How much range of the return is there when we invest in brand new properties that are yet to be built?
i.e. We invest during booking, and then sell during possession time?Also, what is the tax implication for that?

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Dec 30, 2015
by: Anonymous

Thanks Tom

Dec 30, 2015
by: Tom

Thanks for the question!

There's really never a "rule of thumb" for properties, it's almost always a case-by-case thing. Part of the reason for that is sometimes we're willing to accept less return initially if we know long term the area has a lot of upside.

Or the reverse, sometimes we'll get great cash flow, but know the appreciation on that particular property may be limited.

If you buy new construction as an investment there is usually HST to pay. You'll want to discuss that with your lawyer and the builder before you go firm on any purchase.

And there is typically capital gains to pay on the difference between when you buy and when you sell. There are many factors around this so it's always good to speak to an accountant for proper advice.

Hope that helps a little!


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