Buying Personally or Buying in a Corporation

8 Replies

Hello, my name is Jake and I've recently started to invest in residential properties in the Greater Toronto Area (GTA), Ontario. As I continue to grow, does it make sense to continue to purchase properties under my name or should I incorporate a holding company?

@Jake Yune

If your paying cash corporate structure is the way to go.

If your company can get a loan then by all means. But can your company get a loan?

This is the common obstacle.

Thanks for the response Hai. I haven't incorporated a company yet and am looking to finance the properties. Reason behind the question is that I plan to own multiple down the road (4,5+) and was wondering if there were tax benefits to owning them in a corporation.

@Jake Yune I buy every property in a new corporation. For many reasons, but primary among them:

- Insulating liability; and

- Less likelihood of "capping out" with lenders on how many properties I can buy.

@Jake Yune  

You are best to trust your own accountant as they will understand your specific situation.

I have most of mine in a corporation so that it will be easier to pass along the ownership to my sons when I pass away.

And in the meantime, it seems to provide a lower tax rate than if I was to add the income to my personal income.

If you don’t have an accountant now, then look for one that deals specifically with clients with rental properties.

@Jake Yune

@Jake Yune

Yes main reasons are liability and tax structure

As what Roy said consult your accountant

I guess sometime down the road you need to decide whether or not each property requires it's own entity

@Jake Yune

Obtain two distinct professionals’ advice:

Your lawyer

Your accountant

Once you’ve done that, you’ve gotta fit those opinions into your particular circumstances.

There are benefits are drawbacks to each approach. Anyone who says different doesn’t understand at least one of the above persons’ opinion.

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