What is a Personal Real Estate Corporation (PREC) in Ontario?

A PREC is a corporation set up by an Ontario real estate registrant to receive remuneration from a brokerage for their own transactions. It cannot trade in real estate itself.

Who can set up a PREC in Ontario?

Only registered real estate brokers or salespeople in Ontario can set up a PREC. They must own all equity shares, be the sole director and president, and receive remuneration for their own transactions.

Can family members be involved in a PREC?

Yes. Eligible family members (spouse, parent, or child) can hold non-voting, non-equity shares, but only the registrant can receive remuneration for real estate work.

What are the main advantages of a PREC?

PRECs provide flexibility for tax planning, including income deferral, income splitting through non-equity shares, and managing business expenses differently.

Can a PREC be advertised as a real estate brokerage?

No. A PREC cannot be advertised as a brokerage or as trading in real estate. It exists solely to receive payment for the registrant’s licensed services.

What Ontario Realtors Should Know About Personal Real Estate Corporations (PRECs)

Natalie Paquette
Feb 27
3 min read

Understanding PRECs — and Why They Matter

If you’re a real estate professional in Ontario, you’ve probably heard about Personal Real Estate Corporations, often called PRECs. These were introduced under updates to the Real Estate and Business Brokers Act (REBBA) through Ontario Regulation 536/20, giving Realtors, brokers, and salespeople the option to receive their income through a corporation rather than directly from their brokerage.

That means your commissions (now officially referred to as remuneration under the new rules) can be paid to your own corporation — if it meets the criteria.

Why PRECs Were Introduced

Before this change, Ontario real estate professionals couldn’t incorporate the way other licensed professionals (like doctors or lawyers) could. This update helps level the playing field, giving agents and brokers more control over how they manage their earnings, plan for taxes, and structure their finances.

Incorporate Your PREC

What an Ontario PREC Is (and Isn’t)

A PREC is a corporation set up by an individual real estate registrant (broker or salesperson) that’s allowed to receive payment from a brokerage for their real estate transactions.

But there’s an important distinction — a PREC is not a “professional corporation” under the Ontario Business Corporations Act. That means it doesn’t come with the same restrictions or naming requirements as those used by other professions like law or medicine.

In short:

A PREC can receive remuneration from your brokerage.
A PREC cannot trade in real estate itself.
The PREC exists only to receive payment for your own licensed services.

Key Rules You Need to Know

To qualify as a PREC:

You (the registrant) must own 100% of the equity shares.
You must be the sole director and president of the corporation.
Only you can receive remuneration for real estate transactions.
Family members (spouse, parent, or child) can hold non-voting, non-equity shares.
The PREC must be incorporated in Ontario (or continued in Ontario if it was federal or from another province).

Your brokerage isn’t required to pay through a PREC — it’s completely optional. So it’s worth checking whether your brokerage is willing to enter into a PREC agreement before you set one up.

The Financial Upside

The main advantage of a PREC is flexibility — especially for tax planning. A PREC can allow you to:

Defer some income for future years.
Split income through non-equity shares (with eligible family members).
Manage deductions and business expenses differently.

That said, tax advantages vary depending on your specific financial situation. Always consult an accountant and lawyer before making the decision.

Advertising & Branding Changes

Alongside PRECs, REBBA was also updated to expand the terms registrants can use in advertising. Salespersons and brokers can now use:

Real estate agent
Broker real estate agent
REALTOR (only if you’re a CREA member in good standing)

However, your PREC cannot be advertised as if it provides real estate services or trades in real estate. It’s not a brokerage and can’t be promoted as one.

Final Thoughts

A PREC isn’t the right choice for everyone — but for many Ontario Realtors, it can be a smart move to manage income and long-term business growth more effectively. If you’re thinking about incorporating, take the time to: