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As a real estate investor beginner should I incorporate or own my first property in my own name?

XavierCP

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May 8, 2019
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I read this portion of the book "Real Estate Investing in Canada (p. 132). Wiley. Kindle Edition" written by Don R. Campbell, and I was wondering if someone has some advices to share about that:

You can only decide how best to own your investment properties by describing your plan to a qualified real estate accountant and getting his or her advice. Every investor’s situation is different; consequently, there can be no hard-and-fast rule about whether to incorporate or to own the properties in your own name. There are pluses and minuses to each of these scenarios. Your accountant can help you decide what is best from the perspective of taxes and liability. This is a good example of why it’s important to surround yourself with a quality team right from the beginning, so you don’t get caught making decisions based on rules of thumb or what your neighbours, friends or relatives believe to be true.

Somebody knows a good real estate accountant in Montreal?

Thank you
 

angelapeng

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Aug 19, 2011
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It depends. I incorporated in day 1 when I knew that I am going to build up a substantial real estate portfolio in the next few years. (It was suggested to incorporate it if you think you will have at least 2 millions of assets in it). In our case, within 7 years, we built up a multi-millions dollars of assets in the Corporation, last year, we sold half of the portfolio (not intentionally, but voted by the owners in the building to a developer), due to the incorporation, we have some benefits of tax planning). My partner has all the properties in her own personal name, she ended up paying the full capital gain tax.

My suggestion is if you seriously consider real estate investing as a business to reach your financial goal, and plan to purchase assets of a couple of millions, then do it. It is worth the a few thousands of accounting fees annually, especially, after at least 10 years of holding time, you will have the flexibility of restructuring your assets in an optimal approach versus owning in your own name.
 

XavierCP

Inspired Forum Member
Registered
Joined
May 8, 2019
Messages
51
It depends. I incorporated in day 1 when I knew that I am going to build up a substantial real estate portfolio in the next few years. (It was suggested to incorporate it if you think you will have at least 2 millions of assets in it). In our case, within 7 years, we built up a multi-millions dollars of assets in the Corporation, last year, we sold half of the portfolio (not intentionally, but voted by the owners in the building to a developer), due to the incorporation, we have some benefits of tax planning). My partner has all the properties in her own personal name, she ended up paying the full capital gain tax.

My suggestion is if you seriously consider real estate investing as a business to reach your financial goal, and plan to purchase assets of a couple of millions, then do it. It is worth the a few thousands of accounting fees annually, especially, after at least 10 years of holding time, you will have the flexibility of restructuring your assets in an optimal approach versus owning in your own name.
Than you so much for your answer angelapeng!
 
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