Quote:
Originally Posted by Hehe
Management company does nothing to save you taxes. You could write off mortgages (interest) and taxes if your company owns the house and its business is to rent out houses. But then you'd factor in the property transfer tax (assuming the house is currently not under the company's name), capital gain tax (unless it's your primary residence, which it doesn't look like the case) and corporate tax on any earning (before it can be passed to you, which you'd then be taxed again on personal level).
It could make sense if you plan to do it long term with multiple properties. So, any earning would be re-invested rather than given to you as dividend.
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Feel free to correct me but from my understanding, renting out under a company is not as easy.
1. Depends on how much you earn from the house. If you're renting out for $1500-2000 a month, you annual revenue is what? $24,000? Incorporating it, and paying all the annual report fees, hiring an accountant to do year end and all, it may not be worth it being so little money.
2. If the house is under the company and you're trying to get any sort of mortgage or financing, I believe it'll fall into commercial banking and it'll be a different way of going through the bank. I heard it's a lot tougher.
3. There is a plus with having a company. Corporate tax rate is 13%. But if your rental income is not a whole lot, personal tax rate would still be better.
As for scamming, i don't think it's scamming CRA. It's tax avoision not tax evasion. Perfectly legal and I believe our school system should teach this more honestly.