Published by Graphite Business Advisers | Accounting & Tax Specialists for Real Estate Professionals
Most real estate agents are outstanding at closing deals. But when it comes to tax time, even the most experienced principals make costly mistakes — not because they’re careless, but because real estate tax has quirks that general accountants often miss.
After working with agencies across Victoria, New South Wales, and Queensland for over 30 years, we’ve seen the same errors come up again and again. Here are the most common ones, and what to do instead.
1. Treating All Commission Income the Same Way
Not all commission is created equal. Property management fees, sales commissions, referral income, and rebates from suppliers each carry different GST and income tax treatment. Many agents lump it all under “income” and call it done — and that’s where overpayments (or worse, ATO audit triggers) begin.
What to do: Work with an accountant who understands real estate agency structures and can correctly categorise each income stream. Over a financial year, this alone can make a meaningful difference to your tax position.
2. Missing Deductions That Are Unique to Real Estate
General accountants know about vehicle expenses and office supplies. But real estate professionals have a wider — and often overlooked — range of deductions available, including:
- Subscription fees for property data platforms (CoreLogic, REA, Domain)
- Licensing and continuing professional development (CPD) costs
- Home office expenses if you handle after-hours client communication
- Advertising and marketing spend — including social media, photography, and signboards
- Interest on borrowed funds used for business purposes
Many of these go unclaimed simply because agents don’t realise they qualify or don’t have the right records in place.
3. Getting the Principal/Contractor Split Wrong
It’s increasingly common for agencies to engage sales agents as contractors rather than employees. But the ATO has strict rules about this distinction — and getting it wrong can trigger back payments of superannuation, PAYG withholding obligations, and penalties.
This is especially relevant post the 2024/25 Superannuation Guarantee changes, where the rules around contractor super have tightened further.
If you’re not sure whether your agents should be classified as employees or contractors, this is worth reviewing now — before the ATO reviews it for you.
4. Not Using the Right Business Structure
Many agents set up as sole traders when they start out. That’s often fine in year one. But as income grows, the right structure — whether that’s a company, trust, or combination — can significantly reduce your tax liability and protect your personal assets.
For real estate business owners, structuring also intersects with property investment decisions. If you own investment properties personally while also running an agency, the interaction between those two can create unnecessary tax exposure.
5. Ignoring the GST Implications of Mixed-Use Properties
If your agency earns rental income from a commercial property it also partially uses — or manages properties with both residential and commercial tenancies — the GST treatment can become complicated quickly. Claiming incorrect GST credits on mixed-use properties is a consistent audit trigger.
Why This Matters More Than Ever in 2025/26
The ATO has increased its focus on the property and real estate sector. Data-matching programs now cross-reference agency income, rental declarations, and trust account records. An inconsistency that might have slipped through five years ago is far more likely to be flagged today.
What Graphite Business Advisers Does Differently
We’re not a general accounting firm that occasionally takes on real estate clients. Real estate is one of our core specialisations — from trust account audits and bookkeeping through to tax planning and business structuring for principals and investors.
Whether you run a boutique agency or a multi-office operation, we understand the compliance pressures you face, the income structures that are unique to your industry, and the tax strategies that actually work for real estate professionals.
If any of the mistakes above sound familiar, or if you’re simply not sure whether your current accountant understands real estate well enough — let’s talk.
📞 Call us on 1300 82 84 86 📧 info@gbadvisers.com.au 🌐 gbadvisers.com.au/contact
Graphite Business Advisers — Accounting, Tax, and Audit specialists for real estate professionals across Australia.
