New Ontario legislation allows realtors to incorporate Personal Real Estate Corporations (PREC)
On March 4, 2020 Bill 145 of the Trust in Real Estate Services Act received royal assent. With the passage of Bill 145 of the Legislative Assembly of Ontario, Ontario real estate salespersons and brokers are now permitted to incorporate in Ontario.
Supporting regulations are not yet finalized. Future regulations will outline the conditions and restrictions under which this might take place. Once in force, these regulations will provide great opportunities for Ontario real estate salespersons and brokers to incorporate by setting up a Personal Real Estate Corporation (PREC).
The biggest advantage that real estate professionals can expect from incorporation in Ontario is a tax deferral opportunity. In Ontario, the corporate small business tax rate in 2020 is 12.2% (on the first $500,000). When you compare this rate to the 50%+ rate for earners in the top personal tax bracket, there is a deferral of tax.
If you would like our assistance in deciding whether you would benefit from incorporating your real estate practice, be sure to contact us!