Why the Tax Benefits of the Real Estate Market Tops the Stock Market
The majority of tax benefits associated with investing in real estate in London Ontario is fairly straightforward. One of the best tax incentives is depreciation that applies to a whole variety of investment properties, including rental houses, apartments, condominiums and commercial buildings.
This is the second of a series called "Why the Real Estate Market Tops the Stock Market"
Depreciation is essentially a "paper loss" for wear, tear and obsolescence - and a big tax incentive because it generates tax savings with no out-of-pocket costs. Those who qualify are entitled to many additional tax deductions such as property taxes, mortgage interest, insurance, maintenance and repairs.
Real estate investors can sell their properties without paying capital gains taxes as long as they exchange them for others of like kind.
To summarize, sell stock in which you have a gain and you'll be paying taxes - there's just no way around it.
if you own stocks in a non tax free account and transfer them into a tax free account and they have gone up in value you trigger a taxable capital gain ...
HOWEVER and here is the sad part - if you transfer them and have incurred a loss at the time of transfer there is no tax deductable capital loss consideration.
But sell appreciated property and if you do it right, you can defer your tax indefinitely.
The tax benefits written here are particular to our Canadian and Ontario tax regulations. Check with your friendly accountant or invest 5 or 6 hours and research what you can do and can't do. It also should go without saying that there is a lot of free advice out there, just be sure you know where it is coming from and what are the motives of the free advisor?
Remember, there are paper profits and real profit in your pocket. If you find a grocery store that will take paper profits at the checkout, I may have a bridge for sale, it is in Brooklyn and have I got a deal for you!
If you want investment properties in London from duplexes to commercial space to buy or lease in London, I can be reached at 519-435-1600/