Being a real estate agent is exciting but demanding. While you focus on closing deals and managing clients, it’s easy to overlook back-end tasks such as accounting and tax compliance. Falling behind can lead to ATO penalties or missed deductions. Here, we break down what every real estate agent needs to know about tax, accounting, and staying compliant with the Australian tax system.
Understand Your Tax Obligations as a Real Estate Agent
As a real estate agent, you can operate as a sole trader, a company, or a trust.
Irrespective of the entity you choose operate under, you must:
- Lodge an annual tax return
- Quarterly GST returns, if revenue is greater than $75,000 annually
- Deduct correct PAYG withholding from the employee’s salary and report to the ATO
- Pay PAYG instalments on income if required by the ATO
Tip: Record all income and expenses streams, including minor earnings such as auctioneer fees and private consultation payments.
Claimable Deductions: What You Can and Can’t Claim
Real estate agents enjoy significant tax advantages, including the ability to claim many deductions. The trick is understanding exactly what the ATO allows—and what it doesn’t.
What You Can Claim:
- Car expenses for travel between properties or client meetings (logbook method or cents per km)
- Mobile phone and internet expenses used for work
- Work-related training and seminars
- Marketing costs such as signage, online ads, and brochures
- Tools of the trade, like tablets, printers, or office supplies
- Professional memberships and licences
- Home office expenses if you work from home (based on actual use or fixed rate)
- Office rent
- Anything else not covered above, if it relates directly or indirectly to your business, check with your accountant
What You Can’t Claim:
- Personal grooming (even if you need to look presentable for clients)
- Clothing, unless it’s a uniform with a company logo
- Travel from home to your regular office (this is considered private)
- Any other expense of a personal nature, if it is not connected with your business.
Always keep tax invoices and receipts for five years in case of an audit.
Tip: Keep track of all income and expenses with accounting software to save time and streamline your business.
Stay Compliant with BAS, GST, and Super
If you earn more than $75,000 per year, the ATO requires you to register for Goods and Services Tax (GST) and regularly lodge Business Activity Statements (BAS)
GST Responsibilities:
- Charge 10% GST on your services
- Lodge BAS on time to report GST collected and paid
- Pay net GST owed to the ATO
Superannuation:
As an employer, it’s your responsibility to make Super Guarantee (SG) payments for your employees—and in many cases, contractors too. Don’t forget to pay super on your own salary,
Tip: Missing BAS or GST deadlines can result in penalties. Set calendar reminders and seek help from reliable real estate accountants at Taxgain.
Choose the Right Business Structure
The right business structure upfront helps optimise taxes, profits, and succession—so seek guidance from an experienced accountant.
Here are the most common options:
Sole Trader:
- Easy to operate and low-cost to set up
- You’re personally liable for all debts
- You are taxed on all the income in the business, not very good for tax planning
Partnership:
- Suitable if you’re starting a business with another agent
- Shared income and tax responsibilities
- Each partner pays tax on their share of profit
Company:
- A separate legal entity that pays tax at the corporate rate (currently 25% for base rate entities)
- Offers asset protection and may reduce your personal tax liability
- Limits the personal liability of the director if something goes wrong
- More compliance and reporting obligations
Trust:
- Can be tax-effective if set up correctly
- Allows income to be distributed to beneficiaries
- Gives asset protection to beneficiaries
Tip: The right structure depends on your goals, income level, and future plans. It’s best to speak with an experienced accountant before deciding.
Get Professional Help: Accountants, Bookkeepers, and Software
Real estate agents juggle demanding schedules, and tasks like tax, invoicing, receipts, and payroll can quickly become time-consuming. That’s where specialised accounting services for realtors make a difference.
- Accountants: An experienced accountant will help you establish the right business structure, guide you on effective tax planning and savings strategies, and ensure your business remains compliant with ATO regulations.
- Bookkeeping: Professional bookkeeping service for real estate agents covers everything from daily transaction records to reconciling your books, helping you stay on top of your financial affairs.
- Accounting software: Software like Xero or MYOB can automate much of your record-keeping work and integrate with your bank accounts for a seamless payment experience.
At Taxgain, we deliver end-to-end accounting services for realtors. From employed agents to agency owners, we help you remain compliant, reduce tax, and maximise your income.
Summary
Tax and accounting don’t have to be a headache for real estate professionals. When you understand your obligations, claim the right deductions, stay on top of tax and GST compliance, and choose the right structure, you free up more time to sell properties and close deals.
From choosing the right business structure to compliance and tax planning, we’ve got your back. Our real estate accounting experts specialise in accounting and tax planning to keep your finances on track year-round.
Need expert accounting services for realtors? Contact us today for a free consultation, and let’s take the stress out of tax time.