe there is a form that can be filled in

Aside from above, make sure its worth it because you'll have to pay land transfer taxes because it is a change in ownership.

Tiberious

Tiberious wrote: ↑ Aside from above, make sure its worth it because you'll have to pay land transfer taxes because it is a change in ownership.

Tiberious

if corporate shareholders are the same as existing ownership, is that a change in beneficial ownership? ultimate owners are the same.

adeel wrote: ↑ if corporate shareholders are the same as existing ownership, is that a change in beneficial ownership? ultimate owners are the same.

There isn’t a way out of the land transfer tax on this. It’s one of a few reasons it may not be beneficial to roll in personally owned properties.

Check with an accountant. I thought there was something that to roll over rental property to a corporation you need to have a minimum of two properties. In other words you can only incorporate properties in a corporation and not "a" property.

itemsale2003 wrote: ↑ Check with an accountant. I thought there was something that to roll over rental property to a corporation you need to have a minimum of two properties. In other words you can only incorporate properties in a corporation and not "a" property.

INAL but that most certainly can't be correct due to not making any sense.

Loyal12 wrote: ↑ Hello, We are looking at rolling over rental property to a corporation. what are the techniques used to avoid capital gains and land trasnsfer fee. Please recommend and good real estate accountant and lawyer in GTA.

Thanks

What's the reason of doing this? In most cases, I do not recommend my clients to go through this, other than the rare chance of increasing leverage for mortgage purposes. I am speaking from my experience as an accountant (CPA,CA) who works closely with real estate investors as well as a mortgage agent.

jkwan18 wrote: ↑ What's the reason of doing this? In most cases, I do not recommend my clients to go through this, other than the rare chance of increasing leverage for mortgage purposes. I am speaking from my experience as an accountant (CPA,CA) who works closely with real estate investors as well as a mortgage agent.

Assuming the number of properties an individual owns starts to add up to 5 or more, do you suggest simply keeping all the properties under his name as opposed to under a corporation. At what point does it make sense to register a corp/holding company for these properties?

olddog wrote: ↑ Assuming the number of properties an individual owns stacks to add up to 5 or more, do you suggest simply keeping all the properties he owns under his name as opposed t register a corporation. At what point does it make sense to register a corp/holding company for these properties?

Because of land transfer tax issues, chances are it's better to keep those properties under personal name and the new properties to be put in a holding company if the situation makes sense to do so.