Canadians are currently dreaming of going south for their winter, but not just to conquer the cold. Our strong dollar alongside a slumping housing market from the U.S. Spells opportunity for many. Canada and the U.S.A aren’t the same country, and just as much as we’ve in common we’ve differences. Any Canadian investor contemplating putting money in the U.S. Must have basic knowledge of some key differences in between purchasing real estate in Canada versus purchasing real estate in the U.S. Before beginning placing your loonies in Texas or Florida, keep reading. Speak to an accountant that’s experienced with property investment that is American since the states differ with regards to taxation of investment properties.
At the U.S. If it’s purchased within 180 days 1031 Exchanges permit the capital gains to be deferred and rolled to a purchase of a kind of property. This might be done frequently times permitting capital gains to be postponed until the end asset is eventually disposed of rather than substituted, If capital gains are accomplished, the vendor is taxed at 15% of the whole net profit, Property taxes have an inclination to be comparable to those at Canada should you are a Canadian and owns a property in a Southern country like Florida or California, you might have a lot higher Non resident land taxes than either the natives or if you invest in additional U.S.
States, Similar to Canadian taxation regulations, you’ll not be taxed on your main residence from the U.S., you might write off their interest charged on your home. Sell your investment land in Canada and you will pay capital gains tax on 50% of the net profit. Canada doesn’t yet have the option to postpone the gain through an exchange. The Gain or loss is added to your income and your are taxed at their applicable rate, very similar to in the U.S., expenses related to holding an investment land can be written off from the taxable income. Determine if there are Non resident property taxes applicable in the city\/state you are considering, If you already own in the States and sell the property you’ll be required to pay U.S.
Taxes on the sale. You pay the U.S.
First, but still have to file their tax return in Canada. You must claim their income in both nations, pay the applicable taxes, and receive a credit for your Canadian taxes. The Credit crunch or Subprime market meltdown had a remarkable impact on the U.S. Lending environment, and has trickled over their border to Canada.