Realtor accountant in Kelowna

For a one-owner Kelowna realtor’s PREC, monthly bookkeeping, payroll and the year-end T2 with statements usually cost from $500 to $700 a month all-in.

Commission income and the tax nobody withholds

A brokerage pays commission without deducting income tax, CPP or EI, so every closed deal carries unpaid tax. In the valley, spring and summer can bring most of a year’s commission and winter close to none. Spending spring’s commission as it arrives leads to a large balance owing on April 30 and an instalment notice the year after.

The fix is a separate account and a habit. A share of each commission cheque goes aside for income tax and GST the day it lands. Once net tax owing passes $3,000 in the current year and either of the two previous years, instalments are due March 15, June 15, September 15 and December 15. We size them to your actual year rather than the CRA’s estimate. An unincorporated realtor files by June 15 but still pays by April 30. The tax instalment calculator shows where you stand.

GST on commission

Real estate commission is a taxable supply for GST. Once your commissions pass $30,000 in four consecutive calendar quarters, registration is mandatory, and many realtors register from the start so they can recover the GST on their expenses. The brokerage then pays GST on top of your commission, and you remit it on your GST return, less input tax credits on your vehicle, marketing, desk fees and phone.

Small problems add up: GST collected but spent, credits claimed on personal costs, a return for the wrong period. An unincorporated realtor with a December 31 year-end files by June 15 and pays by April 30; a PREC files and pays three months after year-end. GST registration covers thresholds and periods.

The BC personal real estate corporation

BC licensees can earn commission through a personal real estate corporation. The PREC pays tax on active business income at the small-business rate, 11% combined per the BC tax facts page, until you draw salary or dividends. The benefit is deferring tax on money you do not need to live on, not a lower lifetime bill.

A PREC has costs: a separate bank account, bookkeeping, a yearly T2, a BC annual report, and no personal spending from the company account. For a realtor who spends everything, they can outweigh the deferral. Tax on split income rules narrow family dividends. The PREC must meet the regulator’s requirements before the brokerage can pay it, so plan incorporation, licensing and accounting together. The PREC accountant for BC realtors page covers the first year.

The vehicle and the home office

A realtor’s car is a working tool, driven to showings from the Lower Mission to Lake Country. The deduction is the business-use share, supported by a log kept for a representative period with odometer readings; without one, claims get cut. In a PREC, the company can own the car, which may create a taxable benefit, or pay you a reasonable per-kilometre allowance. The mileage and vehicle log sets out what to record.

A home office qualifies when it is where you mainly work, or used only for the business and regularly for meeting clients. You claim a share of utilities, insurance and maintenance; homeowners should usually skip capital cost allowance because of the principal residence exemption. In a PREC, the company reimburses it instead. Home office expenses for incorporated owners explains the method.

Marketing, gifts and the fees the brokerage charges

Listing photography, staging, signage, online ads and brokerage desk and franchise fees are ordinary expenses. Genuine closing gifts are deductible; client meals and entertainment are generally limited to 50%. Marketing is often a realtor’s largest line and the CRA’s first review, so we code each type separately.

What EverStone handles for you

One firm, one fixed fee agreed up front:

• Personal return with T2125, or the T2 and year-end statements for a PREC
• GST registration, returns and input tax credits
• Instalments sized to your actual commission year
• Vehicle and home-office claims supported by records
• Salary and dividend planning from a PREC
• Bookkeeping reconciled to the brokerage statements

Fixed fees, fully online

A self-employed return with schedules is commonly $275–$500 per year; a PREC is quoted after we review your enquiry. The fee is fixed and agreed before work starts. See what it costs.

Remote accounting for realtors

Kelowna realtors are served remotely. There is no Kelowna office and no local team. Meetings are virtual, documents are e-signed, and brokerage statements, receipts and the vehicle log arrive by secure upload link.