Tool · Incorporation
Personal vs Corporation Comparison
In brief — The tool compares holding a rental personally vs in a corporation. On passive income, the corporate investment tax is largely refunded (RDTOH) when a dividend is paid: integration brings the total close to personal ownership.
Personal — after-tax
$14,007
Corporation (dividend) — after-tax
$12,388
Net difference corp vs personal: -$1,619. On passive income, integration makes both routes close — incorporation is mainly justified for asset protection and estate planning, rarely for tax alone.
Simplified model (top marginal rates, full distribution). Not tax advice.
A corporation pays a high investment tax on passive rental income, but part of it (RDTOH) is refunded when a dividend is paid to the shareholder.
After this integration and personal dividend tax, the net result is often close to personal ownership. Incorporation is mainly justified for asset protection, estate planning or tax deferral when reinvesting, rather than tax alone.
Full tax analysis (CCA, recapture, 10-year projection)
Analyze a property with DeedWorthFrequently asked questions
Is incorporating tax-advantageous?
Rarely on passive income: integration brings the total close to personal ownership. The advantage comes mostly from deferral when reinvesting, or from asset protection.
Passive or active income?
Rental income is generally passive, unless actively operated (several employees, services). Tax treatment differs.
Why incorporate then?
For asset protection, estate planning, tax deferral when reinvesting, or separating multiple properties — not primarily for tax on passive income.
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