How realistic are my expectations? London to Toronto
#61
Re: How realistic are my expectations? London to Toronto
In selling the secondary property you have a liability at your tax rate on half of the gain. That means you keep half of the gain and pay a portion of the rest in tax. You still keep most of the gain.
My duplex went at a loss too (luckily the rental income more than made that up) but you can carry forward a negative if you sell another secondary property I believe.
#62
Re: How realistic are my expectations? London to Toronto
I don't understand this objection to paying tax on a portion of a gain.
In selling the secondary property you have a liability at your tax rate on half of the gain. That means you keep half of the gain and pay a portion of the rest in tax. You still keep most of the gain.
My duplex went at a loss too (luckily the rental income more than made that up) but you can carry forward a negative if you sell another secondary property I believe.
In selling the secondary property you have a liability at your tax rate on half of the gain. That means you keep half of the gain and pay a portion of the rest in tax. You still keep most of the gain.
My duplex went at a loss too (luckily the rental income more than made that up) but you can carry forward a negative if you sell another secondary property I believe.
#63
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Re: How realistic are my expectations? London to Toronto
I don't understand this objection to paying tax on a portion of a gain.
In selling the secondary property you have a liability at your tax rate on half of the gain. That means you keep half of the gain and pay a portion of the rest in tax. You still keep most of the gain.
My duplex went at a loss too (luckily the rental income more than made that up) but you can carry forward a negative if you sell another secondary property I believe.
In selling the secondary property you have a liability at your tax rate on half of the gain. That means you keep half of the gain and pay a portion of the rest in tax. You still keep most of the gain.
My duplex went at a loss too (luckily the rental income more than made that up) but you can carry forward a negative if you sell another secondary property I believe.
I don't object to paying tax on a gain .............. but it is something that a newbie might not expect to do, especially if they were planning on using the secondary house(s) to provide for retirement.
3 years ago, our very good friend lost about $250,000 on the second house they built on the adjoining lot to their primary residence. That was on Vancouver Island.
#65
Re: How realistic are my expectations? London to Toronto
Well invest it wisely and you might get some or even all of your investment back. I'd be surprised if some people hadn't done extremely well out of that program as well as getting one of the easiest routes to US PR available out of it.
#66
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Posts: 134
Re: How realistic are my expectations? London to Toronto
We are both under 40. As plans currently stand, we'd like to hold the investment properties to provide us stable rental income for retirement (aged 60). So we'd like to buy in a good upcoming area and keep it for atleast 25 years.
#67
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Re: How realistic are my expectations? London to Toronto
After carefully reading all the replies, I've revised the plan. Does it make more sense now?
Total Budget (remains the same) - 1.5M CAD
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
Total Budget (remains the same) - 1.5M CAD
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
#68
Re: How realistic are my expectations? London to Toronto
Or, do you mean that the profit on the house was such that, even after using their lifetime deductions, losses carried forward, safe income on hand and all other accounting tricks they still had so much money that they had to pay $250,000 in CGT?
In the latter case, this is a problems we should all have.
#69
Re: How realistic are my expectations? London to Toronto
After carefully reading all the replies, I've revised the plan. Does it make more sense now?
Total Budget (remains the same) - 1.5M CAD
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
Total Budget (remains the same) - 1.5M CAD
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
House price/suitability advice you can get here.
#70
Re: How realistic are my expectations? London to Toronto
My account says
T4037 includes Generally, you can apply your net capital losses to taxable capital gains of the three preceding years and to taxable capital gains of any future years.
Good point. The way I read your original comment about a huge tax bill just made me think how big can it be when it's much less than your gain...but if one had plans for the gain without knowing, yes it could scupper them.
Yes, it does seem any capital gains rather than similar transactions to that which gave the loss.
Your net capital loss for 2016 is $17,891. You can use this amount to reduce any taxable capital gains that you report in other years. For more information, see Guide T4037, Capital Gains.
Yes, it does seem any capital gains rather than similar transactions to that which gave the loss.
#71
Re: How realistic are my expectations? London to Toronto
Total Budget (remains the same) - 1.5M CAD
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
House to live in (min 4 bed, 2500 sft) : 1.2M CAD (Oakville, GTA)
Investment properties: 2 investment properties. 150k CAD down payment on each. Mortgage of 150k on each. Hoping to buy 2/3 bed freehold properties - not necessarily in GTA.
Based on what others say that would be some way out. Do you plan on managing yourself or having a management company? Just thinking that there may be problems managing from a distance. My rental was only 30 minutes on foot, 10 minutes by bike or bus. Obviously by car is easier but in winter even that could be problematic if something needed you to be there, depending on timing of snow, ice storms, city plowed ridges across driveways etc.
#72
Joined: Sep 2008
Posts: 12,830
Re: How realistic are my expectations? London to Toronto
So two properties each for $300k.
Based on what others say that would be some way out. Do you plan on managing yourself or having a management company? Just thinking that there may be problems managing from a distance. My rental was only 30 minutes on foot, 10 minutes by bike or bus. Obviously by car is easier but in winter even that could be problematic if something needed you to be there, depending on timing of snow, ice storms, city plowed ridges across driveways etc.
Based on what others say that would be some way out. Do you plan on managing yourself or having a management company? Just thinking that there may be problems managing from a distance. My rental was only 30 minutes on foot, 10 minutes by bike or bus. Obviously by car is easier but in winter even that could be problematic if something needed you to be there, depending on timing of snow, ice storms, city plowed ridges across driveways etc.
#73
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Joined: Feb 2013
Location: BC, Canada
Posts: 3,874
Re: How realistic are my expectations? London to Toronto
So two properties each for $300k.
Based on what others say that would be some way out. Do you plan on managing yourself or having a management company? Just thinking that there may be problems managing from a distance. My rental was only 30 minutes on foot, 10 minutes by bike or bus. Obviously by car is easier but in winter even that could be problematic if something needed you to be there, depending on timing of snow, ice storms, city plowed ridges across driveways etc.
Based on what others say that would be some way out. Do you plan on managing yourself or having a management company? Just thinking that there may be problems managing from a distance. My rental was only 30 minutes on foot, 10 minutes by bike or bus. Obviously by car is easier but in winter even that could be problematic if something needed you to be there, depending on timing of snow, ice storms, city plowed ridges across driveways etc.
Our one-time neighbour rented out the house next door to us for almost 30 years ............. he had some very good tenants, he had others who were terrible. A couple caused major damage to the house before leaving, at least one did a midnight skip having not paid rent for at least 3 months.
One time, it took him over 6 months to get all the repairs done so that it could be rented out again ............... that was 6 months without any income.
I won't even mention the neighbour upsets caused by the renters who had regular fights, broke windows by throwing things through them, etc
The landlord lived less than 15 minutes away by car, and still couldn't keep a handle on it all.
#74
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Joined: Feb 2013
Location: BC, Canada
Posts: 3,874
Re: How realistic are my expectations? London to Toronto
Do I understand correctly that they sold the house for $250,000 less than they spent more on the lot and the cost of the build? That would be quite the miscalculation on a $500,000 house. I suppose it could be $5,000,000 house, in which case it's unfortunate but within the bounds of reasonable risk.
Or, do you mean that the profit on the house was such that, even after using their lifetime deductions, losses carried forward, safe income on hand and all other accounting tricks they still had so much money that they had to pay $250,000 in CGT?
In the latter case, this is a problems we should all have.
Or, do you mean that the profit on the house was such that, even after using their lifetime deductions, losses carried forward, safe income on hand and all other accounting tricks they still had so much money that they had to pay $250,000 in CGT?
In the latter case, this is a problems we should all have.
It was due to the huge increase in value of the house, which was on 1 acre of land although within city limits. She had also made a large profit when selling her main residence a few months before. So the money lost was all in Capital Gains.
#75
Re: How realistic are my expectations? London to Toronto
Well and truly glad I am not into property rentals anymore. It works great when you get a good tenant, horrible when you don't. End up with a grow op and it can be a nightmare. I never took pets, now there is a move in BC for the govt to legislate that a tenancy cannot be refused on the grounds of pets! At the moment it is getting no traction, but who knows. From an investment perspective, don't see any huge gains in property values coming up in the lower priced market, unless buying a fixer upper and fixing it up.
If we do buy a rental one day in Ontario it will have to be a condo for the over 50s that has bylaws banning pets. That’s the only way I would consider it.
It’s because of these shitty tenants that we have negative CGT on the properties we had.