Real Estate Investment and Taxes

Hi there,

I live abroad but am planning to settle in Toronto in September 2013. I also plan to begin investing in real estate rentals. Your website energizes me and I have learned a lot from your newsletters and archived articles.

My question is related to at what level are we taxed by the Canadian authorities on our real estate investments and how do we get the best taxation breaks.

Thank you for your response.


Comments for Real Estate Investment and Taxes

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Apr 01, 2013
RE: Real Estate Investment and Taxes
by: Tom Karadza

Hi Deep,

Thanks so much for your question and Canada looks forward to greeting you!!

Real Estate can be taxed in many different ways in Canada. If you own the property yourself (in your personal name) then the rental income is added to your other income. But any expenses on the property are subtracted from that income.

Eventually you may own your property/properties in a corporation and then there are various ways to reduce the tax burden, however, that takes the advice of an experienced Accountant.

In Canada, at the moment, the small business tax rate is 15.5% but you need to do this properly with the help of an accountant otherwise the income will be taxed as "passive real estate income" in the 30+% tax range.

Hope that helps a little,


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