Limited company in Canada for real estate investing?

[Brandon Ramsay]

I am still new to Real Estate Investing. I have one rental unit at the moment. I have been talking to a couple inventors about partnering up and few other investors about corporations.

Everyone seems to be saying that it is better to start a corporation right at the start and put all the properties under the corporation as it protects yourself legally and can give you a lot of tax benefits with things to write off.

I was wondering (just from people who live or have businesses in Canada) about, if this is something you should definitely do from the start? If it is. Is it better to do a federal corporation right from the start incase you do any traveling and to secure your name right from the get go on a federal level. Anyone's thoughts or opinions on the matter that have knowledge on the topic.

[Roy Cleeves]

Hi @Brandon Ramsay

I did a federal corporation and an Ontario corporation right at the start of my investing back before the year 2000.  I have bought almost all of my properties in my holding company which is the Ontario company.  

I even have properties in Florida that are in that corp.  And I do like the corp instead of personal for those same reasons:  Limited liability, better taxation, easier for estate planning - can leave the company to kids instead of them having to change name and pay estate taxes and/or land transfer taxes.

I did set up the federal corp in case I wanted to buy in different provinces as that was a rule at that time.  It might still be a rule - best to check with a lawyer that may know.

It cost the same to set up the federal corp as it did for the Ontario corp. And the Fed corp also has a $20 a year online filing fee confirming that you had a shareholders meeting each year.   For the extra $20 per year, it is worth having the federal corp just in case it is needed for out of province purchases.