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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 buyer C, what winds up taking place is you can do an avoid transfer, and go straight from here to here, not pay the transfer tax, and you get the cash in the middle, and you don't have to use transactional funding, and they do not need to know 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 need to do 2 closings, need to get transactional funding. You have actually got transfer taxes. You have actually got the transactional funding fees. In fact, Canada has a substantial benefit when it concerns turns, due to the fact that you do not have all the expenditures. This Website indicates you've got to get the offer under contract, and after that resell the residential or commercial property and discover a brand-new buyer, but it prevents a lot of the costs.

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

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The earnings flows straight to personal. That does not happen in Canada. If you desire to establish a legal entity in Canada, you have to establish a corporation, or you can do a limited partnership, however that doesn't actually fit if it's simply a single person, right? It's a corporation, and here's the important things, the most affordable tax earnings bracket for a corporation is twelve percent, from what I understand.

That means you're being double taxes. If you're doing deals out of a legal entity in Canada, and in the majority of cases you're doing a corporation, you have double taxation. You're getting taxed at the corporate level, and then whatever's left returns to you individual, and you have to pay tax on that too.