Tax Deductions for Real Estate Agents

Tax Deductions for Real Estate Agents

 realestate agents

Average weekly pay:            $1,150 
Employment size:                 88,900  
Future growth:                       Strong     
Skill level                                 Certificate III or IV  

Real estate agents assist property owners in marketing, selling, or leasing their properties. Generally, a real estate agent is paid a commission on the sale of their property. Tasks include:

  • Cataloguing, listing and adverting properties for sale and lease.
  • Conducting inspections, and advising buyers on the merits of properties and the terms of sale or lease.
  • Advising vendors of sales and marketing options.
  • Offering valuations and advice for structuring the terms of the settlement.
  • Collecting rent monies from tenants, remitting rent to owners, monitoring tenants, and addressing problems with tenants.

    Typical tax deductions include:

  • Motor vehicle expenses. Normally using the log book method maximises the deduction.
  • Work-related phone calls. Also, phone rental if you can show you were on call or you had to call your employer or clients regularly while you were away from your workplace.
  • Depreciation on computers, cameras, video recorders, and laptops. Each item that costs less than $300 can be expensed upfront.
  • Costs of jazzing up a property. Includes flowers, cleaning, paint, coffee, and cakes.
  • Referral commission and expenses.
  • Handbag, satchel or briefcase.
  • Travel expenses and conferences. 
  • Internet and home office expenses.
  • Corporate uniform.
  • Renewing a real estate certificate of registration.
  • Advertising including newspapers, letterbox drops, signage, bunting and internet.
  • Non-entertainment gifts bought for work purposes if you are a salesperson or property manager entitled to receive your income from commission or both commission and retainer. Deductible gifts include a Christmas hamper, a bottle of whisky, wine, gift vouchers, flowers, etc.
  • Newspapers containing property sections. If there is a sufficient connection between the duties carried out by you as a real estate employee and the content of the newspapers.
  • Self-education expenses.

    Non-deductible expenses:

  • The initial cost to obtain your real estate certificate of registration.
  • Advertising –  if you earn your income from a fixed salary and you are not entitled to earn commission.
  • Gifts if you earn a fixed income and you are not entitled to earn a commission.
  • Entertainment expenses because they are specifically disallowed under the tax law and they are also a private expense. For example, if you buy lunch for a client or business associate, the food and drink expense is ordinarily a private matter, rather than a working or business expense.
  • Expenses incurred in attending social functions e.g. Real Estate Institute monthly networking breakfasts.

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