Читать книгу Kickstart Your Corporation - Andrew Feindel - Страница 26

The answer is a qualified yes: you can purchase your principal residence through your corporation, but you usually shouldn't.

Why not? Because you'd be giving up one of the largest benefits the tax code allows, the principal residence exemption. This benefit allows all the gains in our homes to grow tax-free, but the benefit is eliminated if the home is owned by the corporation.

Let's look at the example of a family member of mine, who purchased their home in 1987 for $750,000. Fast-forward to 2017 and this same house was sold for $4,850,000 (a gain of $4.1 million over 30 years)—as a tear-down, believe it or not! Because the house qualified as their principal residence (sheltered under section 40(2)(b) of the Income Tax Act), they didn't have to pay even a cent of tax on the $4.1 million gain—compared to a tax bill of over $1 million if the corporation had owned the house. In a nutshell, if it's your plan to hold (own) the home for many years, or unless you think the house will not appreciate in value, it's best to own your home personally.

However, there are certain situations where one may want to consider owning their principal residence through the corporation.

Let's consider a situation in which you have almost all your funds in the corporation, which would result in a very large personal tax bill to come up with that 25%-plus down payment. Let's also assume we are purchasing a property to own for less than five years, so the likelihood of significant capital appreciation is relatively low.

In this case, the benefit of purchasing the property through the corporation would be to come up with the payments through lightly taxed corporate dollars, as opposed to much more heavily taxed personal dollars. However, given that the house is still a personal-use property (a tax concept that refers to items you own primarily for the personal use or enjoyment of your family and yourself), you would need to either pay rent to the corporation for the equivalent market rent—which results in having to pull out money from the corporation—or take a taxable benefit for the market rent.

The former (paying rent) allows further deductions in the corporation for many of the costs—such as interest, utilities, and hydro—but would likely result in a higher personal tax bill. That's because you would likely need to withdraw double the amount needed for rent in order to pay the tax due on the withdrawn income. This option could also create problems under the new passive income rules (which came into effect for taxation years beginning after 2018), as rental income (paid to your corporation) counts toward the $50,000 threshold.

All in all, the only situations in which we've seen it make sense to have the corporation own your principal residence is when you take a taxable benefit for the imputed rent. (This is a complicated area of tax law, where professional advice is most definitely warranted!)

In making your decision about whether to own your principal residence personally or through your corporation, you will need to estimate and weigh all these costs—loss of the principal residence exemption, potentially higher loan costs when borrowing corporately as opposed to personally—against the potential benefits, which are the savings of after-(corporate)-tax dollars versus after-(personal)-tax dollars.