Tax Planning

Estate Planning Tips for Real Estate Investors

For many Canadians the majority of their wealth is held in personally owned real estate. For most this will be limited to their principal residence however, investment in recreational and real estate investment property also form a substantial part of estates. Due to the nature of real estate, it is important to do estate planning to realize optimum gain and minimize tax implications.


Key Considerations for Real Estate Investment

  • Real estate is not a qualifying investment for the purposes of the Lifetime Capital Gains Exemption
  • Leaving taxable property to a spouse through a spousal rollover in the will defers the tax until the spouse sells the property or dies
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A Well-Structured Will

The Canadian income tax system is structured in such a way that taxpayers and their estates are often liable to pay significant taxes upon their death.

These taxes can represent a large proportion of the value of the deceased’s estate and can significantly reduce the amount of residual assets available for distribution to the estate’s beneficiaries.

Fortunately, the tax an estate will be subject to isn’t set in stone and with a properly structured will, a taxpayer can significantly reduce the taxes payable on their final income tax return (as well as the taxes payable by their estate subsequent to their death).

Leave assets to your spouse

A strategy used to reduce a taxpayer’s liability on a final tax return involves the drafting of a will that leaves assets to their spouse rather than other beneficiaries.

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© Hagan


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Are you paying more tax than you need to?

By Brenda Spiering, Editor,

If you’re not claiming all the tax credits and deductions you’re entitled to, you may be paying more to the government than necessary.

What you can deduct

Deductions from income and tax credits are reported on lines 206 to 485 of your income tax return. So, take some time to review them carefully. There may be steps you can take to maximize the amount you can claim.

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