As self-employed individuals, real estate professionals in Toronto are constantly on the run, helping their clients through the difficult transition of selling and purchasing their property. Likewise, SDG Chartered Professional Accountant Toronto can assist in providing detailed accounting and taxation services for your real estate related activities. We understand that you have a variety of concerns related to your Toronto realtor business, including HST remittance for real estate transactions, vehicle use for real estate professionals, allowable advertising for realtors, and home use for business. Let SDG Chartered Professional Accountant leverage our professional experience to take care of the issues regarding your individualized accounting and taxation needs so that you can stay focused on servicing your real estate clientele.

A real estate agent in Toronto should be able to determine if he/she is self-employed or an employee because this will impact the way they report their income. Get in touch with us to discuss your facts to be able to correctly determine if you qualify as an employee or qualify as a self-employed individual. The CRA looks at the facts of the working relationship between the payer and the real estate professionals.

To discuss briefly there are certain indicators pointed as under to determine the same:

Indicators that the worker is self-employed

• The real estate agent is required to periodically pay a fixed amount to the real estate broker for administrative fees for services. The fee may be paid for the below services:
  • • reception service,
    • a desk in the office,
    • the use of office facilities and conference rooms,
    • the use of printers,
    • transaction processing,
    • in-house accounting and payroll services, etc.
• The real estate agent controls and establishes the rate of commission and are not subject to sales quotas (e.g., minimum listing requirements or dollar volume of sales).
• The real estate agent is required to pay expenses associated with their activities, including car insurance premiums and repairs, professional liability insurance premiums and real estate association membership fees.
• The real estate agent is free to hire staff and cover the cost of their own advertisement or contributes to the cost of advertising the listings.

Indicators that the worker is an employee

1. The real estate agent is not required to pay any fee or amount to cover administrative costs for services provided by the real estate broker.
2. The real estate broker retains a percentage of the agent’s sales to cover the administrative costs and only requires payment for these services when there is a sale.
3. The real estate broker requires the real estate agent to perform specific tasks, such as answering telephone calls during a specific period at the real estate broker’s office.
4. The real estate agent is subject to sales quotas (e.g., minimum listing requirements or dollar volume of sales).
5. The real estate agent must account to the real estate broker for their activities on a daily or weekly basis (e.g., report on objectives, holiday reports, and work schedules; all of which have been requested by the real estate broker).
6. The real estate broker covers the cost of advertising the listings.

There are also many other vital factors which need to be considered carefully and being an experienced CPA firm working with real estate professionals can make things easier for you.

GST/HST – The GST collected on the sales made needs to be remitted to the CRA on a timely basis. Discuss with us on what is an allowable input tax credit to offset HST collected on your earnings. We have experience reporting and remitting HST on behalf of our realtor clients. Working for a brokerage, they provide an earnings summary that provides a break down on HST collected on each transaction.

Receipts & Records – As a real estate agent who may be self-employed there are various expenses which can be claimed as a deduction. It is important to keep a track of all such expenses so that you will minimize income taxes. Get in touch with us now and we shall be able to assist you in your bookkeeping and accounting needs so that the financial control always remains in your hand.

Common Deductions for Realtors and Real Estate Agents–

Home Office – As most real estate agents who are self-employed, they will most likely work from home at some point during the year. We know how to optimize home office expenses for realtors to maximize their home-related write-offs.

Car Expenses – As the demand for the job is to be always on the move, the expenses incurred on the car can either be reported by the detailed or simplified method. SDG Accountant has years of experience being the best accounting firm in Toronto for real estate professionals. We know how to maximize automobile-related write-offs. Realtors are sales professionals who are always in transit and transportation makes up a big chunk of their expenditures.

Advertising – It is evident that realtors place a huge reliance on advertising to generate new leads and business prospects. When a realtor is not networking within their own bubble, they must find ways to have leads call or contact for queries and more information on properties, etc. Digital marketing plays a huge role in advertising in today’s day and age. Methods such as google ads, Facebook ads, Instagram ads, and other funnels are all allowable advertising expenses. Of course, the staples of advertising such as business cards, flyers, brochures, signs, stickers, calendars are also allowable advertising expenses.

Licenses & Professional Education – OREA provides tax receipts for their real estate related courses or professional development. We can ensure these are claimed accurately.