BY David Oikle, President, OREA, Ontario Real Estate Association
One year ago today, REALTORS® finally won the right to form personal real estate corporations (PRECs) in the Province of Ontario - one of the biggest government relations successes in OREA’s history. Since they became legal, over 10,000 REALTORS® have formed PRECs. In fact, the regulations introduced under the Trust in Real Estate Services Act, 2019 (TRESA) were the gold standard when it comes to personal incorporation models in our province. This gold standard ensures incorporated REALTORS® not only benefit from a lower tax burden but also the ability to income split and operate additional businesses inside their corporations – privileges given to only a few other professions in Ontario. To help Members decide if a PREC is right for them, OREA has put together a package of resources. For an overview of how PRECs work, including how to take the first steps towards incorporating, our Guide to Personal Real Estate Corporations for Ontario REALTORS® describes the basics, including outlining the advantages and potential challenges associated with incorporation. We have also consulted with legal and tax experts to put together a series of Frequently Asked Questions addressing the most common issues surrounding PREC formation in Ontario, like:
Income splitting
Holding corporations; and,
How to manage pending transactions.
These resources can all be found on OREA’s PREC Website.
Additionally, one year ago regulations under TRESA were also introduced to permit real estate salespersons and brokers to use the term REALTOR® in their public-facing advertisements – the only Province in Canada to do so! This was a significant win that we worked closely with the Canadian Real Estate Association to achieve. Changing the legislation to permit PRECs did not happen overnight. It took years of advocacy and lobbying by OREA and REALTORS® from across the province to make it a reality. We’re proud of these accomplishments and we’re proud to fight for you every day at Queen’s Park. If you have any questions, please do not hesitate to reach out to a member of our OREA team at info@orea.com. Sincerely, David Oikle OREA President