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Can We Buy Primary Residence With Corporation In Canada?
I am planning to buy a home through a home loan and to make the downpayment for the purchase, I am wondering if I can pay from my business account? instead of taking a dividend or paycheck to my account.
I have seen a video stating its possibility when a new corporation is opened and loan is made between these two. Could you elaborate on this.
You can purchase a home through a corporation. The arrangement is such that the corporation uses its cash retained earnings in combination with a bank mortgage (if required) to purchase a property. You then become a tenant and pay fair market value rent to the corporation. There is risk involved with his strategy, because the CRA can argue that you are deriving a personal benefit (taxable) from the use of a corporately owned property in excess of the rents that you paid. In addition, a corporation cannot claim the principal residence exemption when a property is sold.