A PREC Accountant for British Columbia Realtors

What changes on day one

Commission is now earned by the corporation rather than by you personally. That single change produces a short list of consequences that all arrive at once: a separate bank account, GST registered in the corporation’s name where you were registered personally (the CRA sets out when registration is required), bookkeeping to a corporate standard, and a corporate tax return with its own filing and payment deadlines. The CRA’s description of corporation types is the starting point for what your company now is in tax terms.

None of it is difficult. All of it is cheaper to set up correctly in the first quarter than to reconstruct in the fourth.

The decision that costs the most to get wrong

Salary or dividends, or some mix. They are close to a wash on total tax by design; what differs is everything else attached to them.

That last row decides it for more realtors than the tax arithmetic does. If a mortgage application is likely in the next two years, the compensation decision is a financing decision first. Our salary versus dividends calculator will show you the shape of it before you speak to anyone.

The deferral is the whole point, and it is conditional

Money left inside the corporation is taxed at the corporate rate rather than your marginal personal rate, and the gap is the entire benefit of incorporating. It applies only to what you leave in. A realtor who draws every dollar of commission has a corporation that costs a return, a filing calendar and a fee, and returns nothing for them.

This is worth being blunt about because it is the one question a new PREC owner is least likely to be asked. Work out what you actually need to draw in a year first. If the answer is “all of it”, the honest advice may be that the corporation is premature — and the arithmetic behind that is published rather than kept as a sales tool.

Your new deadlines

A corporate return, GST filings on their own cycle, and either T4s or T5s depending on how you paid yourself. Instalments follow once the corporation owes enough. The CRA’s corporation payments guidance covers when payment is due, which is not the same date as when the return is due — a distinction that costs new corporations interest every year. Our T2 deadline calculator will give you your own dates from your year end, and the deadline hub lists the rest.

What we do for PREC clients

The corporate return and year-end statements, GST filings, the payroll or dividend paperwork for however you decided to pay yourself, and the compensation review once a year before the year closes rather than after. Bookkeeping if you want it — many realtors do their own and simply want it checked, which is a smaller and cheaper engagement, and we will say so rather than selling the larger one.

Fixed fees, quoted in writing before the work starts and published. A PREC with clean records and no employees sits at the lower end of the published range.

More for realtors: accounting for realtors, real estate professionals, and if you also hold rental property. If your commission runs through a GST-registered corporation for the first time, the GST hub covers what changes.