14 Jun Professional Real Estate Corporation
INCORPORATE A PERSONAL REAL ESTATE CORPORATION (PREC)
What is a PREC?
With the passing of Bill 145 in Ontario, real estate professionals are now able to incorporate by setting up a “Personal Real Estate Corporation” or PREC. This means real estate agents will be able to reduce their tax bills through lower corporate tax rates and take advantage of an opportunity to income split with family members.
What are the tax advantages of incorporating a PREC?
The primary advantage of incorporating a PREC is that your earnings will be paid to a corporation and not to you personally for tax purposes. Using a small business deduction on that income, your corporate tax rate is about 12.2% of the first $500,000 that your company makes each year. While there are some strong benefits to incorporating, it is not right for everyone.
How do I know if it’s right for me?
It is prudent to obtain advice from an experienced financial professional to make the determination of whether setting up a PREC is the correct option for you, and your business. Contact us today to discuss if it’s right for you.