Ontario Real Estate Chart of Accounts for Xero (Realtors, Free)

A realtor’s books look simple from the outside: commissions in, marketing out. The Ontario tax reality is sharper, because the commission is a fully taxable 13% service even when the home it relates to is exempt, the car doing the showings is the biggest mixed-use asset in the practice, and the brokerage relationship generates a steady stream of creditable fees. This Xero chart of accounts is built for that shape.

Income: taxable service, exempt property

Commission income defaults to ON - HST on Sales. The property’s exemption never transfers to the agent’s service: selling an exempt resale home is still a taxable supply of services, so 13% HST rides on the commission, and a registered agent’s input tax credits flow from that taxable status. New agents crossing the small-supplier threshold mid-year should register promptly; commissions make the threshold arrive fast.

The car is a tax system on wheels

Two accounts keep vehicle money honest. Motor vehicle expenses takes actual running costs at 13% where HST is charged, with the note carrying both caveats: input tax credits on passenger vehicles are capped by the capital cost limit, and personal use must be apportioned out. Vehicle allowance claims codes Out of Scope, because a per-kilometre allowance is compensation for using a personal car, not a taxed supply. Mixing the two in one account is the most common realtor bookkeeping error, and it distorts both the HST return and the income tax picture.

Marketing, the realtor’s production line

• Listing and portal fees: MLS, board, and franchise-portal charges carry 13% with full credits.
• Photography, staging and floor plans: 13%, claimable, and worth an account of its own at the volume a busy agent runs.
• Signage and lockboxes: 13%, claimable.
• Brokerage desk fees: 13% with a full ITC; the account note calls them out because they are contractual, recurring, and material.

Around these sit the standard Ontario mechanics: exempt insurance carrying the province’s 8% RST as a cost, meals with clients at half-credit, bank fees exempt, licences and government charges out of scope.

Import and daily use

Xero’s Canadian edition seeds only the provincial rate pairs, so create the three custom 0% rates (Zero Rated, Exempt, Out of Scope) under the Tax menu, Tax settings, Tax rates before importing through Accounting, Chart of accounts, Import. Xero picks each line’s tax by contact first, item second, account third; these defaults are the floor under whatever supplier settings exist above them.

1. Keep every brokerage statement split: desk fees to their account, commission splits to income, at their correct treatments.
2. Log kilometres contemporaneously; the allowance account is only as good as the log behind it.
3. Route staging and photography invoices through their account per listing so cost-per-listing stays measurable.
4. Reconcile the vehicle accounts quarterly against the apportionment policy.

Referral fees between agents round out the income picture: a referral paid to or received from another registered practice is itself a taxable service, so it carries 13% like the commission it derives from, and it belongs in its own visible line rather than netted against the deal.

The paper of a real estate practice is a stream of small receipts earned on the road. Hubdoc captures them from a phone. ExpenseFlow reads each receipt and bill, applies the correct Ontario treatment (13% desk fees, out-of-scope allowances, half-credit client meals), and posts into Xero against these accounts, keeping the practice’s coding intact during the busy spring market. Dext adds supplier rules for recurring vendors like boards and portals.

The QuickBooks version is at Ontario real estate chart of accounts for QuickBooks; rate mechanics live in the Ontario Xero tax rates reference.