Our office is finally complete and we’re officially open as of last Thursday.
It isn’t particularly easy the past few months. Tax season, COVID-19 lock down, to office opening, we’re extremely fortunate to work with an amazing team that supports us through this process.
We won’t be regularly staffing our office until July though. Our team needs a bit of a transition period to get used to this new routine.
If you’re interested in getting an in-person meeting/consultation with us, we are more than happy to schedule that with you. 😊
Now, onto the topic that’s on everyone’s mind…
A few weeks ago, Prime Minister Justin Trudeau announced that he is expanding the criteria to qualify for the $40K Canada Emergency Business Account loan.
Application is OPEN Friday June 19 under the expanded criteria.
It is an interest free loan until 2022. If you repay by December 2022, $10K of which is waived.
To qualify, as a minimum, you need to have
- A business bank account registered on or before March 1, 2020
- A business number registered with CRA
- And one of the two criteria below:
- You have $20K payroll expenses in 2019 (T4); or
- The expanded criteria listed below
Under the expanded criteria, a business must have more than $40K of non-deferrable expenses.
Non-deferrable expenses include:
(1) wages and other employment expenses to independent contractors (arm’s length parties)
(2) Rent or lease payments for real estate used for business purposes;
(3) Rent or lease payments for capital equipment used for business purposes;
(4) insurance related costs;
(5) property taxes;
(6) telephone and utilities in the form of gas, oil, electricity, water and internet;
(7) Payments for regularly scheduled debt service;
(8) Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower.
Application will be open this Friday via your online business bank account. You have to apply through the major Chartered Banks that you regularly bank with.
From the first glance of these criteria, it looks like many real estate holding companies will qualify, provided that the amount of expenses mentioned above are over $40K in 2020.
The application process is a lot more cumbersome though. You will be asked to provide the documentation that supports the requirement that you have over $40K of expenses.
This means – if you have property tax bills for the year, mortgage documents, insurance policies, telephone and utilities bills, etc., then those are the expenses that you would need to provide.
My position is that you won’t know what we need until you submit the application and get a response back.
Be prepared to get your books up to date, receipts ready to provide documentation tomorrow!
For real estate agents…
If you’re realtors, some common expenses that you might consider including in the non-deferrable expenses calculation –
- Cell phone bills
- RECO license
- TREB/RAHB membership
- RECO Insurance
- Monthly fees paid to your brokerage
- Business use of automobile leases
- Financing for your automobile expenses
- Subcontractor fees paid to your assistants
You might still not be able to apply at this point, given that you don’t have a business bank accounts with regular bank. Justin Trudeau did make a commitment to provide a workaround to this short fall.
Be patient. Your help is coming.
Until next time, happy Canadian Real Estate Investing.
Cherry Chan, CPA, CA
Your Real Estate Accountant