I won one

[speedfreeksteve]

Wow thanks for all the advice, it is appreciated. I have decided to, then changed my mind 3 times about getting a corporation.  A couple more clarifications will help finalize the decision.

Can I buy a corp for less than 400... a used one perhaps?

To switch the land back into my name, is it as simple as reposessing it with no fees involved? I don't want big expenses as this land is just a place to get away from the city once in a while.

If it is polluted why can a corp walk away from it but a person can't? If I walk away it ends up in tax sale again in 4 years.  I've made every reasonable effort to find out if it is polluted? No court would find me liable for another persons pollution.

I've recently a small business as a sole proprietorship (much cheaper than a corp). Is it possible to put the land in the business name? Then if I flip it, can I claim it as business profit?

You can buy a used corp off someone, but it's not likely to be any cheaper really. There still would be legal fees on top of that for transferring it to your name. Some people actually charge more for a corp that has some history... I guess so they can say "in operation since 1992" or something like that.

My corp with business name was about $450 I seem to recall a few years ago.

Forget about the repossessing advice. That's just fantasy to think you can do that without Revenue Canada being all over that one. If it was as simple as that people would just setup a corporation and do the same thing to get around paying land transfer tax. Or you could just launder money through the corp and filter it back that to yourself that way.

To your last question, you can put a property in a business name, one of my own properties is under my corporate name. As for registering a property under an unincorporated business, I'm thinking probably not.

If you're just intending to deal with one property, then don't bother with the corporation.

[Pfm1011]

"If it is polluted why can a corp walk away from it but a person can't? If I walk away it ends up in tax sale again in 4 years.  I've made every reasonable effort to find out if it is polluted? No court would find me liable for another persons pollution."


You must understand the principle of a corp. It is a person, you are just a shareholder . No different then if you bought Ontario hydro shares and they had a nuclear leak at pickering. CAVEAT.. you must not do anything illegal as a director. IE you cant bury a barrel of waste and claim corporate protection. 

As a corp , you walk away, they chase the corp which is insolvent so they cant get anything, It is essentially a dead person with no assets.   You have to die personally , with no assets to get the same protection,  I for one prefer to kill a corp , then to kill myself. The choice is yours however.

If as a person,  you walk away from the property , ALL COURTS will find you  liable for the full costs of the cleanup as the owner. They just wont find punitive damages against you but WILL  still hit you with the cleanup costs.  Any person that buys it can also come after you as the last owner you have the responsibility to clean it. You can then go after the original polluter , who is a dead corp so therefore you are left holding the bag. This land wont go to tax sale in four years if it is dirty as they will be chasing you and wont tax sell it. You cant walk away,,period ( This is all presuming it is dirty which you seem to feel it is not the case so this is now all hypothetical)

In addition to the pollution issue, dont forget the potential liability of someone getting injured. Vacant land insurance is not cheap and the corp ends the requirement  for insurance as no lawyer will bother suing the corp as there is no money for them to scoop and if one was so bored , the best he can get is the land which amazingly will be worth less then his bills so his client will still pay.

[Pfm1011]

"Forget about the repossessing advice. That's just fantasy to think you can do that without Revenue Canada being all over that one. If it was as simple as that people would just setup a corporation and do the same thing to get around paying land transfer tax. Or you could just launder money through the corp and filter it back that to yourself that way"

Revenue Canada could care less as you  have always been the beneficial owner. You can actually just buy  it for a dollar as a related party however you will hit a higher capital gain for yourself when you sell it personally but that will offset by your original investment or loan. Since the corp made no money, there is no tax owed so again they could care less how you transfer it. Actually they would prefer you flipped it back as the personal capital gains will be higher then the corps.

The scam is when you try to claim a loss to the company and offset profits from other ventures or try to write  off the corp shares as an investment loss ..then you are evading.

End of the day there is no loss to the government as you pay capital gains still from your original purchase to the final sale, They could care less if a corp was an owner in the middle. 

Revenue Canada only has one criteria when looking at anything..Did the Government lose tax money??, If the answer is no..they could care less what you do with anything.

Land transfer tax will be based on the value of the original loan which triggered the repossession, NOT MARKET VALUE, which at 1% of the value is a joke and not even worth considering when weighed against the benefits.




Sorry Worldjohn..This starts out as "Hey look I won one" and turns into a debate over taxlaws and director liablility over toxic waste dumps...Congrats and Enjoy the land

[Jayz]

I don't know how you guys could spend $400+ to incorporate, to DIY, go to Industry Canada's Corporations Canada site to incorporate a numbered corp for $200 and a named corp for $200 + $21 extra for name search report (NUANS).

Corporations Canada
http://www.ic.gc.ca/cgi-bin/sc_mrksv/corpdir/corpFiling/register.cgi?lang=e

NUANS Real-Time System
http://strategis.ic.gc.ca/cgi-bin/sc_mrksv/corpdir/corpFiling/nuans_rts.cgi?lang=e

[worldjohn]

Thanks, for $200 I'll probably go for it.  I'm somewhat dissappointed to find out that corporations have more rights than humans but I guess that's just the way it is. 

Still not sure about the difficulty and complexity and cost of transferring the land back into my name as opinions were so varied on that topic. But the repossession scenario does seem viable.

I've tried every reasonable avenue (MND, MNR, Neighbours) to find out if there is pollution on the land and so far nothing other than the one rumour posted here. I talked to the MOE and they said it would take a month to find out anything as I would have to go through the freedom of information act. 

I'm wondering, if the county, municipality or treasurer know something about pollution on the land, aren't they legally (or at least morally) obligated to tell you?

[Frank]

Still not sure about the difficulty and complexity and cost of transferring the land back into my name as opinions were so varied on that topic. But the repossession scenario does seem viable.

I've tried every reasonable avenue (MND, MNR, Neighbours) to find out if there is pollution on the land and so far nothing other than the one rumour posted here. I talked to the MOE and they said it would take a month to find out anything as I would have to go through the freedom of information act. 

I'm wondering, if the county, municipality or treasurer know something about pollution on the land, aren't they legally (or at least morally) obligated to tell you?

Legal and Land transfer taxes would be your main costs of repossession.

Not sure why you are concerned about pollution.  The 'rumor' that was mentioned previously had to do with possible groundwater contamination from a mine several kms away.  You did the searches and there were no liens for pollution, just for operating without a licence.  The MOE would have a file on the property if there was an EA done on it previously, and it might be worth doing the investigation under the FOI.  The municipality would only have suspicions about it, and wouldn't venture to say anything lest there be a future law-suit.  Without an EA you are dealing only with rumor.

If you are really in doubt you could do a full EA yourself (many dollars), and then really tie your hands if you find something.   If you ever want to sell it, you will probably be required to do an EA by the purchaser to prove that they are buying clean property - they would have the same concerns you are having.   

On-site pollutants might include:  by-products of the previous mining operation - did they use any chemicals in the marble extraction process;  oils or fuels that might have spilled from machinery or tanks;  pcb's from electrical equipment that was used; anything that might have been dumped or buried on the property:  or contaminants that have made their way to the property from other properties such as the mine previously mentioned.   On the other hand, there might be nothing at all.   

[Pfm1011]

The city planner or zoning officer should have no problem telling you if he knows of any problem.  If the city knows nothing or tells you nothing, probably nothing there. Make sure you document who you talk to at the city. Date , time and name.

I would expect that if the land has any problems , they would tell you in a minute as they have absolutely nothing to gain by hiding it and everything to lose by not disclosing.

The $200 corporation route may not be best as you may not get the fields correct but its your call.  Corps dont have more rights, they have the same rights.

Again if you only heard the rumour on here but the city is telling you they know nothing, Dont sweat it,

[Frank]

The city planner or zoning officer should have no problem telling you if he knows of any problem.  If the city knows nothing or tells you nothing, probably nothing there. Make sure you document who you talk to at the city. Date , time and name.

I can assure you from my many days as a Bureaucrat that even if we suspected a site might have contaminants on it, we would not utter a word of it unless we had proof positive by way of a detailed EA on the property.  Otherwise, we would be subject to potential law suit either by the current owner of the property, or by potential purchasers who relied on our professional integrity. 

That is another reason why most municipalities do not include such information about property condition, or liens on title in their ads - it is simply not a requirement, and by including it even on one property where we knew for certain, and not on the others it could mislead people to believe that the others were clean - kind of defacto insinuation.

The long and the short of it is....expect that you will not get that kind of information from the Municipality, unless it has proof positive.

[Dave2]

Steve:

I seriously investigated before I decided not to bid.

I talked to former owner before the sale.  No contarmination problems were mentioned with the site only with access, location and aggregate quality   The biggest issue maybe the liscencing costs to get it back into production which is not cheap.  My understanding as well is that two of the three other sales involved land that is adjacent to the site. 

My feeling was that you had to get all three properties to make a go of it and even then it was questionable.  That is why I decided not to bid.  Mentioning this because remember one advantage of tax sales is that if on further investigation you decide not to proceed you can always walk away from your deposit.  In this case from what little you have said I believe walk away costs are low.

In a similar situation in Trent Hills I got the one I wanted even though there were 20 bidders. I will keep it because it is the one tax sale listing with best value. In another one in the same tender group that I was less enthusiastic on I was the low bidder. 

This is not a normal tax sale in that it is a productive mine site.  Could be worth a lot or not at all. 
I just hope you prove me wrong and that I made a mistake by not bidding.

Be happy to buy you a couple of cold brewski's and compare notes if you are ever in this area east of Metro Toronto. 

good luck

Dave

[worldjohn]

Thanks again for all the info.  I am now quite sure there are no pollutants on this land. I've talked to neighbors and many others and pollution isnt an issue.  This property is surrounded by another persons property and he tried to dissuade me from buying it saying its just a big rocky hole in the ground, theres lots of black flies, deer flies and mosquitoes etc.  as well as saying there are issues about the right of way.  But the right of way is written into the old deed and looks solid and I'll make sure it's written into the new deed.  I got this for half the assessed value so even if I dont like what I see, I'm fairly sure I can sell it for a profit. The issue remaining is that its zoned mineral extraction, which I could try to change or just leave it and if I try to sell it, hope someone wants some marble.
Dave please PM me with any other info u have.

[speedfreeksteve]

If you google corporation registration and put in your city name you'll probably find one as easy as I did back when I did mine. I believe that I paid around $450 for a named corp. The cost is tax deductable against your corp tax as well!