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Residential Real Estate Investors Taxes

Welcome to the world of Residential Real Estate Investor Taxes. We at Business360 CPA are your trusted guides through the intricate maze of tax regulations and laws governing residential real estate investments at various government levels. Our mission is simple, yet crucial: to assist you in minimizing your tax liability and steering clear of severe administrative penalties. We share your goal of preserving your hard-earned money so that you can confidently set out on the path to expanding your investments.

List of Services

Ready to take control of your residential real estate investments and ensure your hard-earned money stays where it belongs – with you? Explore our range of services below:

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Map out the tax various tax laws, government jurisdictions, and filing deadlines you must comply with to avoid harsh administrative penalties,

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Identify required information you must gather for compliance with tax laws.

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Tax planning services to assist with minimizing tax and reporting requirement.

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Prepare and file tax returns as required, including:

  • Personal, corporate or trust tax returns
  • Federal underused housing tax
  • BC Foreign Buyers Tax
  • Vancouver empty homes tax
  • BC Speculation and Vacancy Tax
  • BC Real Estate Tax
  • BC Landowners Transparency Act Registry Disclosures

Navigating Canada’s Complex Real Estate Taxes:

In the face of Canada’s rapidly growing population and the resulting housing shortage and soaring prices, the government, especially in provinces like BC, has introduced a slew of intricate taxes. With the population surpassing 40.2 million in 2023 and a significant underestimation of growth rates, the housing demand continues to outpace supply.

Business360.CPA is here to help you unravel the complexities of these real estate taxes, shielding you from hefty penalties and mitigating the burden of compliance costs where possible. We delve into the intricacies of seven real estate investment taxes, clarifying who is subject to them, which properties are taxable, and what exemptions or credits might apply.

What You Need to Know About Real Estate Taxes:

We explore seven significant real estate taxes, ranging from the Federal Underused Housing Tax with its extensive anti-avoidance regulations to BC’s Foreign Buyers Tax, imposing substantial penalties on non-compliance.

1. Federal Underused Housing Tax

The estimate was for population growth of 3.5 million, but we grew by 5 million. A new tax for 2022, first filings due October 31, 2023.

  • An annual tax return 10 pages long is required.
  • If taxable, taxed at 1% of property value each year.
  • carries significant administrative and late penalties.
  • Serious anti-avoidance rules and penalties
  • Tax applies to non-residents, non-Canadians, Canadians, and residents, each having different rules.
2. Property Transfer Tax

The Property Transfer Tax form has been expanded to include disclosure requirements not only for directly registered owners but also for Corporations and Trusts acquiring property, they must disclose individuals with a significant interest or are beneficiaries.

Disclosure requirements include the name, DOB, citizenship, contract details, and tax identification number. These disclosure requirements are also coordinated with new transparency registry requirements for a corporation’s beneficial owners and for a Trust’s beneficiaries.

Finally, these added additional disclosure requirements are now subject to significant anti-avoidance tax penalties if transactions disclosed are specifically designed to avoid tax, rather than to reflect the bona fide purpose of the transaction.

3. Vancouver’s Empty Homes Tax
  • Like the others, rules to include or exclude certain persons/properties are complicated, there is more, local government has to power to enter the home at any time to prove their point!
4. BC’s Speculation and Vacancy Tax
  • A province-wide tax that applies only to “specified” urban centers.
  • Challenges here are to determine not only who pays and what property is subject to tax, but also what rate of tax applies. Rules are over 100 pages long!
  • Does where you earn income matter?
  • Is the property really a principal residence?
  • If renting, does who is renting matter?
  • Here you may also qualify for certain tax credits?
5.BC Real Estate Tax

We can help you navigate the rules and take advantage of exceptions to rules when they exist. We will help you with:

  • What tax planning opportunities still exist?
  • Which of the myriad of new local real estate taxes apply and to gather necessary information and file tax returns on time.
6. BC’s Foreign Buyers Tax
  • This is a 20% tax based on property value, usually payable by the buyer. It is in addition to the normal 1% property transfer tax.
  • Focus on beneficial ownership, and trustees to make sure the tax is paid.
  • Complex anti-avoidance rules with hefty penalties to be avoided.
7. BC Landowner Transparency Act Disclosure Registry

This is not really a tax, but a requirement to regularly disclose who really owns properties. It is meant to help administer other taxes by opening up information on who really holds true beneficial ownership.

  • To avoid HUGE administrative penalties, we assist clients comply with the rules under the act and filing on time. Penalties start at $50,000 plus 5% of the value of the property.
  • To avoid serious breaches of the law, we assist with compliance with the rules. Penalties start at $100,000 and 15% of property value!

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