February 27th was a historic day for realtors in Ontario with the passing of Bill 145, Trust in Real Estate Services Act, 2020. Among many other aspects of the bill, it now allows realtors to incorporate and earn commissions and professional income through personal real estate corporations (PREC).
“It’s a game changer,” says Peter Cuttini, CPA, CA who works on a large real estate practice in Ontario at BDO.
“It’s an enormous opportunity for realtors to put more money back into their pockets,” said his partner, George E. Dube, CPA, CA, and member of BDO Canada’s National Real Estate Industry Team.
BDO spoke briefly about the tax possibilities in a Tax Alert: New Legislation could offer significant tax benefits for real estate professionals.
Bill 145 still has work to be done, including final proclamation, and supporting regulations, particularly on personal real estate corporations. However, we would encourage realtors to start talking to their accountants to see what impact Bill 145 and its potential tax benefits could have on their business. This creates an opportunity to relook at all of your business and bookkeeping, as well as tax planning, with your advisors.
September, 2020 Update: Should I incorporate my realtor business (PREC)?
George E. Dube, CPA, CA
Tax Partner, BDO Canada
Real estate accountant, real estate investor, speaker, author