How we help
- Direct vs. corporate vs. partnership vs. trust ownership analysis
- FIRPTA exposure modelling for Canadian buyers of US property
- Section 116 / TCP analysis for US buyers of Canadian property
- Imputed-rent (ITA s. 15) review for corporate-owned snowbird residences
- US estate-tax exposure quantification under treaty Article XXIX-B
- Provincial transfer-tax and foreign-buyer surcharge analysis (Ontario, BC)
The structure question
Every cross-border real-estate purchase comes down to: who (or what) holds title. The four common options are direct individual ownership, ownership through a corporation in either country, ownership through a partnership, and ownership through a trust. Each has different income-tax, estate-tax, transfer-tax, and audit-risk consequences, and the right answer depends on the property type, the intended use, and the buyer's broader profile.
Canadians buying US real estate
The classic case is the Florida or Arizona snowbird residence. Direct individual ownership is the simplest and produces the most favourable income-tax treatment on rent (effectively-connected income, eligible for net-of-expense reporting on Form 1040-NR) and on resale (long-term-capital-gains rates after one year). The downside is exposure to US estate tax — the property is a US-situs asset, and at death it's in the gross estate (see the US Estate Tax for Canadians page).
The alternative — ownership through a Canadian corporation — removes the US-situs exposure but creates a different problem: imputed-rent income under Section 15 of the Canadian Income Tax Act when the shareholder uses the property personally. This is sometimes called the "Section 15 trap." Properly-structured shareholder rental arrangements at fair market rent address the issue, but they're not free of complexity.
A partnership structure can sometimes thread the needle, holding title in a way that's not US-situs for estate-tax purposes but not subject to Section 15 imputed rent either. The partnership must have substance and economic reality to be respected.
Americans buying Canadian real estate
The mirror image is an American buying Canadian real estate. Direct individual ownership is again the simplest. The Canadian rental income is subject to Part XIII withholding under Section 215 (25% of gross rents unless an NR6 election is filed for net-rental treatment under Section 216). On resale, the gain is taxable in Canada as Canadian-source gain (TCP), and the Section 116 clearance certificate process applies (see the Section 116 page).
Provincial transfer taxes and foreign-buyer surcharges have changed the cost calculus materially in recent years. Ontario, British Columbia, and certain municipalities now impose foreign-buyer surcharges of 20–25% on residential real estate, which can dwarf the standard land-transfer tax. These surcharges apply to non-resident individual buyers AND to certain Canadian corporations with non-resident control.
Holding through a trust
For inter-generational planning — where the property is intended to pass to children with minimal additional tax — a properly-constituted irrevocable trust can hold the property outside the original purchaser's estate. The structure must be set up before the purchase and properly funded; transferring already-owned property to a trust triggers different consequences in both countries.
How we work the file
Pre-purchase, we model the four structure options against the client's specific profile (residency, family situation, expected holding period, exit plan) and recommend the structure with the lowest combined tax cost over the projected ownership horizon. We work with the closing solicitor on the title document, set up any required entities, and coordinate with the client's tax-preparer on ongoing annual compliance.
What to expect when you call us
Your first call is a free, no-obligation consultation with a tax lawyer. We will review the details of your situation, explain your options under the Income Tax Act and CRA administrative practice, and give you a clear, fixed-fee quote if you choose to retain us. Your consultation is confidential, and once we are retained, communications are protected by solicitor–client privilege.
If you retain us, we begin work within 24 hours of being retained.
Frequently asked questions
Is the consultation really free?
Yes. Most cases qualify for a free, no-obligation consultation with one of our tax lawyers. During the call we'll review your situation, explain your options, and give you a clear quote if you decide to retain us.
What does a tax lawyer do that an accountant does not?
A tax lawyer focuses on the legal side of tax — disputes, litigation, and the structuring of transactions in light of the law and anti-avoidance rules. That includes representing taxpayers in CRA audits and objections, appearing at the Tax Court of Canada, defending penalties and director or derivative liability, and designing reorganizations such as section 85 rollovers and estate freezes.
The most practical distinction is privilege. Communications with a lawyer are generally protected by solicitor-client privilege, while communications with an accountant generally are not and can be demanded by the CRA. Where the facts are sensitive or the matter could become contentious, that protection matters.
Lawyers and accountants often work together — the accountant on the numbers and filings, the lawyer on strategy, privilege, and the legal record. Barrett Tax Law regularly coordinates with a client's existing accountant.
Do you serve all of Canada?
Yes. Barrett Tax Law represents clients across Canada. We have offices and local phone lines in Toronto, Calgary, Edmonton, Fort McMurray, Ottawa, Vancouver, and Winnipeg, plus a national toll-free line at 1-877-882-9829.
Who is Barrett Tax Law and what areas does the firm handle?
Barrett Tax Law is a Canadian boutique tax law firm that represents individuals and businesses in their dealings with the Canada Revenue Agency. The firm's work spans CRA audits and disputes, voluntary disclosures, Tax Court of Canada litigation, collections matters, and corporate and estate tax planning.
The firm was founded in 2009 and has represented many thousands of clients across Canada. Its head office is in Concord, Ontario (Vaughan), and it serves clients nationwide. You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX).
Most matters qualify for a free, no-obligation consultation, and most are quoted on a fixed-fee basis once scope is understood, so the cost is known before work begins.
What does a tax lawyer do that an accountant cannot?
Accountants prepare returns and financial statements. Tax lawyers represent you when those returns are challenged, audited, or prosecuted — and our communications are protected by solicitor–client privilege, which accountant communications generally are not.
What should I do if I receive a letter from the CRA?
First, identify what the letter is and what it requires. A CRA letter may open an audit, ask for documents, propose adjustments (a proposal letter), confirm a reassessment, or start collection action — and each carries its own deadline and its own implications. Note any date by which a response is required.
Do not ignore it, and be careful about responding off the cuff. What you say and produce can shape your later objection and appeal position, and casual admissions can be difficult to undo. If the letter proposes adjustments or penalties, or if significant amounts are involved, get advice before responding.
A free consultation can help you understand the letter, the deadline, and the right next step. Acting early — while options are still open — is usually far better than waiting until a deadline is near.
Will the CRA criminally prosecute me?
Most CRA disputes are civil. Criminal prosecution is reserved for serious tax evasion or fraud, usually involving deliberate misrepresentation. If you have unreported income, a voluntary disclosure is one of the standard ways to reduce criminal-prosecution risk.
Is the first consultation really free?
Yes. Most matters qualify for a free, no-obligation consultation with an experienced tax lawyer. The consultation is a chance to describe your situation, get a clear sense of the options and likely path, and receive a fee structure in writing before you commit to anything.
You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX) to arrange a confidential consultation. The head office is in Concord, Ontario (Vaughan), and the firm serves clients across Canada.
Are my communications with a tax lawyer confidential?
Yes. Communications between you and your lawyer for the purpose of obtaining legal advice are generally protected by solicitor-client privilege, one of the most strongly protected confidences in Canadian law. In practical terms, the CRA generally cannot compel disclosure of privileged communications.
This is an important difference from working with an accountant or other non-lawyer representative, whose communications and working papers can generally be demanded by the CRA. Where the facts are sensitive — unreported income, offshore assets, or potential penalties — that protection can be significant.
Privilege has limits and can be waived inadvertently, so it should be handled with care. A consultation can explain how privilege applies to your particular situation.
How fast can you start on my case?
We typically begin work within 24 hours of being retained. For audit deadlines, Notices of Objection, and other time-sensitive matters, we move immediately.
What if I have unfiled tax returns from many years ago?
We routinely handle 5+ years of unfiled returns. Through the Voluntary Disclosures Program — applied for before the CRA contacts you — we can usually eliminate gross-negligence penalties and limit interest exposure.