Real estate is one of the most powerful tools for building wealth, but it comes with complex tax rules. The difference between a profitable investor and one constantly losing money often lies in how well they manage taxes.
Common Mistakes to Avoid
- Misclassifying Income
Rental income and business income are treated differently by the CRA. Misclassification can lead to penalties or missed deductions. - Ignoring Capital Cost Allowance (CCA)
Many investors fail to claim depreciation on their properties, leaving money on the table. - Overlooking GST/HST on Short-Term Rentals
Airbnb and short-term rentals often trigger GST/HST obligations that many landlords overlook. - Weak Record-Keeping
Poorly documented expenses can lead to deductions being denied during an audit.
In real estate, it’s not what you earn
it’s what you keep that builds wealth.
How Plutocrat Adds Value
Filing early only works if your return is done right. At Plutocrat, we go beyond form-filling. Our advisors review your
Strategies That Work
- Segregate Expenses: Separate personal and property costs to claim the right deductions.
- Plan Sale Timing: The timing of selling properties can affect whether you pay more or less in capital gains tax.
- Ownership Structure: Holding properties personally vs. through a corporation can dramatically change your tax liability.
Smart investing isn’t just about location and timing. True wealth comes when your tax strategy is as sharp as your investment strategy.