That's who you remain in this little example, as the financier. If you're purchasing from the seller A, and after that you're reselling to the brand-new purchaser C, what winds up occurring is you can do a skip transfer, and go directly from here to here, not pay the transfer tax, and you get the cash in the middle, and you don't need to use transactional financing, and they do not need to understand just how much you spent for it, or just how much you offered it for.
We do not get to do that in the United States. We have to do 2 closings, need to get transactional financing. You have actually got transfer taxes. You've got the transactional financing charges. In fact, Canada has a big benefit when it concerns turns, due to the fact that you don't have all the expenditures. It still indicates you've got to get the offer under agreement, and after that resell the property and find a brand-new purchaser, however it avoids a lot of the costs.
A drawback to Canada is legal entities. Legal entities is a bit of a disadvantage. In the United States, we have something called a LLC. Limited Liability Business, works fantastic genuine estate investors. eXp can be taxed as a sole proprietorship, as a partnership, as a S corporation.
The earnings flows straight to personal. That does not occur in Canada. If you want to establish a legal entity in Canada, you need to set up a corporation, or you can do a minimal collaboration, however that does not really fit if it's just a single person, right? It's a corporation, and here's the important things, the lowest tax earnings bracket for a corporation is twelve percent, from what I comprehend.
That suggests you're being double taxes. If you're doing offers out of a legal entity in Canada, and in many cases you're doing a corporation, you have double tax. You're getting taxed at the corporate level, and after that whatever's left goes back to you personal, and you have to pay tax on that also.
0 
Star