There are several factors to consider when deciding whether to own a property under a personal name or a corporation name. Here are some benefits of each:
Benefits of owning a property under personal name:
- Simplicity: Owning a property under a personal name is a simpler process than setting up a corporation, which involves more legal and administrative work.
- Tax benefits: If you own a property under your personal name, you may be able to claim certain deductions on your personal income tax return, such as mortgage interest and property taxes. However, the amount of the deductions may depend on your income level and other factors.
- Flexibility: Owning a property under a personal name gives you more flexibility to use the property for personal purposes or to rent it out, as you see fit.
Benefits of owning a property under corporation name:
- Liability protection: If you own a property under a corporation name, your personal assets may be protected in case of a lawsuit or other legal issue related to the property.
- Tax benefits: A corporation may be able to claim certain deductions on its income tax return that a person cannot, such as depreciation and certain expenses related to the property.
- Estate planning: If you plan to pass on the property to your heirs, owning it under a corporation name may make it easier to transfer ownership and avoid certain tax issues.
However, there are additional costs associated with a corporation. There is a cost to create the corporation and also the accounting cost for the corporation is a lot more than a personal accountant.
It’s important to note that the decision of whether to own a property under a personal name or corporation name should be made in consultation with a lawyer, accountant, or financial advisor who can provide personalized advice based on your specific situation and goals.