What is a Personal Real Estate Corporation (PREC)?

A PREC allows real estate agents in Ontario and other provinces to incorporate their business. Instead of earning commission personally and paying high marginal tax rates, commissions are paid to the PREC, which is taxed at the much lower small business corporate tax rate (12.2% in Ontario).

When should a real estate agent incorporate into a PREC?

Generally, it makes sense to incorporate when you are earning more commission than you need for personal living expenses. If you can leave $40,000 to $50,000 or more inside the corporation annually, the tax deferral benefits usually outweigh the costs of setting up and maintaining the PREC.

What expenses can I deduct through my PREC?

You can deduct reasonable business expenses including brokerage fees, TREB/OREA dues, marketing and staging costs, vehicle expenses (lease/depreciation, gas, insurance), home office expenses, client gifts, and meals and entertainment (subject to the 50% rule).

Real Estate Agents & Brokers

Stop Giving Your Commissions to the CRA.

We specialize in Personal Real Estate Corporations (PREC). We help high-performing agents defer taxes, optimize deductions, and build long-term wealth.

Discuss Your PREC Setup

The PREC Tax Advantage

Discover how much capital you could be keeping inside your corporation to reinvest in real estate, marketing, or your retirement.

PREC Tax Deferral Estimator

Compare Sole Proprietor vs. Professional Real Estate Corporation

Net Commission Income$250,000

Your net income after deductible business expenses.

Personal Cash Needed$100,000

How much you need to withdraw for personal living expenses.

Estimated Tax Deferred

$47,971

This is the extra capital left inside your PREC to invest in real estate, stocks, or grow your team.

Sole Proprietor Tax:$93,471

PREC Total Tax:$45,500

Capital Retained in PREC:$119,500

Discuss Your PREC Setup

This tool is for general information only and does not replace professional tax or accounting advice.

Why High-Producing Agents Need a PREC

As a real estate professional, your income can fluctuate wildly from year to year. In a strong market, closing multiple high-value properties can push you into the highest marginal tax bracket, effectively taxing your hard-earned commissions at over 53% in Ontario.

The introduction of the Personal Real Estate Corporation (PREC) fundamentally changed how realtors build wealth. By incorporating, you cap your corporate tax rate at just 12.2% on the first $500,000 of active business income.

Tax Deferral is Wealth Creation

The true power of a PREC lies in tax deferral. If you earn $300,000 in commissions but only need $100,000 for your personal living expenses, you can leave the remaining $200,000 inside the PREC. Instead of paying 50%+ personal tax on that money, the corporation pays 12.2%.

That leaves you with significantly more capital to invest in marketing to grow your team, or to invest in passive real estate holdings and dividend-paying portfolios.

Income Smoothing: Pay yourself a steady, predictable salary or dividend, avoiding massive tax spikes during boom years.
Retirement Planning: Use the retained earnings in your PREC to fund an Individual Pension Plan (IPP) or corporate investment portfolio.
Optimized Deductions: Maximize write-offs for vehicle expenses, marketing, staging, and client entertainment within a corporate structure.

Wealth Protection

Keep up to 40% more of your commissions by utilizing the small business deduction.

Comprehensive Accounting for Realtors

We handle the entire financial back-office so you can focus on closing deals and serving your clients.

PREC Setup & Structuring

We handle the complete incorporation process, ensuring your PREC meets all RECO (or provincial equivalent) regulatory requirements and is optimized for tax efficiency from day one.

Salary vs. Dividend Strategy

We calculate the exact optimal mix of salary and dividends to pay yourself, minimizing personal tax while ensuring you maximize RRSP contribution room and CPP benefits if desired.

HST & Bookkeeping

Realtors face unique HST filing requirements. We manage your cloud bookkeeping, reconcile your trust accounts, and ensure your HST is filed accurately to prevent CRA audits.

Why Choose Teixeira Accounting?

At Teixeira Accounting Firm Inc., we don't just record history; we write your financial future. Most accounting firms are reactive—they wait for you to bring them problems. We are proactive architects of your wealth and business growth.

Whether you're a scaling enterprise or a high-net-worth individual, we provide the strategic oversight, tax optimization, and bulletproof compliance you need to operate with absolute confidence.

The Teixeira Advantage

Proactive Tax Strategy

We don't just file your taxes; we actively look for ways to reduce your tax burden year-round.

Bulletproof Compliance

Our rigorous quality control ensures your filings are accurate, minimizing audit risk.

Dedicated Advisory

You get a dedicated partner who understands your business deeply, not just a once-a-year tax preparer.