Realtor accountant in North Vancouver

For an agent in a PREC, the file covers the T2 with Schedule 50, the small business deduction, the T4 or T5 for the agent’s pay, the GST return with input tax credits, and the personal T1. Monthly bookkeeping for a PREC starts from $300 a month with GST filing included.

Commission income arrives in bursts

A North Shore agent can close several deals in a busy spring and very little over a wet winter. Commission also arrives gross of the brokerage split, desk fees and marketing costs, so the deposit is not the taxable figure. Tax, on the other hand, is calculated on the whole year.

The risk is the year after a strong one. Once net tax owing exceeds $3,000 in the current year and either of the two previous years, the CRA expects instalments on March 15, June 15, September 15 and December 15. A reminder based on last year’s record can overshoot a quiet year or undershoot a strong one. Planning instalments against the actual pipeline, and moving a share of every commission into a tax account as it lands, keeps April from being a surprise. The instalment calculator helps.

Working through a personal real estate corporation

BC permits realtors to earn commission through a personal real estate corporation. The brokerage pays the commission to the PREC, the PREC pays tax at the small business rate on what it keeps, and the agent draws a salary, dividends or both. Like any corporation, it saves tax only on income left inside. An agent who spends everything gains little and takes on a T2, statements, a BC annual report and a separate bank account.

For an established agent whose income comfortably exceeds their spending, the deferral can be worth it. The PREC accountant page covers the set-up, and the salary versus dividends calculator shows the pay side.

Driving the North Shore: vehicle, marketing and home office

Showings in Deep Cove in the morning and West Vancouver in the afternoon add up to a lot of kilometres, much of it uphill. The vehicle claim depends on the business-use percentage, and the only reliable support is a log kept through the year. A sample period can work if it is representative, but reconstructing a year from a calendar after the fact rarely survives a review. The mileage and vehicle log makes it routine.

Marketing is often the biggest discretionary cost. Listing photography, staging, signage and advertising tied to earning commission are ordinarily deductible. Client meals and entertainment are only partly deductible, under the meals and entertainment rule, and personal grooming and wardrobe generally are not deductible at all. A home office that is genuinely where the business is run can be claimed; one used now and then usually cannot. Keeping each receipt with the listing it relates to turns a reasonable claim into a provable one.

GST on commissions, and the PREC

Real estate commission is a taxable supply, so an agent with more than $30,000 of commission in four consecutive calendar quarters must register for GST. Registration also lets you recover the GST on marketing, vehicle costs and professional fees as input tax credits. When a PREC is set up, the corporation becomes the party earning the commission, so the GST registration and the brokerage’s payment details need to line up with it. Getting that wrong produces returns filed under the wrong number, which is tedious to unwind. See the input tax credits guide.

Buying and selling your own property

Agents on the North Shore sometimes buy property themselves: a unit to rent, a house to renovate and resell, or a home with a suite. The tax result depends on intention and history, not just the paperwork. A property bought to resell quickly is usually business income, fully taxable, rather than a capital gain. Federal rules now treat many short-held residential sales that way automatically. Rental income goes on a T776, and a later sale of the rental brings its own questions about recaptured CCA; see selling a rental property. Settling the intention in writing before the purchase is far easier than arguing it after the sale. See accounting for real estate investors.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• PREC set-up review and the pay mix each year
• Instalments planned against your actual pipeline
• Vehicle, marketing and home office claims with records behind them
• GST registration and returns on commission
• T2 and year-end statements for the PREC
• Your personal T1, including any rental property

Fixed fees, fully online

EverStone is an Abbotsford CPA firm serving North Shore agents by email, video and a secure upload link, on Pacific time. A self-employed T1 with schedules commonly runs $250 to $450. Bookkeeping for a PREC starts from $300 a month, and the T2 is quoted after a free consultation. See what it costs.

Remote accounting for realtors from Abbotsford

EverStone is a one-CPA firm based in Abbotsford, serving North Vancouver agents entirely online. There is no North Vancouver location and no local staff. Questions go by email, meetings are held by video, and receipts and statements come in through a secure upload link, so nothing has to wait for a free afternoon between showings.