Realtor accountant in Sudbury

For a one-owner Sudbury realtor’s PREC, monthly bookkeeping, payroll and the year-end T2 with statements usually cost from $450 to $650 a month all-in. The year-end covers the T2 with Schedule 1 and Schedule 50, the CCA schedule, the small business deduction, T4 or T5 slips for the owner’s pay, and the instalments for the year ahead.

The hub for realtors, PRECs and brokers explains commission income in general. If you also hold rental property, see accounting for real estate investors.

The market a Sudbury agent works

Greater Sudbury is a single municipality covering a wide area: the urban core, communities such as Valley East, Chelmsford, Azilda, Lively, Copper Cliff, Garson, Falconbridge and Capreol, and a great deal of lake country. The city describes itself as a city of lakes, with 330 lakes inside its boundaries. An agent here may list a starter home in Hanmer one week and a waterfront camp the next, and buyers include people moving for work in mining, health care, education and government, the sectors that make the city a regional centre for Northeastern Ontario.

For the agent, that variety shows up in the tax return as uneven income, a lot of driving and marketing costs that differ by listing. None of it changes the rules, but all of it changes which records matter.

What changed for Ontario realtors in 2020

Before 2020, an Ontario salesperson or broker had to take commission personally, and every dollar was taxed at personal rates in the year it was earned, whether you spent it or not. Since then, a registrant can have the brokerage pay commission to a personal real estate corporation instead. The corporation pays tax at corporate rates, and you decide how and when money moves to you.

The rules are narrow. The corporation exists to carry on your real estate trading, the ownership and control conditions are set by the province, and the brokerage relationship stays in place. In practice a PREC is a vehicle for one agent’s commission, not a general holding company. Get the structure confirmed before the first commission is redirected, because a cheque paid to the wrong entity is awkward to undo.

Does a PREC make sense for you?

The benefit comes from leaving profit in the corporation. If you draw everything you earn to cover a mortgage and living costs, the deferral is small and the extra T2, bookkeeping and year-end statements can cost more than they save. If you earn well above what you spend, the gap stays in the company at a lower rate until you need it. The answer turns on how much you draw, not what you gross.

Run your real numbers through the incorporation calculator and the salary-versus-dividends calculator before you decide, then set the draw pattern at the start of each year. Money taken from the PREC without being declared as salary or dividends becomes a shareholder loan, and if it is not repaid within one year after the corporation’s year-end it is generally taxed as your income. The shareholder loans guide covers the trap.

HST on commissions

Real estate commission is a taxable supply, so a registered agent charges 13% HST on it. Registration is mandatory once taxable sales pass $30,000 in four consecutive calendar quarters, which most full-time agents cross early. If you incorporate, the PREC needs its own HST registration, separate from the one you held personally, and commission paid to the old number after the switch is a common first-year error.

Registration also lets you recover HST on photography, staging, advertising, signage and vehicle costs through input tax credits. Most agents with annual revenue of $1.5 million or less file once a year, which makes it easy to spend the HST sitting in the account. Moving each commission’s HST to a separate account the day it lands prevents a large spring bill. See GST/HST filing in Sudbury.

Vehicle and home-office claims

Showings across Greater Sudbury can mean long drives between the city, the outlying communities and lake properties on rural roads. The vehicle claim is based on the business share of kilometres, and a log is what proves that share. A log kept for the whole year, or for a representative period that matches the pattern, holds up; a percentage estimated at filing time does not. Use the mileage and vehicle log from the first week. Driving from home to the brokerage and back is generally personal, while trips to listings and showings are business.

A home office is claimable where it is your principal place of business, or is used regularly and exclusively to meet clients. A desk available at the brokerage weakens the claim but does not end it. Inside a PREC both claims work differently: the corporation reimburses you or owns the car, and a company-owned vehicle can create a taxable benefit.

Commission timing and instalments

Commission arrives on closing dates, not on a payroll calendar, and much of a year’s income can land in a few busy months. The gross deposit is also before splits, desk fees and marketing. Personal instalments are required when net tax owing exceeds $3,000 in the current year and either of the two previous years, and are due March 15, June 15, September 15 and December 15. The CRA’s reminder is based on history, so a rising year can leave you short even if you pay it exactly. Setting aside a fixed share of each commission is the discipline that keeps April calm. The tax instalment calculator shows the schedule.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• PREC T2 return and year-end financial statements
• Personal T1 coordinated with the corporate return
• HST registration and filings for you or your PREC
• Vehicle, home-office and marketing claims supported properly
• Instalments planned against real closing dates
• Salary and dividend mix reviewed each year

Fixed fees, fully online

EverStone is a CPA firm serving Sudbury realtors entirely online: video calls, a secure upload link and e-signature. For a Sudbury agent, a self-employed T1 with schedules is commonly $250–$450; a PREC with bookkeeping and a T2 is quoted after we review your enquiry. If you only need a decision made, a 45-minute Advice Call is a flat $200 + GST. See what it costs.

Remote accounting for realtors

EverStone is a fully virtual CPA firm, serving Sudbury agents entirely online. There is no Sudbury office and no local staff. Meetings are held by video, documents come in through a secure upload link and are signed by e-signature, and no visit is required at any point. Commission statements, the PREC decision and your expense records are handled together, because in practice they are one decision.