My question is: Canadian-specific
I've recently been very interested in the idea of partnering with my family
in buying, fixing up and then reselling homes. It looks like this works
great in the US, however, after mentioning this idea to a realtor here in
the Lower Mainland im not so sure.
What type of tax implications are there for doing something like this? Does
this actually turn out to be a good way to make a profit?
david ingram replies:
If you buy property with the "right" things wrong, being a renovator can be
extremely rewarding and profitable.
By the right things wrong, I mean cosmetic items that can be cleaned up and
- cleaning up the yard
-replacing light fixtures and painting
-maybe a new counter top but not all new cabinets.
However most newcomers and amateurs end up buying a building with structural
problems or they decide to do a kitchen and end up with a nightmare of
expensive rewiring, re plumbing, dry rot and maybe a crumbling foundation.
It is NOT a job for amateurs.
Because it is a BUSINESS, any profits are taxable at regular tax rates in
the US and / or Canada.
CEN-TA Cross Border Services - Tax, Visas, Immigration