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I am interested in incorporating in the near future. My only question is how would incorporating affect capital gains made from selling real estate? You mentioned that gains under a corporation are taxed up to 60% - so isn't it better to not incorporate, and pay only 50% of individual tax?
Also, if my rental income is less than $50,000 per annum, it would be beneficial for me to incorporate, since that will be taxed at a lower rate (my personal marginal tax rate)?
I'll be sharing your responses with my partner who will also be a director and owner of the corporation.
It's not a good idea to own real estate in a corporation anymore, because of the high tax on capital gains and passive investment income. The tax rates are lower for individuals for real estate investments.
However, you could make a corporation the 'title holder' for real estate investments. This means a corporation would hold real estate in trust for you / your partner who are the beneficial owners. In this way, you and your partner will pay taxes on income and gains generated from real estate investments, but the corporation will have the operational and financial risk as the title holder.