Industries

Accounting for realtors and personal real estate corporations.

Tax, GST and year-end for realtors, whether you work personally or through a corporation.

What we look at

What we look at in a realtor's file.

PREC or personal

Whether a personal real estate corporation makes sense for your income, and the BCFSA rules it has to follow, such as you being the sole voting shareholder and director.

Commission income

Commissions, referral fees and brokerage splits reconciled to your T4A slips and brokerage statements, so nothing is missed or double-counted.

GST/HST

Registration once you pass the small supplier threshold, collecting GST on commissions, and claiming input tax credits on business costs.

Vehicle and marketing costs

Vehicle logs, marketing, staging, desk fees and assistant costs tracked so the deductions hold up.

Paying yourself from a PREC

Salary, dividends or a mix, planned around your cash needs, RRSP room and the corporation's tax position.

Uneven income

Commissions rarely arrive evenly. We plan instalments and set-asides so tax season isn't a surprise.

What we do for you

Your personal return and your PREC are prepared together, with commissions reconciled to your brokerage statements.

Personal T1 returns with commission income
PREC year-end and T2 return
GST/HST registration and returns
T4 and T5 slips for PREC owner pay
Bookkeeping, monthly or quarterly
Tax planning before your fiscal year-end

Guide

Taxes for realtors in BC: a practical guide.

Commission income is uneven and no tax is withheld, which is why realtors benefit most from planning early in the year rather than sorting things out in April.

How commission income is taxed

Most realtors are self-employed. Commissions are reported as business income, along with referral fees, and your brokerage issues a T4A slip. Because nothing is withheld, the CRA expects quarterly instalments once you regularly owe more than $3,000 at filing.

Expenses that hold up

Brokerage desk fees and splits
Marketing, staging, signage and photography
Vehicle costs, supported by a mileage log
Licensing, board fees and insurance
Phone, software and a home office used regularly for work

Keep a vehicle log

Vehicle expenses are one of the most commonly reviewed deductions for realtors. A simple log of business kilometres for the year is what supports the claim if the CRA asks.

GST on commissions

Once your taxable revenue passes $30,000 over four consecutive calendar quarters, you must register for GST, charge it on your commissions and file returns. Registering also lets you claim GST paid on business costs as input tax credits.

Personal real estate corporations

BC licensees can earn commissions through a personal real estate corporation (PREC). Under BCFSA rules, you must be the sole voting shareholder, director and president, the name must end with "Personal Real Estate Corporation", and the corporation can only provide real estate services.

A PREC helps when you can leave part of your income in the corporation, where it's taxed at the small business rate. If you need everything you earn to live on, the extra cost of a corporation may outweigh the benefit.

Before you set up a PREC

Estimate how much income you can leave in the corporation each year
Plan how you'll pay yourself: salary, dividends or a mix
Confirm your brokerage can pay commissions to the corporation
Budget for annual corporate filings and bookkeeping

Have a question about your situation?

Book a call

Working with us

In person in Vancouver, or by video from anywhere in BC.

Start with a short call

We learn what you need and give you a quote upfront.

Connect securely

You authorize us with the CRA and share documents through our secure client portal.

We do the work

Your file is prepared and reviewed by a CPA, with questions sent as they come up.

Review together

We walk you through the results by phone, video, at our office or wherever suits you.

Questions

Common questions.

Should I set up a personal real estate corporation?

It depends on how much of your commission income you can leave in the corporation. A PREC helps most when you don't need all of your earnings to live on. We run the numbers before you incorporate.

Do I have to charge GST on my commissions?

Generally yes, once your taxable revenue passes $30,000 over four calendar quarters. We can register you.

What records should I keep?

Your brokerage statements, receipts, a vehicle log and a record of any referral fees you pay.

Do I need to meet you in person?

No. Most clients meet by phone or video, and we're happy to come to you if you'd rather meet in person.

Do I need a separate bank account for my PREC?

Yes. Keep the corporation's money separate so commissions and expenses are easy to track.

Can I deduct my vehicle?

Yes, the business portion, supported by a log of kilometres driven for work.

How are fees set?

Fees depend on the size and complexity of your file. We give you a quote upfront after a short first call.

Talk to a CPA about your file.

Book a call