2026 Guide: How to Structure a US SPV for Canadian Real Estate Acquisition
by Raises.com
This article is general information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.
A US special purpose vehicle (SPV) can make sense for a Canadian buying US real estate when the lender, the investors or the asset are in the United States. Tax is not the reason. Canada's capital gains inclusion rate is 50%. The 2024 proposal to raise it to two-thirds on gains above $250,000 was deferred and then cancelled on March 21, 2025, and Budget 2025 confirmed the cancellation. This guide covers when a Delaware SPV is the right vehicle, how the equity is raised through a private placement, and where cross-border tax advice is mandatory before anything is formed.
Correction, September 2026: an earlier version of this article described a "new 66% capital gains tax" in Canada. That was wrong. The proposal was an inclusion-rate change, not a tax rate, and it never took effect.
The Canadian tax position, stated correctly
- Inclusion rate: 50%. Half of a capital gain is included in taxable income, for individuals, corporations and trusts.
- The two-thirds proposal is dead. Budget 2024 proposed a 66.67% inclusion rate on the portion of an individual's annual gains above $250,000, and on all gains for corporations and most trusts. It was deferred to January 1, 2026 on January 31, 2025, cancelled by the Prime Minister on March 21, 2025, and Budget 2025 confirmed the government would not proceed.
- Moving the asset into a US entity does not remove Canadian tax. A Canadian resident is taxed on worldwide income. A US vehicle changes where the income is first taxed and what credits apply; it does not make the gain disappear.
When a US SPV is the right vehicle
| Situation | Vehicle | Why | Watch for |
|---|---|---|---|
| US property, US lender, US investors | Delaware LP or LLC, US sponsor entity | US lenders and accredited US investors expect a US borrower and a US-law offering | Canadian tax treatment of the entity (see below) |
| US property, Canadian investors only | Usually a limited partnership, not an LLC | Canada treats a US LLC as a corporation, so Canadian members can face double tax and lose foreign tax credits; an LP is generally fiscally transparent on both sides | US withholding on partnership income for non-US partners |
| Canadian property, Canadian investors | Canadian LP or corporation | No reason to add a US layer | Provincial securities exemptions (NI 45-106) |
The LLC point is the one that costs Canadians the most money. The Canada Revenue Agency treats a US LLC as a corporation for Canadian purposes while the US treats it as a partnership. The mismatch can produce tax in both countries on the same dollar. Most cross-border advisors put Canadian investors into a US limited partnership instead. Get that opinion in writing before the entity is formed.
How the equity gets raised
- Size the stack. On a $5 million property with a $4 million loan, the equity gap is $1 million plus closing costs and reserves. The sponsor's own contribution is typically 10 to 20 percent of that equity.
- Form the vehicle. A Delaware LP with a general partner entity, an EIN, and a US bank account.
- Prepare the offering materials. A private placement memorandum, subscription agreement and partnership agreement, sold to accredited investors under Regulation D. Raises.com coordinates the preparation of draft offering materials and works with qualified legal professionals for legal review and filings where required, including the Form D and any Canadian exempt-distribution reports where Canadian investors subscribe.
- Underwrite before marketing. Debt service coverage of 1.15 or better, senior debt sized to what the lender will actually approve, and a model that reconciles to the PPM's use of proceeds.
- Close under the SPV. The lender funds the SPV, the investors wire to the SPV's account, and title is held by the SPV.
Frequently asked questions
Is there a 66% capital gains tax in Canada?
No. The inclusion rate is 50%. The proposed increase to two-thirds was cancelled on March 21, 2025 and Budget 2025 confirmed it.
Does a US SPV lower a Canadian investor's tax?
Not by itself. Canadian residents are taxed on worldwide income. The vehicle decides where tax is paid first and whether foreign tax credits line up, which is exactly why an LLC is usually the wrong choice for Canadian investors and an LP is usually right.
What is a private placement?
A sale of securities to a limited group of investors under an exemption from public registration, in the US usually Regulation D Rule 506(b) or 506(c).
Do I need an EIN?
Yes. The SPV needs an Employer Identification Number for US tax reporting and to open a US bank account.
Can the same structure buy a business?
Yes. The SPV holds the equity and the acquisition debt of an operating business the same way it holds a property, with the same cross-border entity question.
Sources
- Prime Minister of Canada, March 21, 2025: cancellation of the proposed capital gains inclusion rate increase
- Department of Finance Canada, January 31, 2025: deferral of the inclusion rate change
- SEC: Rule 506(b) private placements
Next steps
Read how Raises.com structures the capital to buy a business or property, then book a strategy call.
General information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.