The BRRRR Strategy in Canada: Build a Portfolio Without Locking Up Your Capital

In brief — Yes. BRRRR means keeping and renting the property, so the 365-day anti-flipping rule does not apply, and the capital pulled out at refinance is a loan, not taxable income.

BRRRR — Buy, Rehab, Rent, Refinance, Repeat — lets you recycle your down payment instead of burying it in each property. In Canada, two realities shape the math.

The five steps

1. Buy below market value, usually because it needs work.
2. Rehab to raise both value and rent.
3. Rent at market.
4. Refinance at the new value to pull your capital back out.
5. Repeat with the recovered capital.

The key step in Canada: the 80% refinance cap

A conventional refinance in Canada is capped at 80% of market value. Your recoverable capital is:

Capital pulled out = (80% × new value) − current mortgage balance

Practitioners' rule of thumb: keep total project cost (purchase + rehab) at or below 75% of the after-repair value (ARV) to recover most of your cash after an 80% refinance. Above that, part of your capital stays trapped.

Tax treatment (and why BRRRR is efficient)

You keep and rent the property, so the 365-day anti-flipping rule does not apply, and the capital pulled out at refinance is a loan, not income — it is not taxable. Land transfer tax at purchase varies by province (Ontario LTT + Toronto MLTT, BC PTT, none in Alberta) — see your province's transfer-tax guide. Once rented, you can claim CCA, but mind the recapture at sale.

The number-one risk: ARV

Everything rests on the property actually appraising at your ARV. If the refinance appraisal comes in low, your recovered capital shrinks. Source ARV from real comparables, budget a 10–20% rehab cushion, and provision holding costs during the work.

Model it before you buy

DeedWorth models the full chain — capital pulled out at an 80% refinance, post-refinance cashflow, capital left in, and true project return — including provincial acquisition costs. Model a BRRRR project with DeedWorth →

FAQ

Is BRRRR legal and tax-efficient in Canada? Yes. BRRRR means keeping and renting the property, so the 365-day anti-flipping rule does not apply, and the capital pulled out at refinance is a loan, not taxable income.

How much can I refinance in Canada? A conventional refinance is capped at 80% of market value. The capital you pull out equals 80% of the new value minus your remaining mortgage balance.

What is ARV? After Repair Value: the estimated market value once renovations are done. It drives the whole refinance calculation, so securing it with reliable comparables is the most critical step.

How much capital should I aim to recover? A common target is to keep total project cost at or below 75% of ARV, which lets you recover most of your down payment after an 80% refinance.

Does refinancing a BRRRR trigger tax? No. Refinancing is borrowing: there is no disposition, so no capital gain or recapture at that point. Tax only arises if and when you actually sell.

Related guides

• Cap rate for Canadian rentals
• Deductible rental expenses in Canada
• CCA recapture on a rental property
• Buying a first plex in Quebec
• Building a plex: rent it out or sell it?
• Smith Manoeuvre and cash damming in Québec

For information only, not tax, legal or financial advice. Rules change; confirm with an accountant or mortgage professional. Last verified: June 2026.