Ownership Structures In Real Estate

The common types of ownership structures in real estate are owned as an individual, in a corporation, in a partnership or in a joint venture. The type of structure generally depends on the purpose of the use.

Individual Ownership

  • Less complexity but income is taxed at personal tax rates which can be the highest rates.
  • Any losses incurred can be offset against any income.
  • There is no liability protection for the individual besides the insurance policy on the property.


  • More complexity but good structure for multiple owners.
  • Small business deduction allows for lower corporate tax rates on active business income. However, passive investment income is taxed at higher rates.
  • Losses can be carried back or used against future income in the company.
  • There is liability protection for the shareholders of the company.


  • Multiple owners are required for this structure.
  • The partnership can be general or limited in nature. The main difference is that in a limited partnership, the partner is only liable for the amount of initial investment; whereas in a general partnership, the partners are jointly responsible for all liabilities.
  • A T5013 tax information return is required to be filed annually and income is flowed out to the partner to be taxed individually or in their corporation.

Joint Venture

  • Common real estate structure where an agreement is in place that will detail the rights and obligations of each owner which can be an individual or a corporation.
  • The income, expenses, assets and liabilities are flowed out to the owners so there is no separate tax return required for this structure.
  • Risk that a joint venture can be considered a partnership by Canada Revenue Agency and there are GST issues to consider.

Have a question? Contact Grant Gilmour.

Your comments are always welcome!

Grant has been in the CA business since 1988, starting his own practice in 1994. His tax expertise encompasses tax planning, international tax issues, and Scientific Research and Development tax credits. He is a graduate of the CICA In-Depth Tax Course and in 2012, Grant received the CA Community Service Award and the Scout Leader Medal.

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