not2old

its all to scale, how much the small private limited revenues are, minus cost of goods or services sold, operating cost & expenses to wishfully having some retained earnings.

As an owner operator of a limited company, the owner operator taking the smallest of salary as to pay minimum income tax, using all the benefits within the CRA guidelines to deduct business operating from home expenses, vehicle operating cost, phones, gas etc, its possible (fine tuned) to pay minimal personal income tax. Exclude any CCA on the equipment to run the business.

With any luck on having retained earnings, the way to get the money of the company is paying dividends to the owner, principles or directors, all who should be family members.

Then again many small companies are leveraged with loans

Tirytory

I think you're preaching to the converted there Not2old. Even taking all that into account I thought the same thing yesterday with Dbd.. Even incorporations get taxed at 15% in Ontario..

not2old

yes, I know - dbd was talking about his personal income tax not the corporations/company tax.

Even as a proprietorship run operation, not a limited company, given a small revenue of $x, deducting expenses allowed for operating costs, including part of the expenses for operating from his/her house as the legal business address, taking away personal deductions for themselves as well as any spousal deductions - its possible to pay zero income tax on a net $20k gross income without even doing any RRSP deductions.

Its likely also that dbd may be paying his OH minimum that is under the income tax threshold also. If that's the case they could get their income to $24k - not a lot of money, but doable. Whatever formula works for them

Is it possible for dbd living on the farm with a back 40, that has zero mortgage, for he & his OH (with no kids) to live on $20k/year using the benefits of company vehicle, cell phone, gasoline etc?

Its all to scale...depends on what income & what you need to live on

I know that me & my OH with no children have no difficulty living on $20k/yr & we have zero write off's

.

dbd33

Yes, we do all that so as to optimize the use of all available allowances, but the key to tax reduction, as AC should know, is a well organized marital status.

Support payments are taxable in the hands of the recipient, they're deductible from the income of the payer so, if one is primarily concerned with tax issues, an option to consider is a divorce with support payments arranged to suit one's marginal tax band (or if aggressive, one's total income). If enough money is involved then making the recipient "spouse" resident in a low tax regime, such as a non-dom in London, will cause the allowances to be applied in the country of income and the tax to be applied in, well, nowhere really.

Incidentally, when we had a few good years corporately, our tax advisors suggested that they could eliminate almost all taxes by use of foreign corporations and trust arrangements. We didn't have the income to justify the set up and maintenance cost of all that; you need to be seriously rich before you don't have to contribute anything at all to society.

dbd33

No.

not2old

lol

BristolUK

Two of my tenants (both couples) have moved from my duplex to buying their own place so it is possible for rent not to be 'wasted' money.

Not that my duplex is a crappy place of course.

BristolUK

IIRC it wouldn't pay for the market cheese and liquor store bills.

MarkG

Most people I know in the UK bought a decently sized house and have lived in it ever since. The exceptions have been due to marriage, divorce, or moving across the country for a new job.

Of course, they bought in the 90s or earlier, when houses weren't insanely overpriced, and wages went up a significant amount every year.

The 'housing ladder' does not work when prices are perpetually rising and incomes aren't. If you buy a $100,000 condo today instead of a $200,000 house, and your condo is worth $200,000 in five years, the house will probably be worth $400,000 and you're even less able to afford it than now unless your wages have more than doubled.

dbd33

You wait for a crash. The more valuable the property, the bigger the proportionate fall in value so, for example, the condo value falls to $175,000, the house falls to $250,000. The gap is reduced and up you go.

(Note that I have not followed this sensible model or anything remotely like it but a friend in the US did exactly this and it's worked out very well).

christmasoompa

I disagree personally. Despite the fact that my salary is now less than a third of what it was when we first bought 15 years ago, and that my husband's has barely increased, and that property values have been constantly rising in our part of the UK, we have still gone from a grotty one bed in a horrid part of town, to a large detached house with land. That's solely down to increasing the value of each property massively by renovating them and jumping up the ladder each time.

Price rices and incomes not rising aren't great I agree, but that's not the only thing that can help.

not2old

From stargazers, to trends & forecast models, everyone has a different crystal ball.

All the while, the CREA in its latest forecast estimates on December 15th

CREA Updates Resale Housing Forecast | crea.ca


"In 2016, national sales are forecast to reach 498,600, down 1.1 per cent from 2015 as activity in B.C. and Ontario moderates and housing market conditions soften in Alberta.

Sales declines there will offset activity gains in Quebec and Atlantic provinces, where strengthening economic prospects should translate into a slow and steady improvement in sales amid the continuation of affordable prices due to an elevated supply of listings. The exception is in Newfoundland and Labrador, where economic and demographic challenges are expected to persist in 2016.

The national average price is forecast to edge higher by 1.4 per cent to $448,700 in 2016. Price gains in 2016 are forecast to be strongest in Ontario (+2.9 per cent) due to an ongoing shortage of listings for single family homes coupled with strong demand for them in and around the GTA".

dbd33

I didn't read the piece from the real estate association as it always says "good time to buy, unless you want to sell".

I wouldn't bet on any movement in property values except:

- will likely rise over 20 years or so
- will go up and down periodically in-between

even then I wouldn't count on not having to sell when prices have recently fallen; I'd just hope to have stayed long enough to be able to see that fall as a blip.

I've lost money on most of the houses I've had and, while I haven't had to deal with a shortfall sale, I know people who have. If you have uncertain plans or live in a one industry town there's a good case for renting.

MarkG

That's property development, not a 'property ladder'.

MarkG

I know people who've been waiting over ten years for a crash in the UK so they could buy a decent place to live. Governments can follow insane policies for much longer than most people can afford to hold out.

And I'm not convinced that condos will fall less in value than houses; crashes in the UK have typically been quite the opposite, where hardly anyone wanted to buy a flat if they could now afford to buy a house.