Verified for 2026 Tax Year

Agents & Commissions GST

Real Estate Agents and booking services. Do you charge GST on the full price or just the commission?

When you act as an "Agent" for someone else (the "Principal"), you are not selling the goods yourself. You are selling your services to the Principal.

The Core Rule

✓ The Principal is the one selling the goods/service to the customer.
✓ You (the Agent) are selling a service (commission) to the Principal.

You only charge GST on your COMMISSION, not the full sale price.

The Agency GST Flow (Disclosed)

1. Vendor sells house for $1,000,000

2. Customer pays $1,000,000 (Vendor liable for GST if applicable)

3. Agent charges $40k + 15% GST to Vendor

*The Agent only returns GST on the commission they earn.

Real Estate Agents

This is the classic example of an agency relationship.

Step 1: Sale Price ($1,000,000)

The Vendor (Principal) is the seller. If they are registered (e.g. property developer), they return GST on this amount.

Step 2: Commission ($40,000 + GST)

The Agent invoices the Vendor. The Agent returns GST on the $40,000 fee for their marketing and sales services.

Step 3: Settlement Statement

The lawyer deducts the commission from the deposit, paying out the agent's fee directly.

Undisclosed Agency

This gets tricky. If you sell goods on behalf of someone else, but you do not disclose who the Principal is (you pretend to be the seller), then for GST purposes, you are deemed to be the seller.

You must return GST on the full sale price, and claim a GST credit for the amount you pay to the Principal.

Auctions & Marketplaces Trap

If you run an online marketplace, check if you are an "Agent" (facilitator) or a "Principal" (reseller). The difference is massive for your turnover threshold and GST liabilities.

Acting for a Non-Resident Principal

If you are an agent for an overseas principal (e.g., selling tickets for an overseas airline or sourcing clients for an overseas software firm), your commission is Zero-Rated (0%). This is because the service (marketing) is supplied to a non-resident who is outside New Zealand.

Frequently Asked Questions

Do real estate agents charge GST on the whole house price?

No. Real estate agents only charge GST on their commission fee, as they are providing a service to the vendor. The vendor is responsible for returning any GST on the sale price of the property.

What is an Undisclosed Agency?

If you sell goods on behalf of someone else, but you do not disclose who the Principal is (you pretend to be the seller), then for GST purposes, you are deemed to be the seller. You must return GST on the full sale price.

What is the GST rate for commissions from an overseas principal?

If you are an agent for an overseas principal (e.g., selling tickets for an overseas airline), your commission is Zero-Rated (0%). This is because the service (marketing) is supplied to a non-resident outside New Zealand.

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