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Discussion Starter #1
I am buying a triplex income property strictly for investment. I will not be living in it. What are the benefits/disadvantages to putting into my personal name or under a corporation? I am not sure if I plan on keeping it for 20 years+ to supplement my retirement income or if I will flip it in a few years. If I were to die and leave it to my wife or kids is there any benefits in a company?

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I am buying a triplex income property strictly for investment. I will not be living in it. What are the benefits/disadvantages to putting into my personal name or under a corporation? I am not sure if I plan on keeping it for 20 years+ to supplement my retirement income or if I will flip it in a few years. If I were to die and leave it to my wife or kids is there any benefits in a company?

Thanks
Do you own your own home? If this can't be a principal residence, and you can get a mortgage with a company, I'd do it that way. It lowers your legal risk. Plus, if you were to have the rental property get forclosed on, if it's in your personal name they may be able to go after your other house. They wouldn't if it was a company. This is also why it's harder to get a mortgage with a company.
 

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Do you own your own home? If this can't be a principal residence, and you can get a mortgage with a company, I'd do it that way. It lowers your legal risk. Plus, if you were to have the rental property get forclosed on, if it's in your personal name they may be able to go after your other house. They wouldn't if it was a company. This is also why it's harder to get a mortgage with a company.
When you get a mortgage with a company they won't give it to you without personal guarantees anyways.

Generally it does not pay to have a company unless you make over $100,000 per year in personal income. Plus with a rental property you would be able to claim a lot of expenses that you would not get to claim if you had a company.

Usually when you see property held in a company it is a larger building. If you decide to own multiple properties it may make sense.
 

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Discussion Starter #5 (Edited)
yea my goal would be to have 4-5 properties or more. Hoping each makes 30k/year in revenue. So in 15-20 years when they are all paid off...hoping they will bring me in a nice pension at 100-150k/year. Again these are plans...usually things always change as the years go, but I was wondering if making 100k/year +, would it make more sense to be in a company for taxes
 

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I subscribe to a mailing list from David Ingram, a specialist in cross-border (Canada-US) taxation. I just got this e-mail including this response from David to someone asking the same question as you (and specifically applicable to Alberta):

In my opinion there is no tax advantage and no personal liability advantage to incorporating a rental building.

There can be estate advantages on death if your desire is to spread the ownership around. For instance, you might decide to leave 40% of the value to your favourite charity and 60% to your kids and that is easier to do if there is a corporation.

However, unless you have five full time employees who are not related in your corporation, your Alberta Corporate Income Tax rate is 29% because the income is considered Passive or investment income.

The people who do make money are the accountants and lawyers who set it up.

If you are worried about personal liability, a corporation will not help you if you are the chief director, general manager or the person who hires a manager. If something goes wrong, you will always be sued.

The real answer is to buy yourself a REALLY GOOD Public Liability Insurance policy.

And, if you are living in the building, do not even think of incorporating because you will lose any tax free status for living in the building with the land.
 
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