{"id":1252,"date":"2022-05-16T14:25:24","date_gmt":"2022-05-16T18:25:24","guid":{"rendered":"https:\/\/www.teamarora.com\/?p=1252"},"modified":"2022-05-16T14:36:04","modified_gmt":"2022-05-16T18:36:04","slug":"capital-gains-tax-in-ontario","status":"publish","type":"post","link":"https:\/\/www.teamarora.com\/capital-gains-tax-in-ontario\/","title":{"rendered":"Real estate investors in Ontario: strategies to avoid capital gains tax"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">How to reduce taxes on the sale of Canadian real estate<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In this article, we&#8217;ll cover everything you need to know about reducing taxes on the sale of real estate in Canada.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">1. Capital gains treatment.<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">First, you can reduce taxes by calling the capital gain from the sale of Canadian real property a capital gain. Capital gains mean that only half the profits from your Canadian real-estate sale will be taxable to you.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Let&#8217;s say that a real property sale profit is $100,000. This means that only $50,000, or half of the gain, would be taxable at your marginal tax rate. This <a href=\"https:\/\/wowa.ca\/calculators\/capital-gain-tax\">formula calculates the profit from real estate sales<\/a> in Canada. Net sales minus cost equals profit or loss. The selling price is the net sales proceeds, while the cost is the original purchase. The original purchase price must be included on the purchase and sales agreement when you purchased the property. The property&#8217;s cost can include closing costs and land transfer tax legal fees for tax purposes. To arrive at net sales proceeds, you can also deduct commissions and selling costs.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">2. Maximize capital improvements<\/span><\/strong><\/p>\n<p><span data-preserver-spaces=\"true\">Maximize capital expenditures in order to maximize capital improvements and lower property sale taxes. Also known as improvements, capital expenditures are also called capital expenditures. A lower price will result in a lower profit when you sell your property.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Let&#8217;s say you decide to replace all your windows. Window replacements can be expected to last between 10-20 years. This will increase the property&#8217;s tax-free life expectancy. These windows can be considered capital improvements and added to your property&#8217;s cost. Because repairs are not considered improvements, they won&#8217;t increase your property&#8217;s value for tax purposes.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Repairs are deductable as a current expense in your Canadian tax return. Repairs include painting, fixing leaky faucets, shampooing carpets and fixing holes.<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">3. Do not claim capital cost allowance.<\/span><\/strong><\/p>\n<p><span data-preserver-spaces=\"true\">You must consider depreciation and capital cost allowance when selling a Canadian property. Tax-deductible depreciation is the cost of physical wear and tear on your property. When you sell depreciable assets, such as Canadian real property, the capital cost allowance that you claimed in previous taxation years must be included within your taxable income for the year of sale. This is called recapture.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Let&#8217;s take, for example, $100,000 in capital cost allowance that you have claimed to date. This means that $100,000 of capital cost allowance you have previously claimed will be added to your taxable income for the year of sale. You will not be able to claim the capital cost allowance if you don&#8217;t. You should calculate the capital gain from your real estate sales. Maximize capital improvements and include capital cost allowance.<\/span><\/p>\n<p>We are working real estate lawyers specialize in helping people with a variety of options when it comes to protecting their investments from capital gains tax. So let us show you our experts expertise by taking a look at your situation and advising on strategies that work for your needs.<\/p>\n<p>Schedule your free consultation now!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How to reduce taxes on the sale of Canadian real estate In this article, we&#8217;ll cover everything you need to know about reducing taxes on the sale of real estate in Canada. 1. Capital gains treatment.\u00a0 First, you can reduce taxes by calling the capital gain from the sale of Canadian real property a capital [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[4],"tags":[34,22],"class_list":["post-1252","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-tips","tag-capital-gains-tax","tag-real-estate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Real estate investors in Ontario: strategies to avoid capital gains tax<\/title>\n<meta name=\"description\" content=\"If you are looking for strategies to avoid capital gains tax when selling your property, then this is the article for you. 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