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Is it better to buy a home through a corporation or personally?

Expert: Gord Ahier

Cristian asked:

I am a 47 year old physician in Greater Vancouver area in B.C., recently in independent practice and incorporated. I am planning to buy a house (as primary residence) next year, and I wonder if it can be purchased by my corporation and if I can live in it after.

The reason I would prefer to purchase it through the corporation is so that I can pay it in full as fast as possible (within a few years ideally)as opposed to getting a mortgage stretching over many years.

In principle, I am planning to buy it and hold the house for the foreseeable future. What would the pros and cons be in this kind of situation? Is it okay to do like this? Would I be better off buying it in my own name rather than on the corporation?

Gord Ahier answered:

We would always recommend that your residence be owned personally. As an individual you are able to use your principal residence exemption to offset the gain arising on the ultimate sale. This is not available to the corporation.

In addition, there is the issue of a taxable benefit being received by you as an individual for use of a residence provided by your company. In short, corporate ownership allows you to pay for the residence with corporate dollars, but the resulting tax cost especially the taxation of any gain in value negates any benefit received.

Normally, we would recommend using personal funds to acquire the residence and then managing cash flow from the company to pay any remaining mortgage.

About the author

Gordon Ahier
McClurkin Ahier & Company LLP
Phone 519-725-2600 ext. 400
Fax 519-725-2484
Toll Free 877-725-2611
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