Tax & Accounting for Pre-Construction Condo Investors & Flips

Canada has no federal real estate tax. What people mean is municipal property tax, and most municipalities calculate it the same way: the assessed value of the property multiplied by the tax rate council sets for that property class, plus any education or area-specific levies the province imposes. The assessed value usually comes from a provincial assessment authority, though in some provinces the municipality assesses its own properties, so check which body issued yours before disputing it, and the rate is reset with each annual budget. Your tax bill shows both figures and the arithmetic.

Usually because the pay for that period is low enough that the basic personal amount covers it. Payroll annualises each cheque, so part-time or irregular hours can produce zero income tax while CPP and EI still come off. Other causes are a TD1 claiming large credits, a claim of exemption from withholding, or being paid as a contractor rather than an employee, in which case nothing is withheld and the tax is yours to set aside and remit.

Yes. The CRA answers individual, business and benefit enquiries by phone, and its Contact the CRA page lists the current numbers and hours for each line. Have your social insurance number or business number, a recent return and your notice of assessment ready, because the agent will verify your identity before discussing an account. For account details, balances and slips, My Account often answers the question faster than the phone.

Rent paid is not deductible on the federal return. Relief comes instead through provincial credits claimed on the provincial form filed with your T1, such as Ontario's energy and property tax credit, Manitoba's renters credit and Quebec's solidarity tax credit, each with its own residency and income tests. Rent is deductible only as a business or employment cost: the work-space-in-the-home share on a T2125, or with an employer-signed form where an employee is required to work from home.

The owner. Municipalities bill the registered owner, so the landlord is responsible and any arrears become a charge against the property rather than the tenant. In practice residential rent is set to cover it, so tenants fund it indirectly. Commercial leases work differently: a net lease commonly requires the tenant to reimburse the property tax directly. For a landlord, property tax on a rental property is a deductible expense against the rental income it relates to.

Yes. Interest on money borrowed to buy or improve a property you rent out is deductible against the rental income, and it is usually the largest expense on the rental statement. The principal portion of each payment is not deductible, so claim the interest only rather than the whole mortgage payment. Prorate the interest where part of the property is personal use. Mortgage interest on the home you live in is not deductible.