What is a PREC? (Professional Real Estate Corporation)

New rules as of October, 2020

Since 2005 TRREB has been tirelessly advocating on behalf of Real Estate Sales Professionals and Brokers to the Government of Ontario for the ability, like Lawyers, Accountants and Engineers, to incorporate.

Bill 145 was passed in March 2020, with enabling legislation to become effective October, 2020.

What this means to a Real Estate Professaional…

Do you have income in excess of your requirements?

If so you can now incorporate, in Ontario, a Personal Real Estate Corporation (PREC).

What are the benefits?

Personal Real Estate Corporations (PREC) will make available to Sales Representatives and Brokers:

Corporate income tax rates

Tax deferral opportunities

The ability to invest excess income into income producing assets

Income splitting opportunities

Possible lifetime capital gains qualification

Possible limited liability

What is a Corporation?

A Corporation is a legal entity that has its own personality, distinct from its owners. It can enter into contracts, can be sued & is taxed at a lower rate than individuals. A PREC can only be incorporated by a registered Realtor who must pay the individual tax rate on monies they take out of their PREC.

Once incorporated, your Accountant can advise on strategies regarding salary vs dividends, CPP vs RSP’s, investment options and more…