PILLAR 03 · EXPERT INSIGHTS Interview EP 118

How to Structure Your Canadian Real Estate Portfolio with Cherry Chan

with Cherry Chan , CPA and Founder , Real Estate Tax Tips

LISTEN ON ▶ YouTube

57 min · August 27, 2026 · 0 views

WHAT YOU'LL LEARN

The difference between personal and corporate tax rates on rental income.
How the 50% passive tax rate and 30% dividend refund system work in Ontario.
Strategies for income splitting with a spouse or your future self.
The actual costs of setting up and maintaining a corporation.
Why DIY online corporations can cause issues with mortgage financing.
The benefits of liability protection for real estate assets.
Why the 3-tier corporate structure is often unnecessary for standard investors.

Show Notes

Timestamps 9

Questions Answered 3

Mentioned In This Episode 3

Should you incorporate your real estate portfolio? It's one of the most common questions Canadian investors ask, but the answer isn't always a simple yes. In this episode, Dalia Barsoum sits down with CPA and Real Estate Tax Tips founder Cherry Chan to explore the financial and structural realities of moving rental properties into a corporation.

Cherry breaks down the complexities of the 50% passive tax rate, the 30% dividend refund system, and the true costs of maintaining a legal entity. Whether you are looking for liability protection or income splitting opportunities, this deep dive provides the unfiltered truth about when incorporating protects your wealth and when it might just drain your cash flow.

00:00:00 The most asked question in Canadian real estate → 00:01:38 Introducing CPA Cherry Chan → 00:03:30 Personal vs. Corporate tax rates on rental income → 00:11:28 The real benefits of a corporation → 00:18:12 The true costs of setting up and maintaining a legal entity → 00:20:49 Why DIY online corporations cause financing disasters → 00:25:25 How to determine if incorporating is right for your specific portfolio → 00:35:34 Segregating your strategies: Holding companies vs. Operating companies → 00:46:45 Debunking the 3-tier corporate structure →

How is rental income taxed in a corporation in Ontario?

In Ontario, rental income earned in a corporation is considered passive income and is taxed at a 50% rate, but 30% is refundable when a taxable dividend is issued to the shareholder.

Can incorporating provide liability protection for real estate investors?

A corporation is a separate legal entity that can act as a shield for your personal assets, such as your primary residence, if a tenant sues. However, you will typically still need to provide personal guarantees for mortgages.

What are the risks of setting up a DIY online corporation?

DIY online corporations may not meet the specific requirements of bankers, which can lead to financing disasters or the need to pay extra costs to fix the structure later.

How Property Sales Are Taxed in Canada guide
Streetwise Wealth Vault
Financing Roadmap