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That's who you are in this little example, as the investor. If you're purchasing from the seller A, and then you're reselling to the brand-new purchaser C, what ends 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 have to utilize transactional funding, and they do not have to understand just how much you paid for it, or just how much you sold it for.

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We don't get to do that in the United States. We have to do two closings, need to get transactional funding.  Check it Out  have actually got transfer taxes. You have actually got the transactional financing fees. In fact, Canada has a substantial advantage when it pertains to flips, since you do not have all the expenses. It still implies you have actually got to get the deal under contract, and after that resell the property and discover a new purchaser, but it avoids a lot of the expenditures.

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A drawback to Canada is legal entities. Legal entities is a bit of a downside. In the United States, we have something called a LLC. Restricted Liability Company, works fantastic for genuine estate investors. It can be taxed as a sole proprietorship, as a collaboration, as a S corporation.

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The income flows straight to personal. That does not happen in Canada. If you wish to set up a legal entity in Canada, you need to establish a corporation, or you can do a restricted partnership, but that does not really fit if it's simply one individual, right? It's a corporation, and here's the important things, the least expensive tax earnings bracket for a corporation is twelve percent, from what I understand.

That indicates you're being double taxes. If you're doing deals out of a legal entity in Canada, and for the most part you're doing a corporation, you have double tax. You're getting taxed at the corporate level, and then whatever's left goes back to you personal, and you have to pay tax on that also.