GST for Real Estate Agents
A specialized manual for property professionals. Master the rules for commission splits, VPA recoveries, conjunctional deals, and logbook compliance.
In the high-stakes world of New Zealand real estate, managing your tax can be as complex as closing a multi-million dollar multi-offer. As an agent, your income stream is unique: you often deal with large commission chunks, shared conjunctional deals, and significant upfront marketing expenses (VPA).
As of 2026, Inland Revenue (IRD) has increased scrutiny on independent contractors—the status held by the vast majority of NZ agents. Getting your GST wrong doesn't just cost money; it triggers audits.
The Gross Commission Rule
Your agency agreement should always clarify whether commission is inclusive or exclusive of GST. In 2026, the standard practice remains quoting commission as "Plus GST (if any)" to protect your net earnings from being eroded by the tax.
The Agency Commission Flow
Marketing & VPA (Vendor Paid Advertising)
Marketing recoveries are a common source of confusion. If you pay for TradeMe listings, professional photography, or signage out of your own pocket and then bill the vendor:
- ✓ You claim: The GST on the original invoice from the photographer or TradeMe as an input.
- ✓ You charge: 15% GST when you bill the vendor for the recovery.
This is legally a "re-supply" of a taxable service. If you simply "pass through" the cost without adding GST, you are effectively paying the tax out of your own pocket.
Conjunctional Sales: The Sharing Rule
When you work with another agency to sell a property, the listing agency usually receives the full commission. They then pay the "conjunctional share" to the selling agency.
| Party | Action | GST Impact |
|---|---|---|
| Listing Agency | Receives full Commission + GST. | Accounts for 100% output tax. |
| Selling Agency | Issues invoice to Listing Agency for their share. | Accounts for output tax on their share. |
| Listing Agency | Claims input tax on the share paid out. | Offsets their total liability. |
The Real Estate Logbook (Audit Risk)
Real estate agents are "high-mileage" business users. Your car is your biggest tax deduction. However, without a compliant logbook, the IRD can disqualify 100% of your business-use claim.
- Keep a logbook for 90 consecutive days every three years.
- Record: Date, start/end odometer, and the specific property address or client meeting purpose for every trip.
Frequently Asked Questions
Yes. If you are a GST-registered agent and you recover marketing costs (VPA) from a vendor, this is treated as a taxable supply of services. You must charge 15% GST on the recovery amount.
Yes. Referral fees are a taxable supply of 'information or matchmaking' services. If you receive a referral fee from a mortgage broker or another agent, you must issue a tax invoice for the amount plus GST.
If the sale is cancelled but the vendor is still liable for marketing costs, you still charge GST on those recoveries. GST is triggered by the supply of the service, not the success of the sale.
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