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Real Estate Considerations: Taxes

In this world, nothing can be said to be certain, except death and taxes.  ~Benjamin Franklin

Taxes are inevitable.  Instead of brooding over dollars lost, we can better spend our energy on how to better optimize our investment portfolio that are less susceptible to taxes.  Real estate offers certain tax benefits for you as a shrewd investor, especially when you develop an investment strategy with taxes in mind.

Taxes erode the return on investments that yield a fixed return, such as bank accounts (interest payments), bonds (coupons), and Guaranteed Investment Certificates (GIC return).  Of course, your Tax-Free savings account is free from all that.  Stocks and other equities put your principal at risk, and it’s also exposed to capital gains tax.

Real estate investments are subject to a reduced tax rate.  Tax advantages range from tax-free capital gains on principal residence properties to savings as high as 50% on taxes levied on capital gains from investment properties.  You’ll also be able to deduct investment expenses and write off any depreciation in the assessed property value.

Take a moment to read our extensive list of Tax Rebates and Grants for first-time home-buyers in our FAQ section.

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