Taxes and investing in real estate in Canada
Have you ever given a thought on dealing with investing in real estate in Canada? And, what the situation will be regarding taxes in that case? Now, most tax consultants in Toronto and other Canadian cities will tell you that real estate is, in fact, a good investment, until you face the tax implications. That can be quite taxing!
So, how to handle these type of situations?
The mortgage factor
When investing in real estate, it’s important to deduct interest. The most common type is possibly the mortgage interest. This pays off the interest paid during the mortgage. But, the primary part of it is considered a repayment of a debt which makes it impossible to fall under tax-deductible.
Expenses due to vehicles
Real estate investors receiving income from one rental property can deduct any motor vehicle expenses incurred. But, that’ll happen only if you repair the required parts on the rented property. Or, you could transport the tools required for the vehicle, to the property.
The tax troubles
Let’s talk about the real troubles that you could get into in this case – the repairs and maintenance. Small repairs and the general regular maintenance of your property are all considered as expenses, and therefore, deducted from the income tax. But, you can’t put a value on your own labor, can you? That is one aspect, where you might falter if you don’t seek help. Although it is more complicated than it sounds, tax consultation services provide a fair outlook on this aspect to help you with your difficulty.
Moreover, there are the long-lasting investments that you can make on your property. It could be a kitchen, or a new bathroom. Whatever it be, such investments are considered under capital expenses while filing, and could potentially amount to a lot if taken lightly.
Being a Canadian tax consulting service, we, at The Accounting & Tax, provide private and corporate solutions to your tax problems in and outside Toronto. That includes the entire real estate scheme as well. We offer valuable advice on how to evade tax related problems and how to tackle them better – we’ll guide you through all of it with smoothness. Whenever you need any tax-related consultation, we’ll be rendering our best services to get you through it!
