Real estate marketing, gifts and the commission rule

You front the cost of selling other people's homes: the listing upgrade on realestate.com.au, the styling props for the open, the settlement gift when it all comes off, the extra pair of hands at a busy Saturday of inspections. The good news is that a lot of that is deductible. The catch is that whether you can claim any of it at all comes down to a single question about how you are paid, and this chapter is built around that question. Get it answered first, then read the rest.

The rule that decides everything: the commission gate

Self-funded marketing, client gifts, property-styling props and paying an assistant are deductible for a PAYG employee only if you earn commission, or commission plus a retainer. A fixed-salary agent with no commission entitlement cannot claim any of them. The ATO says it plainly for both: you can't claim advertising, and you can't claim gifts, if you earn a fixed salary and aren't entitled to earn commission. The logic is that these costs are what you spend to win the sale that pays your commission, so no commission entitlement means no connection to your income.

Most residential sales reps clear this bar comfortably, because a retainer plus commission is the standard deal. Many salaried property managers and admin staff do not, and for them this whole chapter is a list of things they cannot claim. So before you tally a single receipt, check your own arrangement: are you entitled to commission on a sale, or are you on a flat salary? Everything below assumes you cleared the gate.

Self-funded marketing and personal branding

If you earn commission, paid for the marketing yourself and weren't reimbursed, the work you do to promote listings and yourself is on the table:

• Advertising a listing. Newspaper ads, letterbox drops, for-sale signage and bunting, and upgrades to online listings on realestate.com.au and Domain.
• Content and creative. Professional photography and video, drone footage, flyers and brochures, and paid social ads to push a campaign.
• Promoting yourself. Business cards and personal branding that markets you as the agent to call.

Two catches decide how much of this survives. First, you can only claim what you actually funded: anything the agency reimbursed or the vendor paid for is not yours to deduct. The ATO's own example is the property advertising the vendor pays for, which the agent cannot claim because the agent never incurred the cost. Second, personal branding that builds a lasting asset, like a website, can be capital rather than an outright expense, so you claim it as decline in value over its effective life instead of writing off the full cost in the year you paid.

Marketing equipment

The gear you buy to make that content is claimable on the work-use share of its decline in value. A camera, a drone, a ring light or a tripod bought to shoot listings counts, but rarely at full value: an item over $300 is depreciated over its effective life, and if you also use it privately you apportion for that. The ATO's example is the camera that shoots listings during the week and family photos on the weekend, where only the work-use portion of the decline in value is deductible.

Client gifts versus entertainment (the line agents get wrong)

This is where returns quietly go wrong, because a gift can be deductible and entertainment never is, and agents keep filing the second as the first. The clean test is the immediacy of consumption: something the client takes away and consumes later is a gift, while something consumed on the spot or an experience is entertainment.

For commission earners, deductible gifts include a hamper, a sealed bottle of wine or whisky, gift vouchers, flowers, perfume, a pen set, or a settlement gift handed over at the close. What fails is anything that is really entertainment: tickets to a sporting event or a concert are a gift in the form of entertainment and are not deductible. Nor is straight entertainment, and this is the expensive part. Client lunches, coffees, dinners, drinks and events are never deductible, even where they are compulsory or you discuss work the whole time, and neither is the travel to get to them. Taking the vendor to lunch is not a gift, and relabelling that lunch as one on your return does not make it deductible.

Paying an assistant

If you earn commission, paying someone to help you earn more can be deductible: an assistant who runs open homes with you or handles buyer callbacks so you can list more property. It has to be a genuine arm's-length arrangement for real work, not a way to move money around. Payments to a relative are capped at the market rate for the work, so the ATO's example of a son paid well above the going rate only lets the agent claim the market rate, and a relative paid for something with no real connection to earning your income fails outright. This is a high audit-risk claim, so keep the evidence tight.

The records behind marketing and gifts

Marketing and gifts come down to the paper trail, and they are easy to lose because they arrive scattered across every campaign and settlement. Keep the receipt for every marketing spend and every gift, keep proof that you funded it and weren't reimbursed by the agency or the vendor, and for an assistant keep the arrangement and the hours worked. The ATO's free myDeductions app will hold the basics.

The bottom line

Answer the commission question first, because it decides whether any of this belongs on your return. If you earn commission and funded the cost yourself, the listing ads, the online upgrades, the photography and drone work, the settlement hamper and the assistant who helps you list more are all yours to claim. If you are on a flat salary, none of them are. And whatever you do, keep gifts and entertainment apart: the sealed bottle handed over counts, the lunch you shared never does. Claim the marketing that wins you the sale, and don't hand back what the pay structure entitles you to.

General information only, not tax advice. Check the ATO or a registered tax agent for your situation.