2026 Guide: How to Structure a US SPV for Canadian Real Estate Acquisition
by Raises.com
You can protect your Canadian investments from the new 66% capital gains tax by forming a US special purpose vehicle (SPV) in Delaware and raising equity through a private placement. This approach lets you tap lower US tax rates, access US lenders, and keep your investor base compliant while preserving more of your upside.
Key Lessons from the Video
- Assess the Canadian tax impact, Canada now taxes capital gains at an effective 66% rate on profits above roughly $250,000, dramatically reducing net returns.
- Form a Delaware entity, Create a limited partnership or LLC in Delaware, obtain an EIN, and use it as the legal owner of the acquisition to benefit from US tax rates in the 30s.
- Raise equity via private placement, Draft a private placement memorandum, subscription agreement, and operating agreement to sell equity to accredited investors while staying within securities regulations.
- Structure the financing stack, For a $5 million property, secure a $4 million loan and raise the remaining $500,000 equity through the SPV, matching the example discussed in the video.
- Market the deal responsibly, Use pitch decks, websites, and presentations to attract investors, but keep all communications compliant to avoid litigation.
Comparison of Capital Raising Options
| Option | Tax Rate on Gains | Entity Type | Investor Suitability | Compliance Complexity |
|---|---|---|---|---|
| Stay in Canada | 66% on gains above $250k | Canadian corporation or personal holdings | All Canadian investors | Standard Canadian securities rules |
| US Delaware SPV (LLC or LP) | Effective 30% range | Delaware LLC or limited partnership | Accredited US and Canadian investors | Private placement paperwork, EIN, CPA coordination |
| Foreign corporation outside US/Canada | Varies by jurisdiction | Offshore corporation | Experienced cross-border investors | High legal and tax advisory costs |
Applying the Strategy to Your Acquisition
First, calculate the total purchase price and the equity gap you need to fill. Next, incorporate a Delaware limited partnership, obtain an EIN, and draft a private placement memorandum that outlines the deal economics. Then, create a subscription agreement and operating agreement, prepare a pitch deck, and begin outreach to accredited investors. Finally, secure a US lender for the loan portion and close the acquisition under the SPV's name.
Frequently Asked Questions
What is a private placement?
A private placement is a fundraising method that sells securities to a limited group of accredited investors without a public offering.
How does a Delaware limited partnership protect Canadian investors?
The partnership limits liability to the amount each investor contributes and isolates the investment from personal assets.
What is the 66% capital gains tax in Canada?
Canada now taxes capital gains at an effective 66% rate on profits above roughly $250,000, significantly higher than previous rates.
Do I need an EIN to raise equity in the US?
Yes, an Employer Identification Number is required for tax reporting and to open bank accounts for the SPV.
Can I raise money for a business acquisition using a US SPV?
Yes, the same structure works for buying businesses, with the SPV holding the equity and debt components of the deal.
Next Steps
Ready to set up your Delaware SPV and start raising capital? Learn how it works and book a call with our team to get started today.