Realtor accountant in White Rock

For a realtor still earning personally, a self-employed T1 with schedules commonly runs $250–$450. A realtor’s PREC with monthly bookkeeping starts from $300 a month, with GST filing included, and the corporate return is quoted after a free consultation. Every fee is fixed in writing first.

Commissions are uneven, and the tax bill is not

A spring with three closings and a winter with none produce one tax bill, calculated on the whole year. Because the brokerage withholds nothing, the full amount lands at once unless it has been set aside. 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 first strong year is often followed by a reminder letter and interest on instalments that were never paid. We set a percentage of every commission aside in a separate account, sized to your actual rate, so the April balance and the instalments are already there. The instalment calculator shows what the CRA will expect.

The brokerage statement is the starting point for the year, not the bank account. Commission splits, desk fees, referral fees paid and received, and any amounts held back all appear there. We reconcile each statement to the deposits, so income is reported once, in the right year, and the fees the brokerage deducted are claimed rather than lost.

Working through a personal real estate corporation

British Columbia permits realtors to earn through a PREC. The brokerage pays the commission to the corporation, which pays tax at the small business rate on what it keeps. That only helps if some income stays in the company; commission paid straight out as salary or dividends is taxed at roughly the same total. A PREC also brings a T2, financial statements, a BC annual report and a separate bank account. For a realtor who spends most of what they earn, it can cost more than it saves. We model both paths on your real numbers before you incorporate. PRECs in British Columbia covers the rules.

Paying yourself from the PREC

Inside a PREC, you choose salary, dividends or a mix. Salary creates RRSP room and CPP contributions, and it runs through payroll with a T4. Dividends are simpler, with a T5 and no source deductions. Money taken out without either becomes a shareholder loan. If it is not repaid within one year after the corporation’s year-end, it is generally taxed as your income. The salary versus dividends calculator compares the two.

GST, and what the brokerage does not handle

Commission income is a taxable supply, so registration is mandatory once taxable sales pass $30,000 in four consecutive calendar quarters. Most full-time realtors cross that in their first year. Once registered, you charge GST on commissions and claim input tax credits on the GST paid on your car, marketing, phone and fees. Most realtors file annually, and some benefit from the quick method. The brokerage collects and remits on your behalf only where its arrangement says so; check before assuming. The quick method calculator compares the two methods.

The expenses realtors claim, and how they are supported

Showing homes from Crescent Beach to the hillside above Marine Drive puts real kilometres on a car. A vehicle claim needs a log of business trips, or a sample-period log that represents the year. Marketing, signs, staging, photography and board dues are deductible. Client meals and entertainment are only partly deductible, and gifts need a business purpose. A home office qualifies if it is where you mainly work or where you meet clients regularly. Brokerage desk fees do not stop a home office claim, but they do make the facts matter. Vehicle deductions covers the log.

Inside a PREC, the same costs move to the corporation. The car can be owned by the company or by you, with a per-kilometre allowance paid tax-free when it is reasonable. Home office costs can be reimbursed by the PREC under a documented arrangement. Home office costs in a corporation sets out how.

Your own properties, kept separate

Realtors buy property too. A rental condo, a home bought to renovate and resell, or a pre-sale assignment each has its own tax treatment. A property sold within a short holding period can be taxed as business income rather than as a capital gain. Keeping your own deals out of the PREC’s books, and documenting why each was bought, makes the treatment clear. Accounting for real estate investors explains the distinction.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• Personal return with T2125, or the PREC’s T2 and year-end statements
• Instalments planned against real commission timing
• GST registration and annual returns
• Vehicle, home office and marketing claims supported properly
• Salary and dividend mix recalculated each year
• CRA correspondence handled for you

Remote accounting for realtors from Abbotsford

EverStone works with White Rock and South Surrey realtors virtually, from a base in Abbotsford. There is no White Rock office and nobody on the ground there. Brokerage statements, receipts and mileage logs arrive through a secure upload link, questions go by email, and a video call is arranged when it helps.

If you have incorporated, or are about to, a few first-year decisions are cheaper to make early. They are the year-end date, the bank account, how you will be paid and how GST moves to the corporation. See what it costs, or put one question to a 45-minute Advice Call for a flat $200 + GST.