Business owners · Real-estate holdcos
Real-estate holding companies
A real-estate holding company can be valuable and still short of cash. At death, the tax arrives on paper gains while the value stays in buildings and mortgages.
The planning issues
What usually matters for real-estate holdcos
Not every issue applies to every owner. These are the questions we most often help owners work through, with your accountant and lawyer leading on tax and legal design.
Tax at death on property value
The shares of a holding company are generally treated as sold at fair market value at death. Shares of a company whose assets are mainly rental properties generally do not qualify for the lifetime capital gains exemption, which requires the company’s assets to be used mainly in an active business. There can also be a second layer of tax without post-mortem planning by your accountant.
Check estate liquidityRental income is usually investment income
Rent earned by a holding company is generally taxed at investment-income rates, not the small business rate, unless the company employs more than five full-time employees in the business throughout the year. That affects how quickly cash builds inside the company.
Mortgages, guarantees and forced sales
Lenders may review loans after an owner’s death. If the estate must sell property to pay tax or debt, timing and price may not be in the family’s control.
Include debts in the checkCo-owners and the next generation
When siblings or partners co-own a holdco, a buy-sell or shareholder agreement decides who can buy whom out, and how it is funded.
Check buy-sell fundingWhere to start
Planning checks for this situation
Each check shows any estimated funding gap under assumptions you can see and change. Nothing you enter leaves your browser.
Planning check
Estate liquidity
What your estate would need to pay at death, minus the cash and coverage already available.
Open the checkPlanning check
Buy-sell funding
Your buyout obligation under a shareholder agreement versus how it would actually be funded.
Open the checkPlanning check
Passive income cost
What annual tax on investment income and the small business limit grind cost surplus held in your corporation.
Open the checkHow we help
What a review can do
Insurance is one of the options we compare across multiple companies. Insurance advice and applications for Ontario residents are handled by Jackson Armstrong, Financial Consultant, LLQP. When a gap is better closed another way, or an estimate shows none, we say so.
Sources reviewed November 7, 2026: CRA, Small business deduction (specified investment business); CRA, Definitions for capital gains (qualified small business corporation shares). General summary only; rules have exceptions.
- Build a property-by-property liquidity picture with you: likely tax, debts and what could be sold without pressure.
- Compare non-insurance options (refinancing capacity, staged sales, holding more liquid assets) with insurance options from several insurers.
- Work alongside your accountant and lawyer, who design any freeze, post-mortem plan or agreement.
Next step
Book a no-cost business-owner review
About 20 minutes. We look at what your corporation should keep accessible, what it should protect, and how the value you have built transfers. No recommendation until we understand the facts, and no obligation.