Accountant for Victoria realtors

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

Agents who also buy investment property should read accounting for real estate investors. The Victoria accountant page covers the wider BC picture.

Should you set up a PREC?

BC allows licensed realtors to receive commission through a personal real estate corporation. The brokerage pays the corporation instead of you, and the corporation pays tax at small-business rates on what it keeps. The benefit is deferral: income you do not need to live on can stay in the company and be taxed personally later, when you take it out.

If you spend everything you earn, the saving is small and the costs are real: a corporate bank account, a T2 and financial statements each year, a BC annual report, and more care with every expense. A PREC tends to make sense once commissions consistently exceed your living costs by a comfortable margin. We run the numbers on your last two years before you incorporate. See incorporation decision.

Once the PREC exists, you still choose how to pay yourself. Salary creates RRSP room and CPP contributions and needs a payroll account; dividends are simpler but build no RRSP room. Many agents mix the two and adjust yearly. Keep corporate money separate, because personal spending paid by the PREC becomes a shareholder loan. The RRSP versus dividends guide explains the trade-off.

Commission income, splits and timing

Commission is earned when a deal completes, not when the offer is accepted, and a spring listing can easily close in the next tax year. Brokerages pay the net amount after splits, desk fees and franchise charges. Record the gross commission and each deduction separately; recording only the deposit understates income and loses expenses the CRA would have allowed.

Referral fees, bonuses and commission advances all count as income, and a T4A from the brokerage should agree with your records. If a slip is issued to you personally when the commission belongs to your PREC, ask for it to be corrected before you file.

GST on commissions

Commission from real estate services is taxable for GST. You must register once taxable revenue passes $30,000 in four consecutive calendar quarters, and most full-time agents pass that in their first year. The brokerage pays GST on top of the commission, and you remit it, less input tax credits on your own costs.

A PREC is a separate person for GST, so it needs its own registration; your personal number does not carry over. Some agents use the Quick Method, which can leave a little of the GST collected in your pocket. The Quick Method guide compares the two, and GST filing in Victoria covers the returns.

Car, home office and marketing

Most Victoria agents drive a great deal: showings in Saanich in the morning, a listing in Sooke after lunch. The vehicle claim depends on a log of business kilometres, so keep one from January. A mileage and vehicle log template helps. Where a PREC owns the car, taxable benefit rules apply to personal use.

A home office is deductible where it is your main place of work, or used regularly and only for meeting clients. Staging, photography, signage, online listings and client gifts are generally deductible, while meals and entertainment are limited. The advertising deductions guide and home office guide cover the details.

Instalments and an uneven year

Commission income is lumpy, but the tax on it follows set rules. Once your net tax owing is more than $3,000 in the current year and either of the two previous years, the CRA expects personal instalments on March 15, June 15, September 15 and December 15. As a self-employed agent your return is due June 15, but any balance owing is still due April 30.

Setting aside a fixed share of every commission in a separate account is the simplest defence against an April bill. The instalment calculator estimates the payments, and personal tax in Victoria covers the T1.

What EverStone handles for you

One firm, one fixed fee agreed up front:

• PREC decision modelled on your real commissions
• T2 and financial statements for your PREC
• T1 with business schedules if you are unincorporated
• GST registration and returns
• Vehicle, home office and marketing claims supported
• Instalments planned around closings

Fixed fees, fully online

A self-employed T1 with schedules commonly runs $275 to $500; PREC work is quoted after we review your enquiry and fixed in writing. See what it costs.

Remote accounting for realtors

EverStone is a CPA firm serving Victoria businesses online. There is no Victoria office and no local staff. We meet by video or phone; commission statements, mileage logs, receipts and signatures move by secure email, e-signature and upload link. No visit is required.