Real Estate Professionals Say No to Personal Corporation Tax Law Changes
The federal government plans to impose corporation tax changes that would drastically affect how small businesses in Canada are taxed. They intend to shut down three primary corporate tax-planning strategies; which could impact the real estate market and would affect the way REALTORS® handle their business.
The laws would enforce prohibitions on income conversions to capital gains; which could cost REALTORS® valuable business and potentially influence retractions on the real estate market. For example, business owners who usually purchase investment properties as a means of income conversion would be prohibited to do so under the new corporate legislation. As a result, REALTORS® lose business and the market suffers in ripple effect.
In another instance, those REALTORS® and brokers who adopt passive income strategies would become more vulnerable to financial insecurity. This is because the new laws would limit them from reinvesting surplus income into the corporation as pension and benefits savings or as insurance against emergencies and economic downturns.
The new corporate tax rules would also place restrictions on income sprinkling. Business owners like incorporated REALTORS® or brokers would be more restricted from paying salary or wages to immediate family members such as spouses and adult children.
Given the potential impact of these changes on the real estate market and business success the Nova Scotia Association of REALTORS® (NSAR) is petitioning the federal government to put a hold on tabling these law changes. We support independent business owners and small business associations in their demand for more meaningful consultation where the impact of any corporate tax changes on small businesses and industries can be better evaluated, so that the well-being and interests of small business owners can be preserved.
If you are want to protect the market and your business sign the petition and join the movement to say no to new personal corporation tax laws.