Non-Resident Taxes

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Non-Resident Tax:
A Sleeping Bear with a Big Bite.

As a real estate lawyer, I was happy to have one of my favourite realtors send me a new deal where I would be the seller’s lawyer. The first sign of trouble was a big add-on clause that confirmed the sellers were non-residents of Canada. “Uh-oh, could be trouble,” was my first reaction. Then I thought, “if the contract is making a special note that the sellers are non-residents, maybe they have the non-resident tax thing under control…?” When I chatted with the sellers and asked the question, no such luck. They knew nothing about any Canadian tax they might have to pay as non-residents and, in fact, had done nothing about tax of any kind in the 12 years they had owned the property. Now I’m really concerned and here’s why. Continue reading

Multifamily Location Is Key

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Podcast Episode 58:
You Are Buying the Neighbourhood.”

When buying a property, you are buying the neighbourhood and neighbourhoods are not homogenous. Do some diligence around schools opening or closing, new public transit soon or in the works, and rezoning. Check parking lots and dumpsters where you intend to buy; these will give you an informal tenant profile. Any environmental considerations?

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as). Continue reading

Inspecting a Multifamily Property

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Podcast Episode 57:
All the Suites Look Just Like this One.”

When buying a multifamily building, inspect all the suites. Your vision of what is satisfactory and the vision of a seller anxious to sell are likely to be completely different. Failure to inspect meant substantial extra expense after closing for this investor.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as). Continue reading

Multifamily – Mortgages and Unrented Suites

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Podcast Episode 56:
You’ve Got How Many Vacancies?”

This is the story of one investor’s path from single-family dwellings to multifamily properties. Multifamily lenders fund mortgages based on rental revenue. On closing day, every vacancy reduces the amount of mortgage money. What does it mean when two vacancies turn into eighteen vacancies on closing date?

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as). Continue reading

Tax Planning Equals Profit

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Taxes: A Penny Saved Is a Penny Earned.

Do you own a business or a substantial amount of real estate? Let’s start with a few simple propositions:

  1. You want to pay as little tax as possible both while you are an owner and then when you sell.
  2. Tax rules for Canada are set out in the incredibly complicated Income Tax Act.
  3. Sophisticated, conservative tax planning can reduce your tax substantially.

Continue reading

Buying Foreign Property

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Watch Out Buying In Mexico…

A few years ago my sweetie pie Donna and I spent a lot of time in a little Mexican town called Melaque. We stayed in a beachfront Mexican hotel called the Santa Maria, at the time inexpensive and very friendly. Lots of other Canadians and Americans came down and stayed there for the whole winter. The non-operating hotel restaurant was right on the beach. All the hotel residents used it for their own cooking and for regular fantastic nights of potluck and entertainment. It was paradise!

Frequently the talk turned to, “wouldn’t it be great if we had a place down here.” Some people actually bought property going through a completely unfamiliar buying process. There was property also called ‘ejido‘ land. Continue reading

Mortgage Delays

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Podcast Episode 55:
It Took How Long?”

Many things can slow down a mortgage application. Two weeks is a minimum for your financing condition, but some sellers might not like it; getting pre-approved is a safer option. To avoid human error, make sure to read over your own mortgage documents carefully.

Download the audio file HERE and the text/handout HERE.
(control click or right click + save as). Continue reading