If I am the director of a corporation, that is really only owned by me, and my company is doing well (just like the housing market in my area) - can the corporation purchase a house for me to live in? The reason is that the corporation makes more money than I do, and I'd rather use that money to purchase a home and leave my disposable income to do other things with. I'm asking specifically of doing this in Canada.
2007-03-07 04:35:47 · 0 answers · asked by dangeresque2 2 in Business & Finance ➔ Renting & Real Estate
I think that the idea is that let's say my Corporation could possibly have $200K sitting in the bank in a couple years, that it has already paid taxes on, it would be great to use that as a downpayment or outright purchase rather than it paying me the money, me paying $100K in taxes on that, and then me buying a house with only half (or whatever the fraction is exactly) the original amount of money.
2007-03-07 04:59:10 · update #1
Yes, but your corporation will need to qualify for the mortgage, and I don't know of any conventional residential lenders that will lend to entities other than people or revocable living trusts of people. Also, the free rent would be considered a fringe benefit and be taxable income.
2007-03-07 18:21:59 · answer #1 · answered by SndChaser 5 · 0⤊ 0⤋
A corporation is just a seperate legal entity and it can own property and so forth, at least in America. To my knowledge it is the same in Canada.
However, your bank is not going to lend money to a corporation that is clearly just you trying to get around the personal liability of a mortgage, unless your corporation has extensive credit and a long relationship with the bank.
This is trickier than you think unless you and your company are real high rollers. The solution is to pull a bunch of money out of the corporation for a large down payment and find someone who is willing to carry the financing on the house. They won't care whose name you put the house in.
2007-03-07 04:46:40 · answer #2 · answered by Scott S 2 · 0⤊ 0⤋
I am pretty sure that you will have to pay taxes on the "free" rent that the company is providing. Just as you would if the corporation bought you a bar of gold.
2007-03-07 04:54:02 · answer #3 · answered by NYC_Since_the_90s 6 · 0⤊ 0⤋
Sounds very fishy, you suppose to earn the money to get a house to live in or win the lottery one.
Sounds unreal.
2007-03-07 04:42:28 · answer #4 · answered by sunflare63 7 · 0⤊ 0⤋