Originally posted by @Cameron Price:
Originally posted by @Andy Holland:
Yes this is true,
Technically the tax rate goes from 4% to 6%.
But in real life is is equal to an increase of around 3 times that of an owner occupant.
Hey man, educate me on this. 6% seems like 1.5 times 4%... am I leaving something out?
Hey Cameron,
Sorry for the delay, in math terms 6% is 1.5 times 4%.
However, for tax purposes it is not that simple, for your primary residence you get a lot of tax breaks such as not paying for schools, and an exemption of the first x $'s etc. But for non owner occupants, not only do you pay 50% more than the owner occupants, you also pay the higher rate on these items that are not included. Which is why the cost increases by approximately 300%.
It is the biggest cost/challenge for making rentals work in my opinion. Because it can really make or break a deal, especially if you are not aware of the true cost.
Good luck, and feel free to contact me if you have any further questions
