Property tax and real estate tax create confusion among people. If you also have this same question, nothing to worry! You are not alone.
Taking the initial step on the ladder of the real estate industry means a steep learning curve for the financial terms and how it affects you. But the common area of misunderstanding for people to enter into the real estate market is some terms, including property and real estate tax. These often used to interchange.
The question is – Are ‘real estate tax’ and ‘property tax’ the same? Well, let’s find out the answer.
Real Estate and property tax
In short, the answer is yes. In fact, Real Estate Tax is a type of property tax. A Canadian household has to pay three taxes – Property tax, Sales tax and Income tax. Though property taxes do apply to real estate, they can also include item other than real estate, for example, car and boat. It all depends on your jurisdictions’ laws. That said, the most common property tax is paid on real estate. Hence, the terms ‘real estate tax’ and ‘property tax’ can be used about the taxes paid for your real estate.
The Purpose of Property Taxes
Real estate tax may seem like a fair amount of money for people if they don’t know exactly where it is going. When you are paying real estate taxes, you contribute to your community. And that is because it is a source of income for your governmental bodies. In turn, it maintains and even increases the value of your property creating a valuable community.
Aware of Property Taxes
Once you understand property taxes – how they are calculated, the purpose and more – you can pay the right amount. And the best way to ensure it is to be educated on this subject of matter. It means you need to have updates and information about municipalities changing rates. If it looks like something daunting to you, tax professionals are there to help you. Their expertise on property and real estate tax will keep you from making any mistake about this sensitive issue. Be sure to work with the right tax expert.
Real estate tax professional to hire
The suggestion is to pay your real estate Tax within the due date annually to avoid any unpleasant action against you by the government. You can contact Bomcas Canada Accounting & Tax Services to help you in this regard. Visit the website at bomcas.ca for more information.
Real Estate Accounting Services: Here’re Top 5 Mistakes To Avoid!
If you are a real estate agent or investor, you must have many operational issues. Handling the documents of selling, buying, marketing and decision making are some of the important jobs that you can’t ignore. However, there are accounting issues in the industry that is quite complex. If you don’t want to make cracks in the account details, you must avoid these mistakes.
1. Not distinguishing between personal and business accounts
If you are in the real estate business, it’s important to separate personal accounts from business ones. It may not seem a problem unless the tax time arrives. If you don’t record them in their respective accountant, it may be difficult to remember the expenses. It’s best to hire a real estate accountant to avoid such situations.
2. Not tracking commissions properly
Many people record their commissions separately. But it may increase the chance of redundancy and human error. Such an error can make a huge loss in your business. So, don’t just rely on your knowledge of bookkeeping and hire the experts today. Only they can record all your details by effective bookkeeping.
3. Not Waiting to disburse funds
If you are someone who doesn’t wait till the deal gets finalized and disburse the funds, you are making a great mistake. The real estate industry fluctuates a lot. Even when a deal is fixed, you never know whether it will be successful or not. So, don’t make any disbursement unless everything gets settled.
4. Not following the proper tax filing process
Many tax filing processes are there. But you may not know the process that works best for your business. An incorrect filing can affect your real estate concerns negatively. Following exact tax rules and guidelines can save more. So, get the benefits by hiring only real estate accountant specialists.
5. Not using required accounts software
Client information and all kind of property details are crucial that you don’t want to lose, right! However, sometimes people lose data only because of the lack of proper software that could protect them. Even if you know to account, you not aware of all the technicalities of accounts. So, it’s better to hire experts.
Choose the renowned accounting company today!
If you don’t want to fall into the pit of all these mistakes, you must hire professionals now. Contact Bomcas Ltd. to get quality real estate accounting services. It is a recognized accounting firm that provides all kinds of accounting assistance by its experienced professionals. Please feel free to visit bomcas.ca for more info!