Understanding the expense write-offs you have available to you as a real estate agent is imperative if you want to minimize the amount you owe in taxes.

‍

Ultimately, you want to achieve two objectives:

1) Minimize how much you owe in taxes and

2) Minimize your overall audit risk by keeping track of all your expense write-offs.

‍

It’s also important to consider that a portion of the GST/HST you collect is to be remitted back to the CRA, however, not all of it. GST/HST paid on expenses incurred to operate your business can be written off against the GST/HST you collect thereby reducing the overall amount you have to pay back to the CRA. Here are some useful tips to consider when you start preparing your year-end income and expense summary:

‍

Real Estate Tax Deductions & Write-Offs:

‍

As a real agent, there are a number of expenses that can be written off when it comes to everyday expenses for your business. Some of these expenses include:

‍

1.     Transportation / Car Expenses - Yes, if you travel locally such as driving to showings or meetings, etc., it is important to keep track of expenses such as gas, car rentals, airfare and hotel accommodations. For car expenses, it is important to keep gas and maintenance receipts or you can use the simplified method which is the rate per kilometer driven. More information can be found on the CRA website under vehicle expenses.

‍

2.     Office Supplies/ Equipment – Expenses related to stationary, pens, paper can be deductible as well. Big ticket items like laptops, printers, phones, can be added as assets and are to be depreciated over a set number of years.

‍

3.     Meals and Entertainment - As a real estate agent, all meals and entertainment expenses related to clients can be expensed, However, only 50% of the total can be written-off. As an audit requirement, it’s important to keep track of who each meeting and meal was with.

‍

4.     Business-use-work-from-home – Many real estate agents have an office in a commercial unit and at home. For the home office, they are to claim certain household expenses up to a prorated amount for the size of the office as compared to the whole home. These expenses can include utilities, mortgage interest, home insurance, property taxes, and maintenance/repair work.  

‍

5.    Commission Rebates – It’s fairly common for real estate agents to offer their clients rebates of commission after a transaction closes. The total value of the rebate is a deductible expenses.

‍

‍

To ensure that you reap the benefits of tax write-offs, the most important thing to keep in mind is to keep track of all your expenses, especially those listed above and you will be well prepared for the next tax season.

‍

‍

‍