Accounting for Property Managers in BC
A property management company handles two kinds of money: its own fees, and rent, deposits and reserves that belong to owners and tenants. Keeping those apart, and proving it every month, is most of the accounting job.
EverStone CPA keeps operating and trust books, payroll and tax filings for property management firms in British Columbia, entirely online, with fees fixed before work begins.
Quick answer: Your income is the management fee, not the rent you collect. Owner rent, tenant deposits and repair funds sit in trust and are reported to owners, while the fee moves to your operating account when your agreement allows. Your management fees generally attract GST, and your licence rules decide how the trust side must be kept.
Management firms we look after
Some clients manage a few dozen suites for local landlords. Others run a team that handles residential buildings, small commercial plazas or strata corporations under contract.
What they share is a ledger for each owner, a stream of tenant payments, vendor invoices paid on owners’ behalf and a monthly statement every owner expects to be right.
- Residential rental management firms with a portfolio of single owners
- Strata management companies serving several strata corporations
- Commercial managers collecting base rent and operating cost recoveries
- Firms managing furnished or vacation units for absentee owners
- Owners who manage their own buildings and a few for others
- Managers whose trust records have fallen behind and need rebuilding
Should a property management business be incorporated?
Most established management firms already operate through a company, often because the licence, the trust account and the client contracts are easier to hold that way.
Licensing comes first
Managing rental property for others in BC generally needs a licence, and your regulator sets rules on how a brokerage is structured and who may hold trust money. Confirm those rules before you change structure.
Why a company tends to fit
Fee profit kept in the company is taxed at the BC small business rate, 11% combined, on up to $500,000 of active business income. The company also separates the business’s liabilities from your personal assets.
Associated companies
If you also own rental buildings through another company, the two may be associated and share one $500,000 limit. Rental income in a holding company is usually not active business income at all, which changes its tax rate.
See incorporation advice for the setup. If you own buildings as well as managing them, accounting for real estate investors covers the investment side.
Paying yourself from the management company
Management fees arrive steadily, so owner pay is easier to plan than in most industries. The usual choice is how much comes out as salary and how much as dividends.
Salary through payroll
Deductible to the company, builds RRSP room and CPP, and runs through the same payroll as your building staff. Reported on a T4.
Dividends at year-end
Paid from after-tax profit and reported on a T5, with no source deductions. Useful once the year’s fee income is known and the company has kept what it needs.
Never from trust
Owner pay must come only from the operating account, after fees have been properly transferred out of trust. Paying yourself from trust funds is a regulatory problem as well as an accounting one.
Model the mix with the salary vs dividends calculator or read salary vs dividends in 2026.
GST and PST for property managers
Sales tax has two layers here: the tax on your own fees, and the tax position of the owners whose rent you collect.
Your management fees
Management and leasing fees are generally taxable for GST at 5%. Once your taxable fees pass $30,000 in four consecutive calendar quarters, you must register, charge GST and file returns.
The owner’s rent
Rent you collect belongs to the owner, and its GST treatment is the owner’s matter. Long-term residential rent is generally exempt. Commercial rent is generally taxable, and the owner may need you to collect GST on it.
Recharges and PST
BC PST, at 7%, applies mainly to goods and a short list of services. When you buy supplies or appliances and recharge them to owners, we set a consistent treatment so the tax is neither missed nor charged twice.
Our GST filing service handles the returns. The BC PST guide explains when PST registration is needed.
Trust accounting and owner funds
The trust account is where most management firms get into trouble, and where a regulator looks first. Every dollar in it belongs to a named owner or tenant.
Separate ledgers
Each owner and each property has its own ledger inside trust. Rent received, repairs paid, fees taken and money sent to the owner are recorded against it, so its balance is never negative.
Three-way reconciliation
Each month, the trust bank balance, the trust control account and the total of all owner ledgers must agree. A gap means money is in the wrong place and needs tracing before the next month closes.
Security and pet deposits
Tenant deposits are held for the tenant, not the owner, until the tenancy ends. Interest may be owed on them under residential tenancy rules, so the deposit record needs start dates and amounts.
Fees out of trust
Your management fee moves to the operating account only as your agreement allows, with a record tying it to the owner statement. That transfer is the point your income is recognised.
Your regulator’s trust rules govern the details, including any required reports. We keep the records so that those reports are straightforward to prepare.
Building staff, caretakers and maintenance contractors
Management firms pay a mix of office staff, on-site people and outside trades. Each is paid and reported differently.
Resident managers and caretakers
A caretaker who works set duties on site is usually an employee, on payroll with source deductions, vacation pay and a T4. A suite provided as part of the job can be a taxable benefit.
Who employs them?
Some caretakers are employed by the management company, others by the owner or strata with the manager running payroll as agent. The employer of record decides whose payroll account and WorkSafeBC registration applies.
Trades and handypeople
Plumbers, electricians and cleaners who invoice for jobs are normally contractors. T5018 slips apply only to businesses whose main activity is construction, so most managers do not file them.
Our payroll services handle office and building staff, including vacation pay at 4%, rising to 6% after five years.
Bookkeeping around property management software
Most firms run tenant billing and owner statements in property management software, and the company’s own books in QuickBooks Online or Xero. Both must tell the same story.
Software as the trust record
Rent rolls, receipts, vendor payments and owner statements come from your management system. We reconcile it to the trust bank each month and keep the reconciliation on file.
Operating books kept apart
Fees earned, salaries, rent, software and vehicle costs live in the company’s accounting file. Trust receipts never flow through it as revenue.
Year-end owner packages
Owners need annual income and expense summaries for their rental returns. Clean ledgers make those packages quick to produce and reduce questions from owners’ accountants.
See monthly bookkeeping for the ongoing work. If the trust side is months behind, catch-up bookkeeping rebuilds it from bank and software records.
Non-resident owners, vehicles and other manager issues
- Rent collected for an owner who lives outside Canada can carry a duty to withhold non-resident tax and file an NR4
- Vehicles used for inspections and showings need a kilometre log to support the business share
- Tools, laptops and office equipment are claimed through capital cost allowance over several years
- Strata contingency reserves belong to the strata corporation and are never your revenue
- Leasing fees for placing a tenant are income when earned, even if taken from rent later
- Records for both operating and trust books should be kept for six years
The mileage and vehicle log helps with the car. For owners’ side of the file, see rental income tax returns.
Monthly close for a property management firm
Run this each month in this order. The trust steps come first, because owner statements depend on them.
- Post every rent receipt. Including e-transfers, pre-authorised debits and late payments, each against the right tenant.
- Post vendor bills to owner ledgers. Each repair or service charged to the property it was for.
- Run the three-way reconciliation. Bank, trust control account and the sum of owner ledgers must agree.
- Check the deposit register. Every security and pet deposit listed with tenant, unit and date received.
- Transfer fees. Move earned management fees from trust to operating, with a record for each owner.
- Send owner statements and payouts. Only after the reconciliation balances.
- Close the operating books. Reconcile operating bank and cards, post payroll and record GST on fees.
- Flag non-resident owners. Confirm withholding was handled on their rent for the month.
The month-end close page shows how we run the operating side.
Our services for management firms, with prices
Property managers pay our published fees, agreed in writing before work starts.
- Monthly bookkeeping for the operating company, GST and PST filing included: from $300 a month
- Trust reconciliations and owner ledger review: quoted by the number of owners and properties
- Payroll for office and building staff: quoted with the bookkeeping
- Corporate T2 and year-end statements: quoted after a free consultation
- A fractional controller for larger firms: from $1,500 a month
The full schedule is on our pricing page. A larger firm that needs month-end oversight can look at fractional controller services. Your T2 return is due six months after year-end.
Questions from property managers
Is the rent I collect my income?+
Do I charge GST on management fees?+
Can you fix trust records that do not balance?+
What do I do for owners living outside Canada?+
Do you work with firms outside the Fraser Valley?+
Clients include firms near Vancouver, Victoria, Kelowna and Nanaimo. Firms managing furnished units may also want our page for short-term rental hosts, and the brokers you work beside have their own page.
Written and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working remotely with businesses across British Columbia. Updated . You can read client reviews before you get in touch.
Related reading
Further reading for management firms.
Send an enquiry
Tell us how many doors or strata corporations you manage, which software you use and whether the trust account currently balances. A CPA replies by email within one business day with a written fee.