I would like to dedicate this section to some of the FAQ I get from my clients. I hope these will provide some insight to anyone that might have been wondering about them in general.
How can I invest in real estate in Canada?
- Investing in Canadian real estate can be done through direct personal ownership, a partnership, a corporation or a trust, each with their own considerations and advantages/disadvantages.
How can I build a real estate portfolio in Canada?
- Building a real estate portfolio generally requires capital, expertise, research and collaboration with a team of professionals to help with the purchase, financing and management of the properties acquired.
Will the sale of Canadian real estate result in a capital gain?
- One-off sales of Canadian real estate can result in capital gains treatment for Canadian tax purposes. But when there are multiple properties or a series of several sales the Canada Revenue Agency may challenge the preferred capital gains treatment and assess the sale on account of earning income.
- If the property qualifies as a Principal Residence, any appreciation may be tax free for Canadian tax purposes.
- Note that the Federal government has recently introduced draft legislation that seeks to treat the gains on the sale of real estate property that is held for less than 12 months as fully taxable income, with some exceptions for certain life events, beginning in 2023.
Can I defer capital gains tax on real estate in Canada?
- Deferring the payment of some of the taxes payable on capital gains on real estate sales may be possible if the payment will be received over a number of years, and a reserve is taken for tax purposes.
Will housing prices keep falling in Canada?
- In the short term it is expected that housing prices will continue to fall. But as interest rates stabilize and inflation moderates, prices are expected to again increase with support from strong immigration.