Key Point About Buyers Agent Fee Tax Deductibility
Whether buyers agent fees are tax deductible depends on your individual circumstances, including whether the property is owner-occupied or an investment property.
Only a registered tax agent or accountant can advise on your specific situation. Iconic Assets is a buyers agent in Sydney – not a tax adviser.
Tax Treatment of Buyers Agent Fees
Tax treatment of property buyers agent fees may differ based on the purpose of your purchase:
| Property Type | General Tax Consideration |
|---|---|
| Owner-occupied home | Acquisition costs are generally not deductible but may form part of cost base for CGT purposes |
| Investment property | Treatment varies – may be acquisition cost (cost base) or potentially deductible depending on nature of service |
| Mixed use property | Apportionment may apply – discuss with your tax adviser |
This is general information only. Your tax adviser can explain how these principles apply to your situation.
Buyers Agent Fees for Investment Property
For investment properties, buyers agent fees may be treated in different ways:
- Acquisition costs: Fees related to acquiring the property typically form part of the cost base for capital gains tax purposes
- Research or advice component: Some portion may relate to deductible services – discuss with your tax adviser
- Immediate deduction: Generally not available for standard buyers agent services
The distinction between deductible and capital costs is complex. Your accountant can review the specific services provided and advise accordingly.
Buyers Agent Fees for Your Home
If you are purchasing an owner-occupied home:
- Buyers agent fees are generally not tax deductible for income tax purposes
- Fees may form part of your cost base if CGT applies when you sell
- The main residence exemption may apply, making CGT cost base less relevant
For first home buyers, other concessions may be available. See our First Home Buyers Guide for general information.
Topics to Discuss with Your Tax Adviser
When discussing buyers agent fee tax deductibility with your accountant, consider asking about:
- Whether the property is owner-occupied or an investment
- How buyers agent fees are treated – as acquisition cost or otherwise
- Whether any portion relates to deductible research or advice
- How non-deductible costs affect cost base for capital gains tax
- Current ATO guidance on property acquisition costs
- Record keeping requirements for property costs
- Interaction with other property-related deductions like depreciation
How Much Do Buyers Agents Charge?
Understanding buyers agent costs helps you discuss tax treatment with your adviser. Typical fee structures include:
- Fixed fees: $10,000 – $25,000+ depending on services and property type
- Percentage of purchase price: Typically 1.5% – 3%
- Retainer plus success fee: Varies by firm
For detailed fee information, see Buyers Agent Fees Australia and Buyers Agent Fees Sydney.
Frequently Asked Questions
Are buyers agent fees tax deductible for investment property?
It depends on the nature of the services and your circumstances. Some fees may form part of the property's cost base rather than being immediately deductible. Your tax adviser can explain how this applies to your situation.
Are buyers agent fees deductible for my home?
Generally, costs of acquiring your principal residence are not deductible for income tax purposes. However, they may affect your cost base if CGT applies when you sell.
What is the difference between a deduction and cost base?
A tax deduction reduces your taxable income in the year the expense is incurred. Cost base is used to calculate capital gains tax when you sell the property. Your tax adviser can explain which treatment applies to your situation.
Can Iconic Assets advise on tax deductibility?
No. Iconic Assets is a property buyers agent in Sydney, not a registered tax agent. We cannot advise whether fees are deductible. Consult your accountant or tax adviser.
Should I keep records of buyers agent fees?
Yes. Keep all invoices and documentation related to property purchase costs. These records are important for tax purposes and calculating cost base if you sell the property.
Related Pages
Consult Your Tax Adviser
Before engaging a buyers agent, discuss the tax treatment of fees with your registered tax agent or accountant. Iconic Assets provides independent buyers agent services in Sydney – your tax adviser handles tax questions.
Contact UsNot Tax Advice: This page provides general information only. Iconic Assets is not a registered tax agent and cannot advise on tax deductibility.
Tax Law Changes: Tax rules and ATO guidance can change. Obtain current advice from a qualified professional.
Seek Professional Advice: Consult a registered tax agent or accountant before making decisions based on tax considerations.