WHAT IS A PERSONAL REAL ESTATE CORPORATION (PREC)?

A Personal Real Estate Corporation (PREC) is a specialized corporate structure that allows licensed real estate professionals in Canada to operate their business through a corporation while remaining fully compliant with provincial real estate regulations. Designed for individual real estate agents or brokers, a PREC enables the professional to be the sole shareholder, providing complete control over the business. This structure offers advantages such as improved income management, potential tax planning benefits, and enhanced credibility with clients by presenting a more established and professional image. Operating a PREC also ensures that all activities adhere to the ethical standards and rules set by the provincial regulatory body, giving clients confidence in the professionalism and integrity of the services provided. By incorporating as a PREC, real estate professionals can efficiently manage their practice, plan for long-term growth, and secure financial and operational flexibility while maintaining full regulatory compliance.

When a PREC Is The Right Choice

A PREC may be suitable for real estate professionals who:

  • Meet provincial eligibility requirements
  • Have approval from their brokerage
  • Want a formal corporate structure
  • Require compliant income management
  • Plan for long-term business organization

Rules for Personal Real Estate Corporations (PREC)

  • The corporation must be incorporated or continued under the Business Corporations Act.
  • All equity shares must be legally and beneficially owned by the controlling shareholder.
  • The sole director of the corporation must be the controlling shareholder.
  • The president and sole officer must be the controlling shareholder.
  • No agreement may restrict or transfer the powers of the sole director.
  • Non-equity shares must be owned by the controlling shareholder, their family member, or held in trust for minor children.

Advantages of a Personal Real Estate Corporation

  • Lower corporate tax rate of 12.20% plus personal tax only on amounts withdrawn.
  • Tax deferral opportunities allowing retained earnings to grow inside the corporation.
  • Potential income splitting with a spouse, subject to TOSI rules.
Register a PREC
Ontario Personal Real Estate Corporation

Easy 3 Step Process

01

Choose Your Province

Select the province where your PREC will be registered.

02

Complete Secure Online Payment

Clear pricing with no hidden fees. Every application is reviewed before filing.

03

Receive Your PREC Documents

Your PREC incorporation documents are delivered securely by email.

Frequently Asked Questions About Personal Real Estate Corporation (PREC)

What is a Personal Real Estate Corporation (PREC)?
A PREC is a professional corporation that allows eligible real estate professionals to receive commissions through a corporation rather than personally, subject to provincial approval.


Is a PREC allowed in all provinces?
No. PREC availability and rules vary by province. Ontario, Alberta, and British Columbia each have specific requirements.


Do I need approval from my brokerage to form a PREC?
Yes. Most provinces require written approval from the brokerage before commissions can be paid to a PREC.


Can commissions be paid directly to a PREC?
Yes, once all regulatory and brokerage approvals are in place, commissions may be paid to the PREC.


Is a PREC the same as a regular corporation?
No. A PREC is a specialized professional corporation with restrictions on ownership, activities, and income sources.


How long does it take to set up a PREC?
Most PREC registrations are completed within one business day, subject to provincial processing and approvals.