Consumer credit: do work on your rental property in 2018!
What is the link between the implementation of the withholding tax, the rental of unfurnished property and (very) major renovation work? A tax boon! In fact, the works – only of an amount greater than or equal to twice the amount of property income, increased by $ 21,400 – are fully deductible in 2018, and up to 50% the following year. And this in a context of low rates for the loan works.
Major work in 2018, not in 2019
If, for example, the owner of a rental property performs $ 40,000 of work in 2018, he can therefore deduct this amount in 2018, and $ 20,000 in 2019. In the end, he will have spent $ 40,000, but will receive $ 60,000 …
On the other hand, the works carried out in 2019 will be deducted from the 2019 land income up to 50% only. So, there is no point in planning work in 2019, you will understand. As for small works, which are entirely attributable to property income or to the total income of 2018, they are also not affected by the measure.
Insulation, heating, roofing: affordable work loans
2018 is therefore the year of major renovation works if you invest in an old property. And with works credit rates starting at 2.30% over 36 months according to the figures from Good lender in March 2018, you can start with your eyes closed: whether inside your home with a reinforcement insulation to reduce energy costs, a new electrical installation or a renewable heating system … Outside, you can finally restore the facade of your building whose apartments you are renting, renovate the damaged roof or still change the windows and doors. So many works whose amount can climb very high. With a work loan of $ 25,000 over 48 months, at a rate of 2.30%, your monthly repayments will amount to less than $ 550 according to a Good lender simulation.
With the introduction of the withholding tax, the tax return does not disappear. To obtain your deductions, you must therefore clearly mention the work carried out in 2018 on your declaration to be filed at the start of 2019.