Can I transfer my Ontario rental property into my corporation?

You can transfer a rental or investment property into a corporation you control, but the transaction carries significant tax costs and registration requirements in Ontario.

For income tax purposes, CRA treats the transfer as a disposition at fair market value unless you elect a tax-deferred "rollover" under section 85 of the Income Tax Act, which allows you to transfer eligible property to a corporation at a value you choose within a permitted range. A properly structured section 85 rollover can defer the capital gain, but the rules are technical and require a tax professional to prepare the election.

Even with a tax deferral, Ontario land transfer tax is not deferred. LTT applies based on the fair market value of the property at the time of transfer, because a transfer to a corporation — even one you wholly own — is treated as a taxable transfer for LTT purposes. There is no corporate rollover exemption under the Ontario Land Transfer Tax Act.

Additionally, your mortgage lender's consent will typically be required, and most institutional lenders will need to approve the transfer or refinance the loan in the corporation's name. You should speak with a real estate lawyer and a tax accountant before proceeding.