Moving to Canada from US - How it impacts my rental properties?

9 Replies

I am getting a good professional opportunity in Canada and thinking of taking it. I am in US on work visa and I dont see any immediate future of getting my green card. 

I have a primary residence in US and also few investment properties spread across different states here in US. 

I have not read into any details on tax implications here but want to see what are your opinions on keeping this properties here in US or selling them all before moving to canada?

We will anyways be selling our primary residence and put proceeds from it to buying residence in Canada but what about rental properties?

Any advise would be appreciated. TIA

Hello Harpreet, 

Hello from Montreal, Canada :). Goodluck on your move!

Can you clarify why do you feel you need to sell these investment properties? Is it because you are self-managing them now? 

Cheers

Mazin

@Mazin, 

I have not yet thought about what makes more sense: Keeping rental properties as it is and moving or selling it. 

Thats what I wanted to get a opinion on. US will charge me capital gains (15%) if i sell these properties. I am still reading about it. Canada will charge me flat 30% (as i see one of the tax options) if I declare these are foreign investments. 

These properties are all managed my property managers.

What are your thoughts?

Originally posted by @Harpreet Walia :

@Mazin, 

I have not yet thought about what makes more sense: Keeping rental properties as it is and moving or selling it. 

Thats what I wanted to get a opinion on. US will charge me capital gains (15%) if i sell these properties. I am still reading about it. Canada will charge me flat 30% (as i see one of the tax options) if I declare these are foreign investments. 

These properties are all managed my property managers.

What are your thoughts?

I would recommend you find an accountant experienced in cross-border real estate and Canadian taxation and figure out what is the best manner of holding these properties, assuming you would be living in Canada - from both the perspective of taxation and of giving you control over when/how you would patriate earnings to Canada.   In addition, have the accountant identify which steps should be taken prior to your move and which can (or must) be taken afterward.

1(506) 471-4126

if anyone knows an accountant he is mentioning and is actually using that person please post there name and how we can look them up in in kinda the same situation but reversed Thanks   

(416) 900-8639
Originally posted by @Harpreet Walia :

@Mazin, 

I have not yet thought about what makes more sense: Keeping rental properties as it is and moving or selling it. 

Thats what I wanted to get a opinion on. US will charge me capital gains (15%) if i sell these properties. I am still reading about it. Canada will charge me flat 30% (as i see one of the tax options) if I declare these are foreign investments. 

These properties are all managed my property managers.

What are your thoughts?

 Hi @Harpreet Walia, 

Not sure this would help but i'll just tell you my opinion, since i currently have the situation you will have in the future (Canadian but invest in US). 

I generally NEVER make any decision based on how much taxes i will end up paying. To be completely honest, this is the last thing i think about, as there are many ways (with a good accountant) to end up reducing the tax bill. However, in my opinion, this should not be the basis of your decision. 

There are a couple of things that come to mind:

- Are these properties cash flowing today? 

- Are you happy with property managers? i.e. you don't have to personally supervise their work and won't need to be on the ground? 

If the answer is yes, i'm really not sure i can recommend that you ever sell them. If anything, (Depending on how long you've had them), i would try to refinance and get some equity out to invest somewhere else, which will not trigger capital gains. 

Hope this helps

Cheers

Originally posted by @Mazin El-Achkar :
Originally posted by @Harpreet Walia:

@Mazin, 

I have not yet thought about what makes more sense: Keeping rental properties as it is and moving or selling it. 

Thats what I wanted to get a opinion on. US will charge me capital gains (15%) if i sell these properties. I am still reading about it. Canada will charge me flat 30% (as i see one of the tax options) if I declare these are foreign investments. 

These properties are all managed my property managers.

What are your thoughts?

 Hi @Harpreet Walia, 

Not sure this would help but i'll just tell you my opinion, since i currently have the situation you will have in the future (Canadian but invest in US). 

I generally NEVER make any decision based on how much taxes i will end up paying. To be completely honest, this is the last thing i think about, as there are many ways (with a good accountant) to end up reducing the tax bill. However, in my opinion, this should not be the basis of your decision. 

There are a couple of things that come to mind:

- Are these properties cash flowing today? 

- Are you happy with property managers? i.e. you don't have to personally supervise their work and won't need to be on the ground? 

If the answer is yes, i'm really not sure i can recommend that you ever sell them. If anything, (Depending on how long you've had them), i would try to refinance and get some equity out to invest somewhere else, which will not trigger capital gains. 

Hope this helps

Cheers

@Mazin, you pin pointed exactly what i am thinking. All properties are cash flowing (positive :-)) and I am happy with my property managers (Not all of them). 

I am long term buy and hold investor. And you are right, i am already working (atleast on few of them) on taking equity out (1031 exchange) for future investment.

In Canada, I will still try to keep my investments in US for some time (as I know the market here, atleast for few states) until i get familiar with Canadian real estate/market.

Btw, what is the best place for buy and hold investors in Canada right now? May be its a whole different discussion for another post ?

and If anyone can suggest a good accountant for such scenarios (border invesment between canada and US)? Thanks

Originally posted by @Harpreet Walia :

and If anyone can suggest a good accountant for such scenarios (border invesment between canada and US)? Thanks

 Hello Harpreet, I actually did the reverse several years ago, moved from Canada to the US but have kept all my canadian rental properties and continue to look for opportunities there.  As others mentioned find a good accountant who is familiar dealing with both countries. I would recommend George Dube who works with the BDO. Ive used him and along with his colleague Peter Cuttini Im confident they can help you.


All the best!

Originally posted by @Thomas Lorini :
Originally posted by @Harpreet Walia:

and If anyone can suggest a good accountant for such scenarios (border invesment between canada and US)? Thanks

 Hello Harpreet, I actually did the reverse several years ago, moved from Canada to the US but have kept all my canadian rental properties and continue to look for opportunities there.  As others mentioned find a good accountant who is familiar dealing with both countries. I would recommend George Dube who works with the BDO. Ive used him and along with his colleague Peter Cuttini Im confident they can help you.


All the best!

Thanks Thomas. I still  need to get in touch with any accountant but I might keep atleast my rental properties here in US. 

But lets see what accountant says

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