In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham addresses a listener's request to explore the advantages and disadvantages of purchasing investment properties through a corporation versus in one's personal name. Drawing from his experience as a mortgage expert at LendCity, Scott explains key benefits like keeping corporate mortgages off personal credit reports, allowing investors to qualify for more loans without impacting their personal debt ratios. He highlights how some residential lenders ignore corporate holdings entirely, enabling repeated "resets" for further acquisitions. Additionally, corporations provide enhanced liability protection, shielding personal assets from potential lawsuits related to the property. Scott also covers the drawbacks, including higher interest rates due to fewer lenders offering corporate mortgages post-COVID, as many shifted toward commercial products with added fees. He notes challenges with multiple directors, requiring all to co-sign, and emphasizes consulting accountants for tax implications, which can vary based on income levels. As an alternative, Scott discusses bare trust agreements, which allow closing personally before transferring to a corporation for tax purposes, though they offer no liability shield and may complicate future refinances. As of November 2025, bare trusts remain a viable option, but recent federal budget updates have exempted them from new T3 reporting requirements for the 2025 tax year, providing temporary relief from enhanced disclosure rules. This episode offers practical guidance for real estate investors in Canada, stressing the importance of personalized advice from professionals. Scott invites listeners to join LendCity's investor hub for upcoming webinars on this topic and encourages feedback for future episodes, blending mortgage insights with strategic tips to help build wealth through informed decisions. Key Takeaways Credit Bureau Benefits in Corporations : Corporate mortgages don't appear on personal credit reports, and some lenders exclude them from applications, allowing investors to "reset" and acquire more properties without debt ratio limits. Liability Protection Advantage : Holding properties in a corporation limits lawsuits to corporate assets only, protecting personal belongings; separate insurance can provide similar coverage personally but may not be as comprehensive. Higher Rates and Fewer Options : Corporate purchases often face elevated interest rates due to limited lender availability post-COVID, with many treating them as commercial loans that include fees. Director Requirements for Corps : All corporate directors must typically co-sign the mortgage, which can complicate setups involving family or non-active partners. Tax Considerations Vary : Corporate ownership might lower taxes for high earners, but personal could be cheaper for others—consult an accountant to determine the best fit. Bare Trust as a Hybrid Option : Allows personal closing with post-closing transfer to a corporation for tax benefits, avoiding land transfer taxes in some cases, but lacks liability protection and may cause lender issues during refinances; exempt from 2025 T3 filing requirements per recent federal updates. Seek Professional Advice : Always discuss with mortgage brokers, lawyers, and accountants before deciding, and join investor hubs for webinars and networking. Links to Show References Scott Dillingham's Contact: Phone - (519) 960-0370; Email -
[email protected] ; Website - lendcity.ca LendCity Investor Hub (for Webinars and Content): investorshub.lendcity.ca/feed (00:04) - Introduction to Buying in a Corp (02:20) - Pros of Buying in a Corp (02:55) - Cons of Buying in a Corp (06:00) - The Bear Trust Agreement (08:29) - Conclusion and Future Resources Here are the top three ways I can help you: Gain Access To Your Weekly Investor Insight Book A Strategy Call With An Expert On The Team Access Our Investor Resources Please follow and Rate us 5 stars because it helps us so much!
