Accountant for Penticton realtors
A South Okanagan realtor might list a downtown condo, a family home on the Wiltse slopes, a lakefront cabin at Kaleden and an orchard near Oliver in the same month. The commissions are uneven, the driving is real, and the tax is due whether or not the spring was busy. EverStone is a BC CPA serving Penticton businesses remotely, handling realtor returns and personal real estate corporations at a fixed fee.
Quick answer: A Penticton realtor reports commission as business income on a T2125, or, after incorporating as a personal real estate corporation, through the PREC’s T2. GST registration is required once commissions pass $30,000 in four consecutive quarters. Vehicle, marketing and home office costs are deductible to the extent they are business use. Instalments usually apply once tax owing passes $3,000. EverStone handles the returns, the GST and the PREC remotely, at a fee fixed in writing.
Realtor tax returns as a sole proprietor, with the T2125 and the GST schedules, are commonly $250–$450. Monthly bookkeeping for a PREC starts from $300 a month, and the PREC’s T2 is quoted after a free consultation.
Commission income arrives unevenly; tax does not
The South Okanagan market has a rhythm. Listings and showings pick up in spring, recreational and lakefront property moves in the warm months, and winter is quieter. A realtor can earn most of a year in a few closings. The CRA expects quarterly instalments on March 15, June 15, September 15 and December 15 once net tax owing passes $3,000 in the current year and either of the two previous years. Setting aside a share of every commission cheque, in a separate account, is what keeps April from being a shock. The instalment calculator estimates the payments.
A personal real estate corporation in BC
BC permits realtors to earn commissions through a personal real estate corporation. The brokerage pays the PREC, and the PREC pays the realtor a salary, dividends or both. Income left in the company is taxed at BC’s 2% small business rate plus the federal rate, which defers personal tax until the money is taken out. That only helps if you can leave money in the company. A realtor who spends every dollar earned saves little and pays for a second return. PREC accounting in BC explains the structure, and should you incorporate? works through the decision.
Once the PREC is running, the pay decision comes back every year. Salary is deductible to the company, creates RRSP room and builds CPP, and it arrives on a T4. Dividends carry no CPP and arrive on a T5. A realtor planning to buy a home may want salary for a mortgage application; one close to retirement may prefer dividends. The salary versus dividends calculator compares the two for your numbers.
Your first year in a PREC
Setting up a PREC involves more than a corporate registration. The brokerage has to agree to pay the corporation, the regulator has to be notified, a business bank account opened, and GST registration moved to the new company. Commissions earned before the switch stay personal. The first T2 is due six months after the year-end you choose, and the owner’s pay should be decided before the first dividend, not after. The new corporation checklist lists each step.
GST on commissions
Real estate commissions are taxable supplies, so a realtor registers for GST once taxable revenue passes $30,000 in four consecutive calendar quarters. The brokerage usually collects GST on the commission and pays it out to you with the cheque. Remitting it is your job. GST paid on vehicle costs, advertising, staging and the desk fee comes back as input tax credits. Most realtors file annually, and an annual filer with a December year-end that is not a corporation files by June 15 but pays by April 30. GST filing covers the return.
The expenses realtors claim, and the ones they should not
A South Okanagan territory means a lot of driving. Vehicle costs are deductible in proportion to business kilometres, which requires a log. Marketing, signage, photography, staging, brokerage fees, licensing, board dues and a mobile phone are deductible. A home office is deductible if it is where you mainly work, or used regularly to meet clients, even with a brokerage desk. Client gifts and meals are limited. Clothing for showings generally is not deductible. The mileage log shows what the CRA expects to see.
Two habits make these claims hold up. First, keep business and personal spending on separate cards, so the year’s expenses can be read straight from one statement. Second, keep the reason for each meal, gift or trip with the receipt. A review two years later asks who the client was and which listing it related to, and a note written at the time answers both. Records are kept for six years.
When a realtor buys property of their own
Realtors see opportunities first, and many buy a rental, a recreational lot or a property to renovate and resell. The tax treatment depends on intention. A property bought to rent long-term is a capital asset. A property bought to fix and sell quickly is usually business income, fully taxed, with no principal residence exemption. The rules that limit what a PREC may do also affect whether a property can sit inside it, so the ownership needs thought before the purchase, not after. Accounting for real estate investors covers the rules.
What EverStone handles for you
One CPA, one fixed fee quoted up front, everything below covered:
- T1 with the T2125 for a sole-proprietor realtor
- PREC setup, bookkeeping and the corporate T2
- GST registration, returns and input tax credits
- Salary and dividend planning from the PREC, with T4 or T5 slips
- Instalment planning around an uneven year
Prepared and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working with small businesses and incorporated contractors across British Columbia. Updated . About the firm · Send an enquiry
What a realtor has to get right
| Item | Why it matters |
|---|---|
| Instalments | Due quarterly once tax owing passes $3,000 |
| GST | Registration once commissions pass $30,000 in four quarters |
| Vehicle log | Supports the business share of every vehicle cost |
| PREC | Defers tax only on income left in the company |
| Sales tax where you operate | 5% GST plus 7% BC PST: two registrations, two returns |
Source: Accounting for realtors. General information, not advice.
Other services for Penticton businesses: personal tax and corporate tax.
Penticton accounting for realtors and personal real estate corporations FAQ
Should I incorporate as a PREC?+
Why is my tax bill so much larger than I expected?+
Can I claim my vehicle?+
Do I charge GST on my Penticton commissions?+
Do you have a Penticton office?+
What does an accountant cost for a Penticton realtor?+
Do you work with realtors outside Penticton itself?+
Related services and local guides
Nearby cities, the rest of what we do for Penticton businesses, and the reference pages behind this one.
Selling real estate in Penticton?
One CPA for your commissions, GST, PREC and planning. Fixed fee, fully online. Send an enquiry.
Remote accounting for realtors from Abbotsford
EverStone is a one-CPA firm based in Abbotsford, serving Penticton realtors entirely online. There is no Penticton office and no local staff. Commission statements, receipts and mileage logs come in through a secure upload link, questions are answered by email, and returns are signed electronically. Book a free consultation to talk through a PREC or a first year in the business.
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One Chartered Professional Accountant, start to finish. Fixed fees, quoted in writing before any work begins, and no obligation from a first conversation.
