I'm possibly moving to Canada and I was wondering what the pros and cons of flipping real estate in BC are. Specifically, my move would most likely be to Vancouver Island, so if there are any specifics about this area anyone has insight on, I would appreciate it.
Flipping houses can be done in any market. The objective is still the same. Buy properties below market value and flip for a profit. Ask around to see if there are any investor clubs you can attend to get a better understanding of your neighborhood and who the key players are.
Thank you. Specifically, I've been researching financing and lending practices in Canada and it seems as if they are a lot tighter. Also, as a potential investor from the States are there laws that would bar me from holding a lot of property or flipping multiple properties in a given time period? Just wondering what kind of experience or challenges others have faced in going into this market.
Taxes. Taxes, Taxes.
Federal Taxes, you or the company would have to pay tax based on Active income which is approx 40% depending on circumstances.
Also active Flippers in Canada HAVE to pay HST. 13% on the profit
Flipping in Canada can be done, although a lot of research has to go into the process
We also have land transfer taxes here in Canada, which means significant taxes are paid by the purchaser on each real estate transaction.
I'm not sure what the rates are in BC, but in Toronto, as an example, a $500,000 home purchase (which is well below the average price) would be taxed $12,200.
Here's a link to more info and a calculator: http://www.ratehub.ca/land-transfer-tax
So, for re-habbers you have to consider paying the $12M on purchase and then consider that the buyer will again have to pay (a higher) tax when they buy the property from you after you complete the re-hab.
Great calculator. Thanks Andrew
Besides taxes, general labour and some material costs can be more compared to the States.
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