A year after realtors in Ontario were permitted to create personal real estate corporations (PERCs), uptake has been significantly higher than expected, says their provincial trade association.
“When we met with government, we estimated 3,000-4,000 realtors would use this tool, and after a year of existence about 10,000 realtors have taken it up,” Tim Hudak, CEO of the Ontario Real Estate Association (OREA), said. “Oct. 1 marked the one-year anniversary for being able to form their own personal real estate corporations, a battle OREA had taken up on behalf of its realtor members for over 15 years.”
The formation of PRECs was approved last year in the Trust in Real Estate Services Act, which, Hudak says, will additionally enhance professional standards by arming the Real Estate Council of Ontario with stronger disciplinary powers.
Previously, seven Canadian provinces allowed realtors to incorporate, and while lawyers, accountants and engineers, among others, have long had permission in Ontario, realtors were prohibited. However, Hudak says bureaucracy is the reason realtors are late to the party, and now that they have arrived he expects innovation to flourish.
“It was pure red tape; one part of legislation was not talking to the other part of legislation,” he said. “Now, more money stays within the real restate profession instead of going to tax dollars, and that means improvements to adapting new tech, hiring new people, better analysis of real estate data, and higher quality of services to buyers and sellers.”
With PRECs, realtors can offer additional services and create new jobs in the community, spread income out over ups and downs in the business cycle, plan finances better, and pay the business tax, which is lower than the personal tax rate.