New study shows personal real estate corporations are good for Ontario’s economy
Allowing real estate professionals to form professional corporations has been a focal point of OREA’s advocacy efforts this year. Other regulated professions in the province may already form personal corporations, and since 2008, many provinces in Canada have moved to remove barriers to personal incorporation for real estate professionals. OREA believes giving our members the option to incorporate is a question of tax fairness. Due to high provincial deficits and current climate of cost cutting within the Government of Ontario, the province has been reluctant to act on OREA’s recommendation because allowing personal real estate corporations would involve a reduction in provincial revenue.
To counter this perception, OREA commissioned a report from the Centre for Spatial Economics which shows that PRECs will have a small but positive impact on Ontario’s economy. The study found that:
- PRECs more than pay for themselves in terms of direct tax revenue forgone by the province;
- PRECs will create between 33 to 89 net jobs per year;
- They will increase provincial revenue by $0.8 million and $2.0million annually; and,
- Will increase Ontario’s GDP by an average $9 million- $25 million annually.
OREA is using the results of the research to address the government’s key concern on our issue. While we don’t have a clear indication of whether or not the government plans on taking action it is a positive step forward for our issue.