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Hello,

Is a property owned by a corporation allowed to transfer a property title to a shareholder of that corporation.

My family and I are all shareholders within the corporation (25% each). There is a property which we would like to move out of the corporation and we were wondering if we could transfer the title to our individual names without having to pay again for the property (market value). Plus avoid land transfer tax etc.

Are there any real estate laws that deal with corporation and properties being transferred ?

Thanks in advance,

Jenka
 

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From what I know, there is no way to transfer without incurring transfer taxes.
Corps are individual entities so a transfer to yourself will trigger an automatic sale transaction.

Why would you want to transfer out of the corportation?
 

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No way to avoid land transfer fees and you need to follow the same steps as if you sold to stranger although the corporation could give you a mortgage if it was free and clear now but it would have to be set up with you paying the proper payment and corporation would have to declare the interest payments as income.
 

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Plus, I would imagine that you will need to decide if you are paying that out as a dividend or some form of salary bonus and then pay the applicable taxes. If you have any shareholder loans on the books you could possible use this to pay them off or if you have any credit in your capital accounts. You would need to look at the financial statements to verify this.

Plus there is no tax free capital gain that would apply for a principle residence property, so if it went up in value, you may have more taxes there, as well.
 
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