Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m A U G U S T 2 0 1 7 19 But property ownership brings obliga- tions. There are tax considerations, and advantages, at the time of purchase, during ownership for non-personal use property and again at closing. "It's all great and wonderful to buy real estate, but don't forget, you still have the land transfer tax going in," Andrew Fortis, a partner with Hummingbird Lawyers LLP in Concord, Ont., points out. Ontario now applies a two-per-cent land transfer rate to homes valued at $400,000 or more. And it introduced a new rate of 2.5 per cent for properties valued at $2 million or more. In addition, the city of Toronto imposes its own land transfer tax as well as a $75 administration charge. So, from a tax perspective alone, it is more expensive to buy a home in the country's largest city now than it was last year. Add on the new foreign buyers tax and the extra costs can be substantial. Much of the owners' obligations turn on how they frame the purchase and use of the property. Whether it is for personal use or meant to generate rental income and if it's just a speculative buy intended to be flipped or designed for a long-term invest- ment determines the tax implications and can help steer the ownership structure, says accountant Kim Moody, Calgary-based dir- ector of Moodys Gartner Tax Law LLP. GST/HST is always a consideration and can apply when collecting rent, but it could also be added to the acquisition costs, although it can be offset. "I think it's always good to look at what the GST/HST implications are on any acquisition of property," says Moody. "There are no easy rules of thumb on acqui- sition of real estate." During ownership, expenses of a rent- al property such as maintenance, repairs, operating expenses and property manage- ment fees can be written off against the taxes. O'Keefe says property owners have found that the more numerous the proper- ties, the greater chance the owner has of leveraging one property against the other to find greater tax benefits. The option for individuals wanting to buy several properties who want to distance themselves somewhat from the asset is to go in on purchases with other people. Win- nipeg real estate lawyer Rick Adams, a part- ner at Thompson Dorfman Sweatman LLP, says buyers' groups have been quite active THE BIG ISSUE WE'RE FINDING IS [PEOPLE ARE] STEERING AWAY FROM THE OLD-FASHIONED VIEW OF INVESTING INTO STOCKS AND BONDS AND GICS AND THEY'RE ACTUALLY MOVING TOWARD SOMETHING MORE TANGIBLE. DARREN O'KEEFE, Cox & Palmer *Insurance by FCT Insurance Company Ltd., with the exception of commercial policies, which are provided jointly by FCT Insurance Company Ltd. and First American Title Insurance Company. Services by First Canadian Title Company Limited. The services company does not provide insurance products.. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. ®Registered Trademark of First American Financial Corporation. FCT protects you before, during and after * a real-estate transaction. Get protected today. Residential Solutions 1.866.804.3122 Commercial Solutions 1.866.804.3112 Untitled-1 1 2017-01-18 10:35 AM

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