How Investment Properties Are Taxed in Georgetown — Stop Losing Money to Taxes Today

How are investment properties taxed?

How are investment properties taxed? The blunt truth that every Georgetown landlord needs to hear now: rental income is taxable, capital gains are real, and one wrong move can cost you tens of thousands.

Quick promise

You will finish this post with a clear picture of how investment properties are taxed in Georgetown, ON, what costs you can deduct, how capital gains and depreciation work, and the local taxes and rules that matter. No fluff. Action steps at the end.

Why this matters if you own or plan to buy in Georgetown, Halton Hills

If you own a rental in Georgetown or plan to buy one, taxes change your cash flow, return on investment, and exit plan. Local rules—MPAC assessments, Town of Halton Hills property tax rates, and Ontario land transfer tax—matter as much as federal tax rules. Treat tax planning as part of your investment strategy, not an afterthought.

How rental income is taxed in Canada (and what that means for Georgetown)

• All rental income you receive is taxable. Report gross rents, then subtract allowable expenses. The net becomes part of your personal (or corporate) taxable income.
• Example: Rent $24,000/year — allowable expenses $9,000 — net taxable rental income = $15,000 added to your personal income.
• Report on your T776 (Statement of Real Estate Rentals) as part of your T1 return. Keep receipts and records for every expense.

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Deductible expenses you can claim (save on tax now)

Common deductible expenses for investment properties in Georgetown:

• Mortgage interest on loans for the rental property
• Property taxes (Town of Halton Hills municipal property tax)
• Insurance for the rental unit
• Utilities you pay (heat, water, electricity)
• Repairs and maintenance (not capital improvements)
• Property management fees and advertising
• Legal and accounting fees related to the rental
• Condo or strata fees if applicable

Notes:

• Capital improvements (like an addition or new roof) aren’t immediate deductions — they increase the property’s adjusted cost base and affect capital gains when you sell.
• Keep detailed invoices and bank records. The Canada Revenue Agency (CRA) requires proof.

Capital Cost Allowance (CCA) — depreciation and the catch

• CCA lets you deduct depreciation on a rental building. It reduces taxable income now.
• Claiming CCA lowers the building’s undepreciated capital cost (UCC).
• When you sell, previously claimed CCA can create a recapture. Recapture is added to income and taxed at your marginal rate.

Strategy note: If you plan to sell at a gain, consider not claiming CCA every year. Claim it only when you need the deduction. This avoids a surprise recapture later. Talk to your accountant before claiming.

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Selling the investment: capital gains, principal residence, and change of use

• Capital gains tax: When you sell a rental property at a profit, 50% of the capital gain is included in taxable income (the inclusion rate is 50% in Canada).
• Simple example: Buy $300,000, sell $400,000 → gain = $100,000 → taxable portion = $50,000.
• If the property was ever your principal residence, special rules apply. You may get partial principal residence exemption for years it was your home — but only if you meet CRA conditions.
• Change-of-use rules: Converting a principal residence to a rental or vice versa can trigger a deemed disposition at fair market value unless you or your accountant file the required elections to defer tax.

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GST/HST and short-term rentals in Georgetown

• Long-term residential rentals are generally exempt from GST/HST.
• Short-term rentals (furnished stays under 30 days) can be considered commercial accommodation and may be subject to HST. If you list on short-stay platforms, confirm HST obligations.

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Land Transfer Tax and municipal/property taxes to budget

• Land transfer tax (provincial) applies on purchase in Ontario. Be prepared for this one-time cost.
• There is no municipal land transfer tax in Halton Hills (unlike Toronto). Confirm current provincial rates and possible rebates for first-time buyers.
• Annual municipal property tax comes from the Town of Halton Hills and is based on MPAC assessed value. Budget for increasing assessments and tax rates.

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Non-resident and foreign buyer rules (if relevant)

• Ontario has enacted rules affecting non-resident buyers in the past. If you are a non-resident, additional taxes or surtaxes may apply. Rules change—verify before purchase.

Corporate ownership vs personal ownership — major financial trade-offs

• Holding rental properties in a corporation can offer tax deferral and liability separation, but it adds complexity and different tax rates on passive income in Canada.
• Personal ownership keeps simplicity and access to the capital gains exemption rules (principal residence issues), but may expose personal assets.
• Decision depends on scale, long-term plans, mortgage availability, and tax situation. Get a local tax advisor to run the numbers.

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Practical tax-saving moves for Georgetown investors (do these first)

1. Track every expense — receipts, invoices, bank statements.
2. Use deductible expenses aggressively (interest, property tax, repairs).
3. Delay claiming CCA if you plan to sell soon — avoid recapture.
4. Structure ownership based on your goals — personal vs corporation.
5. Check HST rules if doing short-term rentals or flipping houses.
6. Factor Ontario land transfer tax and closing costs into your buy/sell plan.
7. Hire a local CPA who knows Georgetown and Halton Hills rules.

Local contacts and why local expertise matters

Georgetown is unique. MPAC valuations, Town of Halton Hills tax policy, and the local market drive property values and tax implications. That’s why you want advice from someone who knows the town, the buyers, the lenders, and the tax pros who work here.

Tony Sousa is a Georgetown realtor who works with investors every week and connects clients with local tax accountants and mortgage specialists. For local market guidance and accurate referral to an accountant who knows Ontario rental tax rules, contact:

Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca

Step-by-step checklist before you buy or sell an investment property in Georgetown

• Run a cash-flow model that includes property tax, insurance, maintenance, vacancy, and expected net rental income.
• Talk to a mortgage broker about rates for investment properties in Ontario.
• Consult an accountant about CCA strategy, corporate vs personal ownership, and capital gains planning.
• Confirm MPAC assessment history and Town of Halton Hills tax rates.
• Estimate Land Transfer Tax and closing costs.
• If using short-term rental platforms, verify HST rules.

FAQ — Quick answers every Georgetown investor needs

Q: Do I pay tax on rental income in Georgetown?
A: Yes. All rental income is taxable. Report gross rent, subtract eligible expenses, and include the net on your T1 return.

Q: What expenses can I deduct against rental income?
A: Mortgage interest, property taxes, insurance, maintenance and repairs, management fees, utilities you pay, legal/accounting fees, and condo fees if applicable.

Q: Can I claim depreciation to reduce tax?
A: Yes. Canada uses CCA. It reduces taxable income now but may cause recapture when you sell. Use it strategically.

Q: How are profits taxed when I sell a rental property?
A: Capital gains: 50% of the gain is taxable income. Previously claimed CCA may be recaptured and taxed as income.

Q: Is HST due on rental income in Georgetown?
A: Long-term residential rentals are usually exempt. Short-term (less than 30-day stays) can be HST-applicable. Check if your rental setup counts as commercial accommodation.

Q: Do I pay land transfer tax when buying in Georgetown?
A: Yes, Ontario’s provincial land transfer tax applies. Halton Hills doesn’t have a municipal land transfer tax like Toronto.

Q: Should I hold property personally or in a corporation?
A: It depends on goals. Corporations offer tax planning options and liability separation but add complexity and different tax treatment for passive income. Talk to an accountant.

Q: What local tax items should I watch in Georgetown?
A: MPAC assessments, Town of Halton Hills property tax rates, and any regional rules affecting rentals. Also monitor provincial changes affecting non-resident buyers or HST rules.

Q: Where can I get local help?
A: For Georgetown market advice and referrals to local accountants and mortgage brokers, contact Tony Sousa at tony@sousasells.ca or 416-477-2620.

Final takeaways

Taxes change cash flow and long-term returns. In Georgetown: track expenses, understand CCA and recapture, plan for capital gains, and know local costs like MPAC-driven property taxes and Ontario land transfer tax. Plan early and get local help.

Want a tailored plan for a specific property in Georgetown? Email tony@sousasells.ca or call 416-477-2620. He’ll connect you to a tax pro and map a local strategy.

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