Real Estate Agency Service and GST

Why do I have to pay for GST to the Agency which I appointed to sell/rent my house?

Little known fact about GST in Estate Agency Practice. Some people try to save on commission when dealing with agents and brokers. Apparently, some discounts are given being “illegal”.

The fact that if he is illegal, there is no GST. You save the 6% GST. How I wish this could be true in real life!

Who pays for GST?

He who appoints the representative, because he receives the service of estate agency.

That is most of the time the owner. And, the fact that the representative who does not collect GST is nothing to do with its legality in its profession. Simply, it means the collection of GST has nothing to do with whether he is illegal or a legal agent. This is little known.

Let me give the example of “prostitution” as a service. It is illegal. However, a “prostitute” still need to pay tax! So, irrespective of who this representative is (being a illegal broker or registered agent), the duty to pay GST is not about his legality, but that a service had been rendered.

Indeed, if you are an owner, and you don’t pay GST to an agent, the agent has to pay it out from his commission received. That is “GST inclusive”. So, engaging an illegal broker, it is “GST inclusive”, that is all. If he ever be caught, he is himself in deep trouble. And, if that is the choice, you can mention it to the registered agent, he might just waive it for you as well!

Own account.