Personal Real Estate Corporation (PREC) in BC: A Realtor’s Guide to Incorporating
As your real estate practice grows, it’s natural to start thinking more intentionally about how your business is structured. For many real estate agents in British Columbia, that leads to questions about incorporating a Personal Real Estate Corporation (PREC).
A PREC can be a useful tool for tax planning, income management, and creating a more formal business structure—but it’s also a regulated option with specific rules that realtors need to be aware of.
This post will walk you through the key things to understand about PRECs in BC, so you can decide whether incorporating as a real estate agent is the right next step for your business and what’s involved in doing it properly.
What Is a Personal Real Estate Corporation?
A Personal Real Estate Corporation is a corporation that is licensed to provide real estate services through a specific individual licensee (ie. the real estate agent who is incorporating). Instead of earning commissions personally, your PREC receives the income for the services you provide as a licensed real estate professional.
Because real estate is a regulated profession in British Columbia, PRECs are governed by the Real Estate Services Act and overseen by the BC Financial Services Authority. That means a PREC is not the same as a general service corporation and it comes with some additional requirements around ownership, control, and operations.
Who Can Incorporate a PREC in BC?
To incorporate and operate a PREC in British Columbia, you must be licensed to practice real estate in BC. In practical terms, this means:
You hold an active real estate licence in BC
You personally provide the real estate services through the corporation
You remain in control of the corporation
Your PREC is licensed at the same level and with the same brokerage as you
These requirements are designed to ensure that the corporation remains closely tied to the licensed professional providing the services.
Why Realtors Choose to Incorporate a PREC
Tax Planning and Flexibility
One of the most common reasons realtors consider a PREC is tax planning. A corporation can allow you to retain income at corporate tax rates and decide when and how to pay yourself, rather than being taxed personally on all income as it’s earned.
Whether this creates a meaningful benefit depends on how much income you’re retaining versus withdrawing, which is why this decision is usually made alongside advice from an accountant.
Managing Variable Income
Real estate income is rarely consistent month to month. A PREC can offer more flexibility in smoothing income, planning salary or dividends, and managing cash flow during slower periods.
Creating a More Formal Business Structure
For many professionals, incorporation is also about treating their real estate practice as a long-term business. A PREC can support clearer separation between personal and business finances and provide a structure that feels more aligned with growth and longevity.
What a PREC Can (and Cannot) Do
What a PREC Can Do
A PREC can:
Receive commissions for real estate services you provide
Pay you through salary, dividends, or a combination
Retain earnings for business or tax planning purposes
What a PREC Cannot Do
A PREC is limited to providing real estate services and closely related activities. It is not intended to operate as a general investment company or to carry on unrelated business activities.
Understanding these limits upfront helps avoid surprises later.
Ownership and Share Structure Basics
PRECs have more restrictive ownership rules than most corporations.
In general:
You, the licensed agent, must hold all voting shares and remain the controlling individual
You are typically the sole director and officer
Non-voting shares may be permitted in limited circumstances (for example, involving certain family members), but only if structured correctly
The share structure needs to satisfy regulatory requirements while also leaving room for sensible tax planning. This is an area where coordination between legal and accounting advice is important.
How the PREC Process Works
Incorporating and licensing a PREC is a multi-step process. It includes:
Incorporating a British Columbia company
Confirming a compliant corporate name and articles of incorporation
Applying to license the corporation as a PREC
Coordinating with your brokerage on commission payments
Ensuring your ongoing licensing and corporate filings stay aligned
The timing and sequencing matter, particularly around licensing and brokerage arrangements.
A Few Things to Think About Before Incorporating as a Real Estate Agent
Before moving ahead, it’s worth stepping back and considering:
Will you be retaining enough income in the corporation to justify incorporation?
Does a PREC align with your short- and long-term goals?
Are you comfortable with the additional administrative and compliance obligations?
A PREC can be a great tool—but only if it fits your specific situation.
Do You Need a Lawyer to Incorporate a PREC?
While incorporation itself is a filing process, PRECs sit at the intersection of corporate law and professional regulation.
Working with a lawyer helps ensure that:
Your corporation complies with real estate regulations
Your share structure is appropriate and flexible
The setup supports, rather than limits, future planning
This is especially important if you want to avoid having to restructure later.
Is a PREC the Right Step for You?
There’s no universal rule about when a realtor should incorporate a PREC. For some, it makes sense sooner; for others, it’s something to revisit later.
What matters is understanding the legal structure, the regulatory requirements, and how incorporation fits into your overall business and financial picture.
Next Steps for BC Realtors
If you’re a real estate professional in British Columbia and are thinking about a Personal Real Estate Corporation, the most helpful next step is a conversation focused on your business.
I work with BC realtors to assess whether a PREC makes sense, explain the process clearly, and handle the incorporation and licensing in a way that’s compliant and practical. I also have great network of accountants I work with if you need a referral.
If you’d like to talk through whether incorporating a PREC is the right move for you—or you’re ready to get the process started, I’d love for you to book a call to discuss your goals and next steps.
