What Is GST in Queensland Real Estate? Definition and Agent Guide

A Queensland vendor quotes you 2.2% commission. You sign the Form 6, the property sells for $850,000, and the invoice arrives for $20,570 — not $18,700. That $1,870 difference is GST, and understanding exactly how it operates in Queensland real estate practice is not optional for any licensed agent. For commission disclosure, for property transaction structuring, and for fielding questions from interstate and overseas clients who have never encountered it before, the mechanics matter.

GST — the Goods and Services Tax — is a 10% federal tax on the supply of goods and services in Australia, administered by the Australian Taxation Office (ATO). In Queensland real estate, it has two distinct applications that agents deal with constantly: GST on their own commission as a professional service fee, and GST that may apply to the underlying property transaction itself. Neither is complicated once the rules are clear, but confusing the two — or mishandling either in your Form 6 or contract — creates real exposure.

How GST Works in Queensland Real Estate

GST on Agent Commission

Agent services are a taxable supply. The commission is a fee for professional services, and just like other services in Australia, it’s subject to GST. The rate is 10%, applied to whatever the agreed commission figure is before GST.

The arithmetic is straightforward. A 2% commission rate actually becomes 2.2% after GST is applied. On a $900,000 sale at 2.2% commission, the pre-GST commission is $19,800. The GST component is $1,980, bringing the total payable to $21,780. On higher-value properties, the GST component becomes material. A property agent must account for this clearly in the appointment before a single conversation about listing the property.

The critical legal requirement here is how this figure appears in the Form 6. A commission must include GST and clearly state this in the appointment to act, and be set in writing at the time of appointment. The REIQ is equally direct on this point: in accordance with the Property Occupations Act 2014 (Qld), agents must specify a commission amount that is GST inclusive and specify when commission is payable. This is a statutory obligation, not an administrative preference. Whilst commissions have always been inclusive of GST in accordance with the Property Occupations Act 2014, the wording in the Form 6 was bolded to include “including GST” for clarity.

GST on Property Transactions

The second, and often more complex, application of GST in Queensland real estate is at the transaction level — that is, GST on the sale price of the property itself.

The default position most Queensland agents work with every day is that the sale of an existing residential property is not subject to GST. In Queensland property transactions, GST is generally applicable to the supply of new residential premises, commercial premises and vacant land. GST is not applicable to the sale of existing residential properties, as they are considered as input-taxed supplies. A standard house-and-land resale in any Queensland suburb carries no GST on the purchase price itself — which is why residential agents rarely need to think about transaction-level GST on the overwhelming majority of their listings.

Where GST does apply at the transaction level is on new residential premises, commercial property, and vacant residential land. GST is generally payable on the sale of new residential premises, which includes properties that have not been sold before, or have been extensively renovated or altered. The GST rate for new residential premises is currently 10%. For agents working in the new-build, off-the-plan, or development space — increasingly common across South East Queensland — this distinction is fundamental.

Why GST Matters for Queensland Agents

What You Quote Is What Gets Disclosed

The market realities here matter. In Queensland generally, commissions are negotiable, and many residential sales are commonly quoted around 2% to 2.5% plus GST, although there is no legally fixed or standard rate. That “plus GST” qualifier changes the real cost to the vendor. If you quote 2.2% and the vendor hears 2.2%, then discovers at settlement that the figure is actually 2.42% of the sale price, you have a trust problem — not a legal one, but a practical one that affects referrals, repeat business, and your professional reputation.

The Form 6 should clearly state the rate and specify whether GST is included or excluded. Every agent should be in the habit of walking their vendor through the actual dollar amount they will pay in commission at a range of sale prices, including GST, before the Form 6 is signed. This is not overcomplying — it is simply professional practice that prevents disputes.

The REIQ has explicitly flagged the single most common mistake agents make in this area: commission shown excluding GST is one of the recurring errors identified in Form 6 appointments. An appointment that records the commission exclusive of GST, without the required GST-inclusive statement, is non-compliant. That non-compliance carries consequences. Under the Property Occupations Act 2014 (Qld), an appointment of a property agent or resident letting agent is ineffective from the time it is made if the appointment does not comply with section 104. If the form is not done properly, you can end up in a dispute about whether the agent was validly appointed, what they are entitled to charge, and what authority they had to spend money or take particular steps.

Real Dollar Impact at Current Queensland Commission Rates

The average Queensland commission is approximately 2.45% (plus 10% GST if not already included). On a Brisbane property selling at the city median, a 2.45% commission generates a meaningful GST component that vendors must budget for. Agent services attract 10% GST. If you’re selling new residential or commercial property and you’re registered, your accountant can advise on GST credits. For existing residential sales, the sale is generally input-taxed (no GST on the sale price), but GST still applies to the agent’s service.

This is a point worth reinforcing with interstate buyers and overseas investors who are new to the Queensland market. They frequently confuse the stamp duty and agent fee structures across different states, and they may not be aware that agent commission and the underlying transaction can have separate GST treatments depending on the property type.

GST Obligations on New Residential Property and Withholding

For Queensland agents who sell new residential premises, off-the-plan apartments, or newly subdivided lots, there is a specific withholding regime that directly affects how settlement is conducted.

The GST Withholding Regime

Effective from 1 July 2018, the Treasury Laws Amendment (2018 Measures No. 1) Act 2018 imposes obligations upon buyers of certain new residential premises and certain potential residential land to withhold and remit GST directly to the ATO. The new laws are primarily an anti-avoidance measure designed to prevent the occurrence of ‘phoenix’ companies which fail to pay GST on property transactions to the ATO.

Before this change, sellers would collect the full purchase price at settlement and remit GST through their Business Activity Statement, sometimes months later. Reform was proposed to combat the increasing number of unscrupulous property developers who sell new residential premises or new lots in a subdivision (which is a taxable supply), collect GST from the buyer on settlement and liquidate the development company, rather than remitting the GST to the ATO through their BAS.

The withholding amount is not an additional cost to the buyer — it comes from the seller’s proceeds. If the seller is registered for GST and is selling ‘New Residential Premises’ or ‘Potential Residential Land’, the seller is required to provide an ATO GST Withholding Notice. The buyer will be required to complete a GST Property Settlement Withholding Notification Form, a GST Property Settlement Date Confirmation, and draw a cheque for 1/11th of the purchase price (or 7% if the margin scheme applies) to the ATO and hand this to the seller at settlement. Importantly, the GST withholding amount is paid out of the seller’s sale proceeds and is not in addition to the purchase price.

Seller Notification Obligations

Sellers have a strict obligation to notify buyers, regardless of whether withholding applies. A seller is required, prior to making a supply by way of sale, of any residential premises or of any potential residential land, to provide to the buyer a written notice stating whether the other entity will be required to make a withholding payment.

Failure to comply carries significant penalties. Failure to comply will attract a maximum penalty of $21,000 for individuals, and $105,000 for companies. For agents working with developer clients selling new stock, drawing the developer’s attention to their withholding notification obligations before contracts are prepared is part of professional service — not outside the agent’s remit.

The Margin Scheme

Agents working with investors and developers will also encounter the margin scheme — an alternative calculation method for GST on certain property sales. The GST margin scheme is a taxation mechanism allowing property developers and sellers to calculate GST based on the margin of the sale price rather than the full consideration. This provision is particularly pertinent in transactions involving the sale of real estate where the property’s value appreciates over time without significant improvements.

Under the margin scheme, GST is calculated on the sale as 1/11th of the margin. The margin is the GST inclusive sale price less the original purchase price, whereby previously GST was not able to be claimed. This can produce a substantially lower GST liability than applying the flat 10% to the full sale price — which is why it is widely used in Queensland development transactions.

Agents do not administer the margin scheme. That is a matter for the seller’s accountant and conveyancer. There must be a written agreement between the seller (vendor) and the purchaser for the margin scheme to apply AND the written agreement must be made on or before settlement. The agent’s role is to be aware that when a contract references the margin scheme, the GST withholding calculation changes — from 1/11th of the purchase price to 7% — and to flag this to all parties early in the transaction.

What Queensland Agents Need to Know About GST

Your Form 6 Compliance Checklist

There is no ambiguity in what the Property Occupations Act 2014 (Qld) requires. Sections 104 and 105 govern the content of the appointment, and both relate directly to how commission — inclusive of GST — is expressed. The commission payable must be inclusive of GST. The commission can be expressed in a number of ways, which may include as a percentage or a flat fee (or a combination of both), however, it is imperative that agents clearly express the commission payable and that the client fully understands the likely amount.

The practical failure mode is expressing a rate in the Form 6 and relying on the vendor to work out the GST-inclusive total for themselves. This is insufficient. A compliant appointment records the GST-inclusive figure, is clear about whether the quoted rate already includes or excludes GST, and — where commission is expressed as a percentage of an estimated sale price — complies with the additional requirements in section 105, which ties the calculation to the actual sale price rather than estimates.

Commission rate is negotiable and must be agreed in writing before the agent starts work. Once the Form 6 is signed, the commission cannot be changed. You may not change your commission once you and the client have signed your appointment. Getting it right — GST-inclusive, clearly expressed, with the trigger for payment stated — before signing is the only protection available to both parties.

Handling GST Questions from Vendors and Buyers

Vendors occasionally ask whether they can claim the GST component of agent commission back as an input tax credit. The answer depends entirely on whether the vendor is registered for GST and whether the sale is a taxable supply for them. For a private individual selling their home as an existing residential property, no input tax credit applies. For a GST-registered entity selling commercial property or new residential premises, the commission GST may be creditable. The agent’s job is to make clear that this is a question for the vendor’s accountant — not to answer it.

For interstate buyers, particularly those accustomed to Victoria or NSW market conventions where commission is sometimes quoted differently, the “plus GST” framing used by many Queensland agents can cause initial confusion. The solution is simply stating the total dollar figure upfront: at $900,000 sale price, the commission is $X including GST. Clarity from the first conversation removes any grounds for later dispute.

For overseas investors purchasing new residential premises, the GST withholding regime introduces an additional step at settlement. When you have a withholding obligation, you must complete Form one: GST property settlement withholding notification online or via e-conveyancing (PEXA). Agents working with offshore buyers should ensure their conveyancing team is briefed on the buyer’s registration status early, so there are no surprises on settlement day.

Referral to the ATO and Accountant — and When to Stop

An agent’s obligation is accurate disclosure of their fee, GST-inclusive. The broader questions — whether a vendor must register for GST, whether the margin scheme applies to their development, whether they can claim input tax credits on the commission paid — sit squarely with a registered tax agent or accountant. The ATO’s resources at ato.gov.au cover GST in property transactions in detail, including the withholding regime. Queensland Revenue Office Public Ruling DA011.1.1 specifically addresses how GST interacts with transfer duty on dutiable transactions.

Providing factual information about how GST applies to your commission is appropriate. Advising a vendor on their GST registration obligations for a development project is not.

What This Means for Queensland Agents

GST on your commission is mandatory and must appear GST-inclusive in the Form 6. Expressing a rate that excludes GST, without the corresponding inclusive disclosure, is a recurring compliance failure that the REIQ has specifically flagged — and it risks the validity of the appointment itself under the Property Occupations Act 2014 (Qld). There is no grey area here.

GST on the property transaction is separate and property-type dependent. Most residential resales involve no transaction-level GST. New residential premises, commercial property, and vacant residential land do — and since 1 July 2018, a buyer-side withholding obligation applies on new residential and potential residential land, with penalties up to $105,000 for corporate vendors who fail to notify.

The margin scheme affects the withholding calculation. When a development sale involves the margin scheme, the withholding drops from 1/11th of the purchase price to 7%, but the written agreement to use the scheme must be in place before settlement. Agents facilitating development sales need to flag this to the parties well before settlement day.

Your vendor conversation should always include a dollar figure. Percentage rates are ambiguous until the sale price is known. Presenting the estimated commission in dollar terms — including GST, at two or three price scenarios — before the Form 6 is signed is best practice. It removes the most common source of commission disputes and demonstrates the kind of transparency that builds the referral relationships that sustain a Queensland real estate practice.