Real Estate Investment Income Tax Planning

Presentation on theme: "Real Estate Investment Income Tax Planning"— Presentation transcript:

1 Real Estate Investment Income Tax Planning
房地产投资的税收筹划 Before making real estate investments, make sure you know the tax consequences. You also need to take into account the tax implications of various types of ownership. 做房地产投资, 您需要了解税务后果,和不同类型的财产 所有权的税务影响.

2 1。出租房所得税申报 2。物业的所有权：个人或公司？ 3。费用扣除额和固定资本的CCA？ 4。租赁物业的资本增值收益/损失
1. Income Tax on Canadian Rental Property 2. Ownership: Personal v.s. Corporation 3. Deductions and CCA 4. Rental Property Capital Gain/Loss

3 加拿大税法对于出租收入的费用低扣及摊销和生意收入有所不同。
确定房屋出租是出租收入 或生意收入? 加拿大税法对于出租收入的费用低扣及摊销和生意收入有所不同。 生意收入: 为住客提供了基本服务外的附加服务，如：清洁，安全，及餐饮等。

4 Property income or business income?
T Statement of Business or Professional Activities Line 135 (net) & Line 162 (gross), as part of self-employment income Include in the earned income for working income tax benefit (WITB) refundable medical expense supplement child care expense deduction Subject to Canada Pension Plan (CPP) contribution

5 Property income or business income?
T776 - Statement of Real Estate Rentals Line 126 (net rental income or loss) and Line 160 (gross rental income) Not subject to CPP premiums Not included in working income for the working income tax benefit (WITB) Not included for calculation of the refundable medical expense supplement the child care expense deduction

6 如何区分资本性支出和费用性支出? 特例: 为照顾残障人员进行改造发生的费用 - 全部当年抵扣。
资本性支出和费用性支出的抵税方式有本质的区别。 以下几点可用来判定支出的性质：产生的影响是短期的还是长期的? 只是恢复原状还是改进了功能? 是为了整体的一部分还是为了单独的财产? 价值多少? 申请获取房屋贷款发生的费用均属资本性支出，须按贷款期长短逐年摊销。 申请，评估，审核，及保险费; 担保费;代理费; 及律师费。 出租前对旧房的修理或装修 - 全部作为资本性支出逐年摊销。为出售而进行的修理 - 须作资本性支出处理。 特例: 为照顾残障人员进行改造发生的费用 全部当年抵扣。

7 可抵扣的房租收入的支出项目 可抵扣的房租收入的支出: 广告费; 保险费;利息; 维护费; 管理费; 车辆费; 办公费; 法律费; 会计及其他专业咨询费; 财产税; 工资及福利支出; 差旅费; 水电费; 剪草费; 租约取消费; 及公寓管理费等。 不能抵消房租收入有: 土地转让费; 贷款本金; 及罚金等。 房主本人的劳务费可否的税? 不能。

8 Property rental - expenses
Property rental - What expenses can be deducted from income? Mortgage interest, property taxes, utility costs, house insurance, maintenance costs, advertising, and property management fees.  Rental losses can be used to reduce income from other sources.  If the rental loss exceeds income from other sources, it becomes a non-capital loss, which can be carried back or forward to reduce taxable income in other years. Repairs: If a repair betters the property, the repair should be capitalized and not expensed. Capital cost allowance (CCA) may be claimed based on the purchase price of the building, furniture and fixtures, etc., but not the land, and may not be used to create or increase a rental loss. A change in use of your home from personal residence to rental property, or from rental property to personal residence, can result in a deemed disposition for tax purposes.

9 有关抵扣车辆费用的详细规定 原则上来说，国税局不认为房东需要用汽车来管理出租物业，除非房东有坐落在不同区域的多处出租物业。
如果只有一处房屋出租，必须满足以下所有条件方能抵扣：出租房产座落在你的居住区内; 你个人负责部分或全部财产维修; 及车辆用于运载维修用工具和材料。但用于收房租的车辆使用费不能抵税。 如果你有两处以上房产出租 (两处房产均须在你的居住区外并不在同一地区) 除一处房产情况下的车辆费可抵扣外还可抵扣以下用途的车辆费： 收租用车费; 监工用车费; 及一般管理用车费。

10 租房亏损? 租房给亲朋? 房屋出租支出所占比例? 租房亏损可否抵其他收入? 可以，但不能低于市价出租，人为地创造亏损。
租房亏损? 租房给亲朋? 房屋出租支出所占比例? 租房亏损可否抵其他收入? 可以，但不能低于市价出租，人为地创造亏损。 租房给亲朋发生的费用可否抵税?  可以，但必须和租给外人一样的标准收房租。 房屋出租支出所占比例问题? 所有的支出都要把私人使用的部分去掉，能够申报的只有与房屋出租相关的部分。

11 自用主住宅 “自用主住宅” 须满足以下四条：是一个房产单元; 你部分或全部拥有这个房产; 你或你的家属本年内曾住在那里; 及你指定他为你的自用主住宅。 自用主住宅卖房增值不须申报。但买房亏损不得抵税; 出租部分占比例必须较小; 及房屋折旧不可抵税。 当你出售或考虑出售你的住宅时,你应指定你的自用主住宅。

12 改变房产的用途时税务上的影响? 每当改变房产的用途时，税法上视同房产按市价出售后立即购回作新途之用。
当从自用主住宅变为出租用房时你可选择用途视同不变，但须满足以下条件：申报出租所得，但不抵扣房屋折旧。 但当从出租房屋改为自用主住宅时，增值部分的百分之五十要记入应纳税所得，资本损失部分可冲抵当年，往年，或来年资本收益。 当从出租用房改为自用主住宅时也可选择延后到实际变卖时申报其资本增值，条件是该房屋从未抵扣过折旧。

13 用公司持有出租物业是否享受税率优惠? 只有生意性收入(Active Income)才能享受加拿大小型公司(CCPC)的低税率，出租性质的物业产生的收入属被动收入(Passive Income)，不能享受CCPC的税率优惠。 将出租物业放在公司名下好处是, 如果公司有多位股东，可以做一些税务计划，将收入和支出以管理费、工资等方式分摊出去。此外，如果物业出租产生纠纷，租客要告的不会是个人，而是公司。还有如果公司持有出租物业，租金产生亏损，可以抵减其他方面的增值。如果一直积累亏损额，将来卖出公司时也可用以抵税。

14 总结 加拿大的税法有很多优惠政策，房地产投资做税务计划很有必要，在面对实际的税务问题时，最好向专业税务会计师咨询, 再做决定。
欲了解更多，请联系 AccXpert TaxServices 安可托专业会计事务所 王兵注册税务会计师 - 专业会计及税务服务，可信，快速，低费用.  网址：   致电：    微信： AccXpert-TaxServices           

15 Capital cost allowance
Claim CAA – To Be or not to be? A Real-World Example: James owns a rental property and has been claiming CCA. His marginal tax rate is 33% based on $70,000 of employment income. It’s been ten years and Joe can now sell his rental property for $275,000 to realize a capital gain of $100,000. However, Joe will also have a recapture. Over the last 10 years, Joe claimed $53,700 of CCA which provided tax savings of $17,721 (at a 33% tax rate). When the property is sold, the CCA pool is cleared out and he will realize a recapture of $53,700. After the capital gain was accounted for, Joe will pay tax of $24,702 at a rate of 46% on the recapture. By claiming the CCA annually on the rental property, the recapture cost him $7,000 more in taxes. Conclusion: Whether you should claim CCA depends on your current circumstances, tax rate and long-term objectives. If Joe’s marginal tax rate was at the top of the range, claiming CCA would allow a deferral of tax. In other words he avoids the tax now at a rate of 46% only to pay it later at the same rate.

16 GST/HST Rental Property Rebate
This rebate is available for eligible rental accommodation and for land leased for a residence.  The rental accommodation or land must be intended for long-term use as a residence. You may qualify for this rebate if you: purchased or built a new residential rental property substantially renovated residential rental property made an addition to a multiple-unit residential rental property converted a commercial property into a residential rental property, or leased land for residential purposes (including the lease of sites in a residential trailer park). purchased or built a residential complex that is a residential care facility For more information see the CRA web page GST/HST new residential rental property rebate.

17 Summary capital gains Tax in Canada
Currently 50.00% of realized capital gains are taxed in Canada at an individual's tax rate. Some exceptions apply, such as selling one's primary residence which may be exempt from taxation. For corporations as for individuals, only 50% of realized capital gains are taxable. The net taxable capital gains (which can be calculated as 50% of total capital gains minus 50% of total capital losses) are subject to income tax at normal corporate tax rates. If more than 50% of a small business's income is derived from specified investment business activities (which include income from capital gains) they are not permitted to claim the small business deduction. Unrealized capital gains are not taxed.

18 Rental Property Owned by a Corporation
For a Canadian-controlled corporation, the tax rate applicable to rental income can vary depending on whether the rental activity is considered to be a specified investment business or an active business. A specified investment business is deemed to exist when five or fewer full-time employees are engaged in the property rental activity. Note that if a property is rented to an associated corporation that deducts the rent from its active business income, the rental income will be considered as active business income regardless of the five-employee criterion. If rental losses are expected and the corporation has no other sources of income, ownership by the corporation is generally not beneficial. Shareholders cannot immediately take advantage of losses, since they cannot deduct these losses from their personal income. when expecting to make large and profitable real estate investments, it may be preferable to create a separate corporation for real estate activities, rather than combining the real estate business with other businesses. An advantage of rental property being held by a corporation is that the capital gains deduction (CGD) may be available on the sale of the corporation's shares if it was carrying on an active business. The shares would not be eligible for the CGD if the corporation was carrying on a specified investment business. A major disadvantage of a corporation owning a property is Part I.3 federal tax and the provincial capital tax. The debt as well as the capital invested to acquire the property is part of the taxable capital, while the property does not entitle its owner to the investment allowance. As a result, large amounts of Part I.3 tax and capital tax are payable.

19 Rental Property Owned by a Trust
Ownership by a trust is often suggested for non-tax reasons such as asset protection. Trusts are not subject to Part I.3 tax or the provincial capital tax For tax purposes, trusts are considered to be individuals. Trusts therefore file an income tax return, and the tax rate for inter vivostrusts created to hold rental property is the maximum rate for individuals Trusts compute their rental income in the same way as individuals do. However, in computing their income, trusts are allowed to deduct income payable to the beneficiaries of the trust it is the beneficiaries who must pay the tax on this income. Thus, if all the income is payable to the beneficiaries, the tax payable on the rental income may be reduced by taking advantage of the tax rates or tax status of the beneficiaries The main disadvantage of trusts is the rule on deemed disposition of their assets every 21 years. Also, trusts are subject to the AMT if they incur rental losses

20 Tax Implications between Personal & Corporation’s Rental Property
In Ontario, there is no tax benefit to purchasing the property in a corporation given the fact that the corporate income tax rate for passive rental income is identical to the highest personal marginal income tax rate, 46%.  If the property runs an operating loss and is owned by a corporation, those losses will remain in the corporation and can only be utilized once the rental property incurs a profit. If the property is purchased in one’s personal capacity, any operating losses can be used to offset other personal income. Tax Tip: If you are purchasing a one-off property, in most cases, as long as you can cover off any potential legal liability with insurance, there is minimal benefit of using a corporate structure.

21 Tax Implications between Personal & Corporation’s Rental Property
In Ontario, there is no tax benefit to purchasing the property in a corporation given the fact that the corporate income tax rate for passive rental income is identical to the highest personal marginal income tax rate, 46%.  If the property runs an operating loss and is owned by a corporation, those losses will remain in the corporation and can only be utilized once the rental property incurs a profit. If the property is purchased in one’s personal capacity, any operating losses can be used to offset other personal income. Tax Tip: If you are purchasing a one-off property, in most cases, as long as you can cover off any potential legal liability with insurance, there is minimal benefit of using a corporate structure.

22 Conclusion Purchasing a rental property requires a considerable amount of thought and due diligence prior to the actual acquisition. Having a basic understanding of the income tax consequences can assist in making the final determination to purchase the rental property. For tax planning and taxation services, please contact us at or call