PRAGMA Inc.’s Post

Understanding Cross-Border Real Estate Investments: Key Considerations for Canadian Investors: Many Canadians are interested in diversifying their portfolios with U.S. real estate. Whether it’s a vacation rental property on the sunny beaches of #Florida or a furnished executive rental in busy New York, the U.S. offers a diverse range of investment opportunities. Why U.S. Real Estate Is Appealing for Canadians: U.S. real estate offers several advantages to Canadian investors, including a diverse range of property types, potentially higher returns, and a robust rental market. Reflecting this interest, Canadians invested approximately $5.9 billion USD in U.S. residential properties between April 2023 and March 2024, making them a significant presence in the foreign investment landscape for their neighbours to the south. Legal and Tax Considerations: One of the first steps in cross-border real estate investment is understanding the legal and tax implications. Unlike in Canada, the U.S. has a different set of property laws that vary significantly from state to state. As a Canadian purchasing U.S. property, you’ll need to navigate both Canadian and U.S. tax laws. The U.S. imposes a capital gains tax on the sale of property, and you may also be subject to the Foreign Investment in Real Property Tax Act (FIRPTA). U.S. rental income is subject to U.S. federal and state taxes, and investors must file a U.S. tax return. Additionally, Canada taxes worldwide income. However, under the Canada-U.S. Tax Treaty, Canadian investors can claim a foreign tax credit for taxes paid in the U.S., reducing their Canadian tax liability. Financing Your U.S. Investment Financing is often the most stressful aspect for Canadians looking to invest in U.S. real estate. Unlike in Canada, most U.S. lenders require a U.S. credit history, which many Canadian investors lack. This can make securing a mortgage difficult and often more expensive, as some lenders charge a foreign national premium an additional 1.5% to 2% on top of the interest rate due to the perceived risk of lending to non-U.S. residents. #investmentrealestate #cdnecon #usecon #floridarealestate #usrealestate #taxstrategy

More on capital gains 🏛️ The proposed changes to the capital gains tax, including raising the inclusion rate from 50% to 66.7% for individuals with capital gains exceeding $250,000, could prompt investors to sell their properties before the June 25 deadline. This deadline may lead to a surge in real estate selling activity over the next two months, driven by investors seeking to avoid higher taxes. Investors, who currently account for 30% of home purchases in Canada according to the Bank of Canada, own a significant portion of the country's rental properties. While the short timeframe until June 25 may limit immediate activity, experts believe that these tax changes could have a long-term impact by dissuading future investors from entering the Canadian market and potentially causing investment flight from the country's wealthiest individuals. As an alternative to investing in real estate privately, consider investing in a portfolio of real estate properties with our Real Estate Investment Trust. For more information on our REIT and investment opportunities, visit https://lnkd.in/e9wsNhTr ✨ // #realestateinvesting #realestatecanada #reit #markettrends #financialeducation #financialreporting #canadianfinance #westbow #investmentcanada #canadian #westerncanada #assetmanagement #propertymanagement #investwithus #chilliwack #chilliwackbc #calgarybc #sask

Here are some real estate investing terms and strategies: Capital Gains Tax: In Canada, when you sell an investment property, 50% of the capital gains (the difference between the purchase price and selling price) are taxable. If it’s your primary residence, you may be exempt from this through the Principal Residence Exemption. Principal Residence Exemption (PRE): This allows homeowners to sell their primary residence without paying capital gains tax, provided they’ve lived in it for the entire time it was owned. RRSP Home Buyers’ Plan (HBP): This program allows first-time home buyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a home. The withdrawn amount must be repaid to the RRSP over a 15-year period. Flipping: This involves purchasing properties with the intent to renovate and sell them quickly for a profit. Be aware that in Canada, profits from flipping are generally considered business income and taxed at full rates, rather than capital gains. Mortgage Insurance (CMHC): If you are buying a property with a down payment of less than 20%, you are required to purchase mortgage default insurance through the Canada Mortgage and Housing Corporation (CMHC) or a private insurer. Rental Property Depreciation (CCA): You can claim the Capital Cost Allowance (CCA) on your rental property to reduce taxable income by deducting the depreciating value of the property over time. Real Estate Investment Trust (REIT): REITs are companies that own or finance income-generating real estate. Canadian investors can invest in these trusts, which offer the benefits of real estate ownership without direct property management. Assignment Sales: In pre-construction properties, assignment sales allow an investor to sell their interest in the contract to purchase the property before it is completed. There are specific tax implications for assignment sales in Canada, so understanding these is crucial. These are a few key terms and strategies relevant to Canadian real estate investors. #kamyckigroup #realestate #realtors #realestateagent #realestatebroker #brokerage #royallepage #rlp #realestateterms #canadarealestate #realestateinvesting

Wondering about the implications of Canada's recent capital gains tax increase? 🤔 Canada's recent capital gains tax hike has drawn criticism from businesses, raising concerns about the fragile investment landscape and productivity. The tax increase, part of the latest federal budget, aims to generate funds to tackle the housing crisis, adding to growing disaffection among younger voters. Read the full article here: https://lnkd.in/gTNtfQ_J #mortgages #mortgagebroker #mortgagelender #torontomortgages #torontoliving #industrynews

Canada Raises Taxes on Capital Gains | What Real Estate Investors Need to Know? Are you worried about the proposed increase in capital gains tax for real estate investors in Canada? In this video, I dive into the recent buzz about the Canadian government's plan to hike up capital gains tax for real estate investors. As someone with nearly two decades of experience in both real estate and mortgages, I'm here to break it down for you. Join me as I simplify the concept, analyze the proposed changes, and discuss their potential impact on investors and the housing market I hope you find this video helpful and love it. Please feel free to drop your questions in the comment section below. I will be more than happy to answer them all. Please find the full video in the first comment of this post. #RealEstateInvesting #CapitalGainsTax #CanadianRealEstate

🏠 New GST on For-Sale Agreements: What Does It Mean for You? 🏠 The recent GST change on residential sale agreements could affect how much you pay upfront on a new home, impacting buyers and sellers alike. But despite this new cost, owning a home remains one of the best ways to build wealth in Canada. 🏡 With the capital gains exemption on primary residences, homeowners benefit from tax-free growth on their home’s appreciation—something that can’t be ignored in high-demand markets like Vancouver. Curious about how this affects your real estate plans? Reach out, and let’s discuss the best strategies to keep your financial goals on track! 📈 #GSTUpdate #RealEstateCanada #Homeownership #VancouverRealEstate #CapitalGainsExemption #MikeIngelRealtor #BuildWealth #RealEstateInvestment

RECORDING: Navigating the Australian Property Market from the US: A Free Webinar for Aussie Expats — The webinar, aimed at Aussie expats in the US, covered the complexities of buying and investing in Australian property. https://lnkd.in/e5FVWTAw Steven Lee from Odin Mortgage explained the mortgage process for expats, emphasizing the need for a 20% deposit and the impact of foreign income on borrowing power. Sky Hammer from Convergence Buyers Agents highlighted the current market trends, noting strong growth in Perth and regional Queensland, and the importance of strategic planning. Pau Lam from Odin Tax discussed the tax implications, including the lack of a 50% capital gains tax discount for non-residents and the need for proper tax planning. The panel stressed the importance of early planning and professional advice.

𝗛𝗼𝘄 𝗗𝗼𝗲𝘀 𝗧𝗵𝗶𝘀 𝗔𝗳𝗳𝗲𝗰𝘁 𝗬𝗼𝘂𝗿 𝗥𝗥𝗦𝗣 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗢𝗳 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀? On May 8, the finance department confirmed that there are currently no plans to change the tax treatment of REITs. This decision comes after significant pushback from Canada's top five apartment REITs, which collectively manage over 120,000 units. This announcement has lifted a major cloud of uncertainty that loomed over the sector for more than two years, particularly affecting the cost of capital and the ability to develop new housing amid a national shortage. The argument from these REITs has been robust; they emphasize that altering their tax status wouldn't solve affordability issues but would hinder their capacity to invest in the market. Over the past decade, these residential REITs have invested nearly $30,000 per unit in crucial capital projects aimed at enhancing utility systems, energy efficiency, and overall living conditions—contributions that also support Canada’s green initiatives. The REIT structure allows profits to pass through to shareholders who are taxed, rather than at the corporate level. Any shift from this model would have risked making REITs less attractive to investors, potentially impacting the value of portfolios heavily invested in this sector, including those in many Canadians' RRSPs. Are you exploring real estate investments but wary of stock market fluctuations? Discover the benefits of investing in REITs and other real estate options. At Paramount we’re not only a Real Estate Brokerage, we are solution providers. Start by visiting our website to learn more: www.paramountrealestate.ca While you’re there, watch our video 🚀 Join our Passive Investing Program for commercial real estate, where we handle the complexities, and you enjoy the benefits - think of it as 'mailbox money'. 💌 We look forward to working with you. #ParamountRealEstate #ParamountRealEstategta #MelGiannone #PassiveInvesting #RealEstateAdvice #RealEstateInvestment #CREInvesting #CommercialRealEstate #RealEstateMarket #InvestmentOpportunities #MarketTrends #REITs #CanadianREITs #TaxPolicy #Taxation

6 reasons to buy a house for your child Stable Investment: Real estate in Canada has historically shown steady appreciation, offering a secure investment for your children's future. Equity Building: Purchasing a home builds equity over time, providing financial stability and potential for long-term wealth accumulation. Generational Wealth: Buying property for your children establishes a foundation for generational wealth, offering financial security for future generations. Sense of Belonging: A permanent residence fosters a sense of belonging and stability, providing a nurturing environment for your children to thrive. Tax Benefits: Homeownership in Canada offers various tax advantages, including deductions for mortgage interest and property taxes. Future Security: Investing in a property for your children ensures they have a secure and comfortable place to call home, no matter what the future holds. Secure your children's future with a home in Canada. Contact us today to explore your options and make this valuable investment for your family's prosperity. Please feel free to reach me and I will be happy to assist you with any kind of Investment (residential and commercial) in Nova Scotia. Always happy to help! 📞 902-809-9399 ✉️ pavneetsingh@remaxnova.ca 🔍 https://lnkd.in/eUAunJxM 🇨🇦🏡 #Homeownership #Investment #FutureSecurity #CanadaHomes

RECORDING: Navigating the Australian Property Market from the US: A Free Webinar for Aussie Expats — The webinar, aimed at Aussie expats in the US, covered the complexities of buying and investing in Australian property. https://lnkd.in/eepQxRui Steven Lee from Odin Mortgage explained the mortgage process for expats, emphasizing the need for a 20% deposit and the impact of foreign income on borrowing power. Sky Hammer from Convergence Buyers Agents highlighted the current market trends, noting strong growth in Perth and regional Queensland, and the importance of strategic planning. Pau Lam from Odin Tax discussed the tax implications, including the lack of a 50% capital gains tax discount for non-residents and the need for proper tax planning. The panel stressed the importance of early planning and professional advice.