Fiscal Tips for the Real Estate Industry

Every year, some investors lose hundreds if not thousands of dollars when they do their tax return. To avoid this, Magex Technologies compiled a list of 5 simple but important fiscal tips related to the real estate industry. Here they are:

1. Buying a Property

If you are buying your first property or if you are incorporated as a company, you can use certain costs of the buying process to get tax credits. For example, when you are a first-time buyer, you can get a total tax rebate of $750, which is 15% of the $5000 non-refundable tax credit.

2. Selling a Property

When you are selling your property, you can also save on some costs, such as the certificate of location, the advertisement, the travel fees, and other fees (notary, realtor, etc.). If you are selling your principal residence, you do not have to pay tax on the capital gain.

3. Expenses Directly Related to Your Income

To lower your taxable income, you can add to your expenses the fees for a bounced cheque or the travel expenses to collect rent.

4. Expenses Related to Renovations and Maintenance

All the expenses related to improving or repairing your property can be deducted from your income to decrease your tax payable. You can add the services you pay for, such as electricity, heat, and internet, to your expenses as well. Remember to keep your invoices!

5. Incorporation Costs 

If you decide to incorporate, don’t forget to deduct the business start-up costs.

To summarize, real estate is a business like any other. You must know how to end the year with a profit. Do not forget the importance of consulting a specialist (accountant, tax specialist) to discuss all your possibilities and to verify the laws, as they change often. You may think it is expensive, but it will allow you to recover your investment and so much more!

We hope these fiscal tips will help you!

Guillaume Poulin

Account Manager

Magex Technologies

Comments are closed.