Contributor: Pension lawyer Jean Pierre Laporte, BA, MA, LLB. (Jp.laporte@integris-mgt.com)

REALTORS® who use a Personal Real Estate Corporation (PREC) and take some of their compensation from that PREC in the form of T4 income are eligible to set up a Personal Pension Plan (PPP), so long as they’re under the age of 71. 

This pension plan comes with several tax deductions that don’t exist otherwise. 

Last  week, we looked at the use of prior year salaries to purchase past service.  This week we’re looking at the concept of the RRSP “double dip”, which is a personal tax deduction.  

Since pension contributions for the current year are based on the salary being paid out to the Realtor by the PREC in the current year, any extra contributions made to the Realtor’s RRSP is based on the previous year’s earned income. 

For example, if the PREC paid the Realtor a salary of say $80,000 in 2024 and 2025, the individual using a PPP might be able to contribute 18 per cent of 2024 income to their RRSP, and say 22 per cent of 2025 income to their PPP, all within the same year (2025). 

The PREC would get a corporate tax deduction for the $17,600 it contributed to the PPP, whereas the Realtor gets a $14,400 personal tax deduction thanks to the RRSP contribution. 

Follow us next week to understand why there’s no advantage to making an RRSP contribution (even if one is taxed at a very high rate of tax) as opposed to having the PREC make a similar contribution to a pension plan, even if the PREC’s corporate tax rate is a fraction of the personal marginal rate. 

• What’s a REALTOR® trying to save for retirement to do?
• Make your best retirement plan with GVR and INTEGRIS
• The Critical Path podcast – REALTOR® pension plan with INTEGRIS CEO JP Laporte