24) Income & Taxes

Invest for the Long-Term

When filing your income taxes, any income earned out-of-province is “returned” to your province of residence - so if you live in Ontario, you would file an Ontario tax return and include your Alberta rental income.

To maximize your wealth, I always recommend holding a property over the long-term because if you sell the property within a year of closing, you pay tax on the entire profit as if it was income. If you rent it for at least a year, the profit is typically considered a capital gain, and only 50% is taxable. This could be tens of thousands of dollars you are paying to the government needlessly.

All reasonable expenses can be deducted against the rental income on your taxes - just be sure to to keep the receipts!

Example Scenario Comparison

*Assumes that the profit gain pushes you into the highest marginal tax rate in Ontario for the tax year.