How Property Flips Are Taxed In Canada

Рет қаралды 3,573

Күн бұрын

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.
The information is provided by ECRB Consulting Inc., RealEstateTaxTips.ca, Cherry Chan Professional Corporation and Cherry Chan.
While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the article or the information, products, services, or related graphics contained on the presentation for any purpose. Any reliance on such information is, therefore, strictly at your own risk.
In no event will we be liable for any loss or damage, including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of or connected with the use of this information.
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Пікірлер: 32

@RealEstateTaxTips Жыл бұрын

Want to stay up-to-date with all the latest news about Real Estate Tax Tips, receive weekly tax tips and free real estate investment resources? Subscribe to our newsletter here: realestatetaxtips.ca/youtube

@bmercedes1233 Жыл бұрын

Great tips Cherry!! Informative as always.

@RealEstateTaxTips Жыл бұрын

Thank you !

@akshar-patel Жыл бұрын

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!

@RealEstateTaxTips Жыл бұрын

Hope these videos are helpful!

@LatinosCanadaELPODCAST 2 ай бұрын

Very important information

@RealEstateTaxTips 2 ай бұрын

Thank you !

@alexcardinal6028 6 ай бұрын

Fantastic video Cherry!

@RealEstateTaxTips 6 ай бұрын

Thank you!

@alexcardinal6028 6 ай бұрын

@@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 $

@olubaba001 Жыл бұрын

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

@RealEstateTaxTips Жыл бұрын

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

@oreade_channel 2 ай бұрын

Thanks this is really helpful. Is downpayment part of acquisition cost?

@elai3147 20 сағат бұрын

thanks for the great video, referring to 12:34 , would contributing to rrsp help to reduce the tax?

@nimitaw1167 Жыл бұрын

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.

@RealEstateTaxTips Жыл бұрын

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.

@nicholasgucciardi8279 9 ай бұрын

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.

@michellepark8865 11 ай бұрын

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?

@RealEstateTaxTips 11 ай бұрын

It applies to closing of the sale happen on or after Jan 1, 2023

@JAGDEEPsingh-vi3xi Жыл бұрын

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?

@RealEstateTaxTips Жыл бұрын

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

@cynthialin425 3 ай бұрын

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.

@RealEstateTaxTips 3 ай бұрын

Possible.

@cynthialin425 3 ай бұрын

what if loss?

@oneconcept22 11 ай бұрын

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?

@RealEstateTaxTips 11 ай бұрын

Flipping rules are applicable to closing happen since Jan 1, 2023

@arvin.realtor 5 ай бұрын

Do we have to pay HST/GST when flipping houses?

@RealEstateTaxTips 5 ай бұрын

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

@arvin.realtor 5 ай бұрын

@@RealEstateTaxTips just buying from distressed sellers and reselling. Mere paint and nothing else for renos.

@prabanamasi2951 Жыл бұрын

We need the assignment sale tax rules

@RealEstateTaxTips Жыл бұрын

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@CirujanaAstralSanadora 9 ай бұрын

Hola Cereza, usted es asesora de bienes inmuebles? De ser asì, quisieramos obtener algun email donde conectarnos con usted! Somos de Saskatchewan( Canada). Gracias!