Tax Guide for Real Estate Agents and Brokers in Quebec: Income Reporting, GST/QST Rules, and Deductible Business Expenses — CPA Firm Near You, Montreal

Introduction

Real estate agents and brokers in Quebec operate as self-employed entrepreneurs with complex income structures: commissions, referral fees, staging costs, advertising expenses, franchise fees, and office splits. Because agents handle high-value transactions and large deductible expenses, CRA and Revenu Québec monitor this industry closely. This guide explains how real estate agents must report income, apply GST/QST rules, claim allowable deductions, and how a CPA firm near you in Montreal can help ensure full compliance while minimizing tax exposure.

Legal and Regulatory Framework

Under the Income Tax Act and the Taxation Act of Quebec, real estate agents must report all business income, including commissions from residential and commercial transactions, referral fees, staging income, and bonuses from brokerages. Because real estate services are taxable, GST and QST registration is mandatory once the small-supplier threshold is exceeded. Deductible expenses include advertising, MLS and brokerage fees, vehicle expenses, cellphone and internet costs, staging materials, office rent, franchise fees, licensing fees, and professional development. CRA and Revenu Québec require detailed documentation including brokerage statements, commission disbursements, mileage logs, and receipts for all business-related expenses.

Key Court Decisions

Courts have ruled that real estate agents must maintain meticulous records, especially for vehicle use, staging costs, advertising, and client entertainment. Judges have denied deductions when agents failed to produce mileage logs, mixed personal and business travel, or claimed unreasonable home office expenses. Tribunal cases emphasize that commissions must be reported in the year they are earned, even if brokerage payouts occur later. Courts also stress that GST/QST collected on commissions must be remitted accurately to avoid penalties.

Why CRA and Revenu Québec Target Real Estate Agents

Real estate professionals are frequently audited because of:
• High income potential
• Large vehicle and advertising deductions
• Inconsistent record-keeping
• Complex commission payouts involving broker splits
• Improper GST/QST remittances
• Missing receipts for staging, photography, and marketing

Auditors compare brokerage statements with reported income, review vehicle logs, and scrutinize recurring deductions to ensure compliance.

Mackisen Strategy

At Mackisen CPA Montreal, we help agents and brokers build complete accounting systems tailored to real estate business models. We reconcile brokerage commission statements with income reporting, determine GST/QST obligations, and organize all receipts for advertising, vehicle costs, franchise fees, and staging. We optimize deductions for travel, marketing, software, photography, home office expenses, and professional dues. Our team prepares year-end filings, manages GST/QST remittance schedules, and ensures full compliance with CRA and Revenu Québec standards. If audited, we defend your deductions, rebuild mileage logs when possible, and negotiate to reduce reassessments.

Real Client Experience

A Montreal agent claimed significant vehicle expenses without a mileage log. CRA disallowed most deductions and launched a full audit. We reconstructed mileage based on client visits, listing records, and brokerage calendars, reducing the reassessment substantially. In another case, an agent failed to remit GST/QST on commercial commissions; we corrected filings, calculated interest, and implemented a compliance plan to prevent future issues.

Common Questions

Are real estate commissions taxable?

Yes. Commissions are taxable business income, subject to GST and QST once the threshold is exceeded.

What expenses can real estate agents deduct?

Vehicle expenses, staging materials, advertising, MLS fees, brokerage fees, software, insurance, home office costs, and professional dues.

Do agents need to register for GST/QST?

Yes, once annual taxable revenues exceed the small-supplier threshold.

Can I deduct client meals and entertainment?

Yes, but generally only 50 percent is deductible and only when there is a clear business purpose.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps real estate professionals stay compliant while optimizing deductions. Whether you are reporting your first year of commissions or running a high-volume brokerage, our expert team ensures precision, transparency, and protection from audit risk.