Tax Question 4 holding property in a corporation Ontario/Canada

[Darryl Good]

Hello All,

A question for my fellow canadians. In Ontario income from property that is owned in a corporation is classed as passive income which is taxed at almost 50%!!!!!!!!!!!

While small businesses are classed as active income and taxed at as low as 13.5%

Very frustrating as running my properties is far from passive.

What is the best tax play here as paying 50% makes me want to cry :)

Thanks so much everyone

[Roy N.]

@Mayu Thava

That approach will work, with the caveat that the operation will need to be of sufficient size to justify the extra overhead (bookkeeping, corporate filings, etc) of two corporations.

For most folks starting out, it makes more {tax} sense to hold the properties in their own name and simply deduct the eligible business costs against all your income.   Once you reach a sufficient size, the properties can be moved into a {100% owned} holding corporation.

Best to work with your accountant to find a structure that meets your current needs and allows for your planned growth.