Personal Real Estate Corporations
A PREC can allow an Ontario registrant to earn commission through a corporation, but it also adds a corporate return, separate books and annual administration. The value depends largely on how much income can stay in the corporation.
HST on commissions
Commission income is generally taxable for HST purposes. Registration also allows input tax credits on eligible business costs, so the bookkeeping and HST filings should agree with the corporate reporting.
Expenses worth tracking properly
- Vehicle expenses supported by a mileage log
- Advertising, listing photography, staging and digital marketing
- Brokerage, desk, board and association fees
- Home-office costs where the requirements are met
- Client-facing costs, meals and entertainment where deductible
Bookkeeping through the year
Irregular commission income and continuous expenses make year-end reconstruction difficult. Current books make instalments and compensation decisions easier to plan before the year closes.