Can I buy land with my corporation and lease it to myself

[cmontminy]

I have a corporation (sole proprietorship) and I have some money in it that I would like to use to buy land.

In a few years I would like to lease that land to myself and build a personal house on it.



So can I lease land from my corporation?



Is it something that can be done?

Would you do it?

 

[Thomas Beyer]

Yes, you could do it, but it is unusual and has several disadvantges:



Usually that is called a taxable benefit if not done at arms' length, i.e. market rates.



Also, banks will not lend you money if house is owned personally and land in a corporation. Thus, decide who owns the land and then have that owner (you or corporation) build and get a mortgage.



Also, you pay taxes in a gain in a corporation, whereas if you own it personally you pay no capital gains taxes. As such, it is probably not too wise to keep the land+house in the corporation at the time of move-in.