Buying in a Corporation? or Personal?
- Thread starter melissas
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It would be best to talk to both your lawyer and accountant to get advice specific to your own personal situation.
You will be taxed higher as a corporation than personal. Corporation will not necessarily protect your personal assets.
For myself I register as personal (myself and wife) and make sure I have plenty of liability insurance on property to protect us as much as possible.
Win/Win.
You will be taxed higher as a corporation than personal. Corporation will not necessarily protect your personal assets.
For myself I register as personal (myself and wife) and make sure I have plenty of liability insurance on property to protect us as much as possible.
Win/Win.
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- 13,879
QUOTE (melissas @ Mar 27 2009, 01:09 PM)
My husband and I are getting ready to buy our fist property and are wondering if we should buy it in a corporation or in our personal names?
The answer is NO .. or NOT YET ..
Here are 3 reasons NOT to incorporate for smaller residential properties:
1) It is more difficult to get a mortgage, as not all banks hand out residential mortgages to small properties held in a corporations
2) you will have to sign a personal guarantee .. so in Alberta, for example, you will be personally liable for a mortgage default if in a corporation, whereas a personally held non-insured mortgage will have recourse ONLY against the property, but not you personally ! This is an Alberta advantage that does not, to my knowledge, exist in other provinces !!
3) annual filing and accounting costs .. probably about $2000 to $3000 or more PER YEAR .. depending on complexity
check these posts too:
http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-9751-Tax_Tip__Reasons_to_NOT_incorporate.html
http://myreinspace.com/public_forums/General_Discussion/61-9205-Taking_an_income_from_my_Real_Estate_Business.html
also use the SEARCH function as there are quite a few posts on this topic.
My husband and I are getting ready to buy our fist property and are wondering if we should buy it in a corporation or in our personal names?
The answer is NO .. or NOT YET ..
Here are 3 reasons NOT to incorporate for smaller residential properties:
1) It is more difficult to get a mortgage, as not all banks hand out residential mortgages to small properties held in a corporations
2) you will have to sign a personal guarantee .. so in Alberta, for example, you will be personally liable for a mortgage default if in a corporation, whereas a personally held non-insured mortgage will have recourse ONLY against the property, but not you personally ! This is an Alberta advantage that does not, to my knowledge, exist in other provinces !!
3) annual filing and accounting costs .. probably about $2000 to $3000 or more PER YEAR .. depending on complexity
check these posts too:
http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-9751-Tax_Tip__Reasons_to_NOT_incorporate.html
http://myreinspace.com/public_forums/General_Discussion/61-9205-Taking_an_income_from_my_Real_Estate_Business.html
also use the SEARCH function as there are quite a few posts on this topic.
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- Sep 11, 2007
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- 462
QUOTE (melissas @ Mar 27 2009, 12:09 PM) My husband and I are getting ready to buy our fist property and are wondering if we should buy it in a corporation or in our personal names? Any suggestions would be helpful, thanks!
You`ll have more and better lending options available to you if you put it in your personal name. Not only fully discounted rates, but if you wish even an LOC or combination readvanceable product that would not be availalbe if in your company name.
You`ll have more and better lending options available to you if you put it in your personal name. Not only fully discounted rates, but if you wish even an LOC or combination readvanceable product that would not be availalbe if in your company name.