How Property Flips Are Taxed In Canada
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- Опубликовано: 6 авг 2024
- As of January 1, 2023, CRA implemented a new anti-flipping rule that requires you to report any profit made from selling a property within 365 days after purchasing it as business income unless you meet one of the exclusions.
But how do you determine if your sale is considered a flip or long-term capital gain? What factors do CRA and tax courts consider when making this determination? And most importantly, how can you minimize the taxes paid on flips?
In this video, we’ll cover all of these topics and more. We’ll explain what’s considered property flips, how to decide if your sale is considered a flip, the 12 factors that CRA and tax courts look at, the tax implications of house flipping, and how to minimize the taxes paid on flips.
If you're currently involved in flipping houses or planning to do so and are looking to maximize your profits while minimizing your tax liability, you’ll find this information very valuable.
Key Moments In This Episode
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0:00 - Intro
0:36 - What’s Considered a Property Flip?
3:43 - Anti-Flipping Rule
4:10 - 12 factors that CRA looks at when considering a Flip as a Business Income
8:34 - Tax Implication of Flipping Properties
10:45 - Examples with Different types of Ownership Structure
15:55 - How to Minimize Taxes Paid on Flips
17:30 - 10 Common tax deductions you can make as a flipper
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Please make sure to speak to a professional that knows your personal situation before making a decision.
If you need to talk to someone on my team, email us at admin@cccpa.ca.
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DISCLAIMER:
Real estate Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your legal and tax advisors to ensure you get the best personalized advice.
The information contained in this video is for general information purposes only.
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Hey Cheery, Thank you for making this channel (& huge value-loaded free videos) that focuses on Canadian Real Estate Market. We mostly find US-based real estate channels here. Subscribed. Keep it up!
Hope these videos are helpful!
Great tips Cherry!! Informative as always.
Thank you !
thanks for the great video, referring to 12:34 , would contributing to rrsp help to reduce the tax?
Very important information
Thank you !
Thanks this is really helpful. Is downpayment part of acquisition cost?
Fantastic video Cherry!
Thank you!
@@RealEstateTaxTips To calculate the profit on the flip subject to tax, is it the spread between the sold price of the property minus the purchase price plus deductions? Eg. 750,000 - (400,000 + 150,000) = 200,000 $
Thanks for the video, I had a question. Let's say I renovated a home that took 8 months, then after completeion I rent out all the units and sell the property after a year. Would I still get hit with the Anti Flipping tax? Thanks.
Fantastic tips Cherry ! Thanks for all the work you put in. Can you please make a video on the right ownership structure for a real estate investor that does flips
For this you would need to schedule an appointment with our team to understand you entire picture. You can reach us at 416-458-4228 or at www.realestatetaxtips.ca and our team will assist you in scheduling a meeting
Thanks so much for all your videos. So happy I found your channel. Do you also have a book on Canadian Real Estate, if not, I think you should totally write a book! Do you have any recommendations on existing books?
I will be starting my real estate journey soon, I will give a consultation call to your office during the tax time next year. I am in Montreal area now but all my family is in Toronto area, they are very close to Oakville.
I would recommend that you reach out to our team before team prior to January 2024 in order to ensure that we can get you onboard and work with you. You can contact our office at 416-548-4228.
what if loss?
Hi Cherry great video. If this property was purchased in april 2022 and sold in November 2022 with a profit. Would that profit be busines income or capital gain?
There're the criteria that you need to use to determine if you are flipping or not - without a full analysis - would be challenging to give you a definitive answer
after the deductible expense, the sale is a loss. how does the tax work? can we claim business loss and get deduct it from our personal incoming? Thank you.
Possible.
Hey cherry. If a property was purchased in 2022 in nov and sold in may 2023 does this make it a flip despite that the law didn’t come into effect for anti flips would this not be eligible for capital gains exemption?
Flipping rules are applicable to closing happen since Jan 1, 2023
Hola Cereza, usted es asesora de bienes inmuebles? De ser asì, quisieramos obtener algun email donde conectarnos con usted!
Somos de Saskatchewan( Canada).
Gracias!
Do we have to pay HST/GST when flipping houses?
Depends - you can be dinged on HST if you substantially renovate the property or if you have your own employees to work on the project.. be sure to check with an accountant that knows your situation
@@RealEstateTaxTips just buying from distressed sellers and reselling. Mere paint and nothing else for renos.
We need the assignment sale tax rules
ruclips.net/video/DeIlscI2tgs/видео.html
Thank you for this great video! Does this new anti-flipping tax apply for all properties in Canada even if it was purchased prior to January 1, 2023? or does it only apply to properties that were purchased after January 2023 and then were flipped within less than 365 days of the holding period? To be more precise, if a pre-sale condo was purchased in January 2021 for long term holding/rental purposes, completed October 2022 (subsequently rented out), and sold September 2023 with 11 months holding period, would the proceeds from this property sale be subject to be taxed as 100% business income?
It applies to closing of the sale happen on or after Jan 1, 2023