Tag: Real Estate Tax

What is the GST/HST of a new residential rental property (NRRP) rebate?

If you paid GST/HST on the purchase of a new residential rental property or substantially renovated residential rental property, you may qualify for the GST/HST NRRP rebate. If your property meets the definition of a qualifying residential unit, this rebate will allow you to receive all or a portion of the GST/HST paid on the … Continue reading What is the GST/HST of a new residential rental property (NRRP) rebate?

If I rent out part of my home while still living in it, are there any tax consequences?

If while living in your home (referred to as a principal residence) you rent out a part of it, there will be tax consequences. For tax purposes, when a principal residence is turned into a rental property, a change-in-use for tax purposes has occurred. A change-in-use means that the house will be considered to have … Continue reading If I rent out part of my home while still living in it, are there any tax consequences?

I have a rental property and for few months of this year, there were no tenants. Can I still claim rental expenses for those months on my tax return?

You can still claim rental expenses for those months as long as you were actively seeking for new tenants and the space was available for rent during the period.    

What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

By way of background, the Section 216 Tax Return reports the net rental profits (i.e. revenues – expenses) earned on an Canadian rental property, which is owned by a Non-resident of Canada. The NR6 Form is a waiver that reduces the withholding tax rate of 25% on gross rents received by the landlord to only … Continue reading What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

Can a non-resident who owns a Canadian rental property choose a tenant to act as his agent in Canada?

No, a tenant who is renting the property (i.e. the payer) cannot act as the agent. A professional rental agent (e.g. property manager) or a family member/friend can be chosen to perform the responsibilities of the agent as long as the individual is a Canadian resident.

How does the Home Buyers Plan repayment work?

You have to pay back the amount withdrawn from your RRSP under the HBP over 15 years beginning the second year after the year of withdrawal. Each repayment is 1/15th of the total amount withdrawn. To make a repayment under the HBP, you must make contributions to your RRSPs in the year the repayment is … Continue reading How does the Home Buyers Plan repayment work?

Do I have to pay tax on capital gains on the sale of my home?

When a principal residence is sold, the gain is not taxable if it has been the person’s principal residence for the whole time it has been owned. There is a principal residence exemption that eliminates the gain. Also, if the property was your principal residence the whole time it was owned you do not need … Continue reading Do I have to pay tax on capital gains on the sale of my home?

What’s the tax payable by non-residents on the sale of Canadian real estate?

If real estate is sold by a non-resident, 25% of the gross sale proceeds is obligated to be withheld by the purchaser and remitted to the Canada Revenue Agency (CRA). The withholding tax amount can be reduced if the vendor acquires a Certificate of Compliance from CRA on time. By filing the form, the withholding … Continue reading What’s the tax payable by non-residents on the sale of Canadian real estate?

Can I claim motor vehicle expenses towards rental property income?

1. If you own at one rental property you can deduct reasonable motor vehicle expenses if you meet all the following conditions: you receive income from only one rental property that is in the general area where you live; you personally do part, or all, of the necessary repairs and maintenance on the property; and … Continue reading Can I claim motor vehicle expenses towards rental property income?

I am selling a rental property that I owned, how will my capital gain being calculated?

Your capital gain will be calculated based on the difference between the adjusted cost base and the selling price. Note that only 50% of the gain is taxable. Normally, the adjusted cost base of the property is the original purchase price plus other costs incurred to make the acquisition, such costs are brokerage fees, installation … Continue reading I am selling a rental property that I owned, how will my capital gain being calculated?

Do I have to pay capital gains tax if I turn my house into a rental property?

When you change your home from your primary residence into a rental property, your home is deemed to be sold at its fair market value at the date of the change. The capital gain is equal to the excess of the fair market value of your home at the date of the conversion over the … Continue reading Do I have to pay capital gains tax if I turn my house into a rental property?

If I have a rental property in the U.S., what do I need to attach with my US tax returns to ensure the IRS accepts the figures reported?

When submitting your tax return to the IRS, you must ensure that all figures that you claim as an expense have the proper documentation submitted with them. Additionally the receipts and invoices you submit along with your tax return must prove: The expense is reasonably considered to be an ordinary expense given the nature of … Continue reading If I have a rental property in the U.S., what do I need to attach with my US tax returns to ensure the IRS accepts the figures reported?

I just sold a rental property that was held within a corporation. What are the tax implications?

When rental property is held within a corporation, the capital gains rules are slightly different. Similar to an individual holding a property, only 50% of the capital gain is taxable. The taxable portion of the capital gain is taxed at a corporate tax rate of approximately 46%. When dividends are paid by the corporation to … Continue reading I just sold a rental property that was held within a corporation. What are the tax implications?

Which US states allow the formation of LLLPs for US real estate investments?

Question: I’m a Canadian citizen and resident. My Canadian accountant told me to purchase US real estate through an LLP or LLLP. Which states allow for LLPs vs LLLPs to be setup? Answer: Unlike LLPs which can be formed in any state, only certain states offer the option for the creation of an LLLP. These … Continue reading Which US states allow the formation of LLLPs for US real estate investments?

What’s the difference between an LLP and LLLP with respect to US real estate purchases?

Question: I live in Canada and I’m a US real estate investor. I want to set up a limited partnership in the US for real estate I own but I have no idea what the difference between an LLP and an LLLP is. Answer: In an LLP (limited liability partnership), the partners assume the management … Continue reading What’s the difference between an LLP and LLLP with respect to US real estate purchases?

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