Federal government tax proposals for personal incorporation
The Canadian Real Estate Association (CREA) would like to applaud the government for amending its tax proposals for personal incorporation and listening to the views and concerns of CREA’s 125,000 REALTOR® members.
“We were pleased to take part in the consultations and appreciate the government took time to carefully consider the feedback we offered, said CREA President Andrew Peck.
REALTORS® can incorporate in seven provinces in Canada, and incorporation is important given spouses and other family members often work in business together.
CREA’s submission focused on concerns with income sprinkling and the definition and application of “reasonableness” tests.
In addition, we felt the passive investment income elements unfairly penalized most personal corporations. Those who form private corporations do not benefit from employee perks such as paid vacation, pension plans, employer contribution to CPP, EI benefits, but rather use retained earnings to fund all employer and employee needs, including in some cases, maternity leave.
“This was a true consultation, the government listened to diverse voices, took the time to meet with us to understand our members pre-occupations and ultimately came up with a solution that met the Minister’s goals and addressed some unintended consequences for our industry”, said Gary Simonsen, CREA’s CEO.