LSTAR Applauds Reintroduction of Tax Fairness for REALTORS® Act
REALTORS® Should Contact their MPP In Support of Bill
LSTAR applauds the reintroduction of legislation that will bring fairness to the tax treatment of Ontario REALTORS®. Introduced by Prince Edward-Hastings MPP Todd Smith, the Tax Fairness for REALTORS® Act, 2015 will allow real estate salespeople to use personal corporations. The bill is being co-sponsored by Liberal MPP Mike Colle (Eglinton-Lawrence). LSTAR is urging its Members to visit www.orea.com/cfa to send an email to their MPP in support of the Tax Fairness bill.
The Real Estate and Business Brokers Act, 2002 (REBBA), prevents real estate salespeople from operating their business through a personal real estate corporation (PREC). However, other regulated professions in Ontario, including chartered accountants, lawyers, health professionals, social workers, mortgage brokers, insurance agents, architects and engineers, can all form personal corporations. Since 2008, British Columbia, Québec, Manitoba, Saskatchewan, Alberta and Nova Scotia have moved to allow real estate salespeople to incorporate.
PRECs will not cost the provincial treasury revenue and will produce a modest economic benefit. A recent study by the Centre for Spatial Economics (C4SE), found that PRECs would have a positive impact on provincial tax revenue and the economy. Specifically, C4SE's report found that PRECs would:
- Create between 33-89 net new jobs annually;
- Increase provincial tax revenue by an annual average of $0.8 million to $2 million; and,
- Contribute between $9 to $25 million annually to Ontario's GDP.
The ability to incorporate would allow REALTORS®, depending on their level of business income, to save money on their income tax by taking advantage of the lower corporate tax rate. Money saved on taxable income is typically reinvested in the corporation.
To send an email to your MPP in support of the Tax Fairness for REALTORS® Act visit www.orea.com/cfa. A sample letter is provided and fields are filled automatically once you give your name, home address and email address; it even knows who your MPP is! It literally takes five seconds and the system sends the letter for you. Nothing could be easier, so, please, do it.