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Let us help you get your taxes right

We know many real estate agents are doing the right thing, so tax returns where personal expenses have been claimed or other expenses have been inflated stand out. 

We're here to help you get your tax right. Know what you can and can't claim - read through the guidance below.

Watch our pre-recorded seminar

Our pre-recorded seminar for real estate agents covers the most common topics that you may need to know.



Audio transcript

Slide 1

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Our seminar today is designed to raise awareness of a trend we've identified with real estate salespersons and agents and to provide some education and assistance to help you and your accountant get your tax returns right.

Throughout this seminar we will be referring to real estate salespersons and agents collectively as real estate agents.

Slide 3 


What the matrix highlights is that a large portion of real estate agents have a relatively low expense to income ratio.

These are in the green and yellow cells. However it also highlights a number with relatively high ratios. These are the amber and red cells.

The orange and red causes us the greatest concern. A sample of these agents highlights the claiming of private expenditure and not keeping log books or other business records to support expense claims.

Our approach is to raise awareness and provide self-help material including this seminar in the first instance.

If we are concerned that someone has overclaimed expenses, they and/or their tax agent may receive a letter from us requesting they prove the expenses claimed.

Things like bank statements, invoices, a log book and any other information to confirm the expense is deductible.

Slide 4 


Good records are good business. Maintaining good records is important to meet your tax and legal obligations.

Benefits of good record keeping include

  • you pay the right amount of tax
  • you can reduce compliance costs
  • it keeps you in control.

If Inland Revenue was to query your expenses, the onus of proof is on you to provide evidence to support your expense claim.

In effect, no invoice equals no deduction. Therefore record keeping is very important and can cause unnecessary grief for customers if not done correctly.

Slide 5 


You can keep your records three ways. By paper, on the computer, or in the cloud.

A well-kept cash book will allow you to keep track of how much money is coming in and going out, help prepare cash flow budgets, and as the basis for preparing end-of-year financial accounts and other tax returns.

Many tax professionals have a preferred online accounting system or can recommend one suitable for your business.

You can photograph receipts and keep them as images, rather than keep paper. As many of you are aware, paper receipts fade over time.

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There are three types of business expenses - non-deductible, revenue and capital expenses.

Example of revenue expenses are advertising and stationery. Examples of capital expenses are vehicles, mobile phones and computers. These are not fully deductible, however depreciation may be claimed.

From 17 March 2021 the threshold for low value assets has permanently increased to one thousand dollars.

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Non-deductible expenses.

  • Private meal expenses.
  • Clothing, unless it's a uniform with a visible logo or it's protective in nature.
  • Personal grooming including hair, nails, makeup, skin care and cosmetic surgery.
  • Golf and gym memberships.
  • Penalties and fines - Parking or traffic fines are non-deductible even if it's during business trips.

All of these expenses fall under the private limitation, section DA 2, of the Income Tax Act 2007.

Slide 8


Vehicle expenses. Three ways to work out your expenses are

  • portion of actual cost
  • kilometre rates
  • fallback option - up to 25 percent of vehicle expenses.

Just note you must have a log book for options one and two. 

Go to and search 'vehicle logbook' and select 'use a logbook'.

There are plenty of apps available to assist too.

It's unlikely that a vehicle is 100 percent business, and we would expect to see an apportionment.

Slide 9


Gifts. Gifts may be able to be claimed for tax purposes. To be claimed the gift must relate to earning your income.

You can partly or fully claim gift expenses depending on the type of gift. For example, only fifty percent for food and drink can be claimed.

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Entertainment. You may be able to claim business entertainment expenses.

You may normally claim 50 percent of the bill. For example, a business lunch or dinner.

There's an entertainment booklet IR268 with more detail.

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Record keeping for gifts or entertainment. You must record the following for gifts or entertainment:

  • the name of the person or persons
  • their business, and the position or positions they hold where applicable
  • the property address the gift or entertainment relates to
  • the reason for the entertainment, and
  • invoices and receipts.

Slide 12


There are two methods for working out home office expenses.

The first option is calculating your own square metre rate as above in the example.

The second option is using Inland Revenue's square metre rate, which can be found on

Option 1 is usually most beneficial.

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Other business expenses you can claim include the REA licence and training. Please note the real estate qualification is not deductible.

For telephone and home lines, you can claim 50 percent of the telephone rental, plus any business, toll or mobile calls. Please note this only applies when the home is the centre of operations.

For telephone mobile phones, prepaid, you can claim a reasonable percentage. For a plan, business calls are fully deductible.

For the internet, you can claim the percentage of business use.

For advertising and marketing, claim the costs.

For ACC, the ACC levies are calculated on the end-of-year net profit.

Insurance is fully deductible if specifically related to the business.

For salary and wages, gross wages paid to employees are fully deductible.

Slide 14


Tips for filing GST returns.

Your tax invoices will show your total commission, tax and GST.

When completing your GST return, include your total commission based on your invoice. This is letter B on the invoice.

We often find that customers return the net amount based on what is in their bank statement, letter D on this invoice.

If you use the figure from your bank statement, letter D in this example, you'll be missing the tax and under declaring your income.

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Remember, Inland Revenue is here to help.

Good records are key for a successful business and there are lots of places you can go to find useful information.

For more information on real estate, go to and type in the search box 'real estate'.

There are useful fact sheets available on expenses (IR830A), and working in the real estate industry, GST and tax obligations (IR830).

You can email us general queries at [email protected] and customer specific queries through your myIR account.

Good records are key for a successful business.

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Join a seminar or request a business advisory visit

Whether you're already in business or considering setting up a real estate agency, you can make an appointment to see us. We run free seminars and workshops online and in person on topics like income tax, GST and becoming an employer. 


Request a business advisory or social policy visit

Read our guides

Our guides will help you understand your responsibilities and include specific information for those working in the real estate industry. 

Income tax and GST

Make sure you're comfortable with income tax and GST as it applies to your work.

Real Estate Expenses

If you want to know specific information about claiming expenses in real estate, refer to this guide.  

Consider these questions

Check that you're on the right track and stop mistakes before they happen. 

In addition to claiming correctly, you also need to keep records. These may be needed as proof of your claims.

Good practice for real estate agents is to record property references for the expenses you claim. For example, add to the information in your bank statement who you had dinner with and what property address it related to.

Record keeping

To help your clients learn more about residential property deductions rules (also known as the ring-fencing rules) including changes that limit the amount of interest deductions they can claim, consider these pages.

Residential rental property deductions

Rental property expenses

The bright-line test could apply to any property if it is bought and sold within a certain time. More information about how this might relate to you and your clients can be found on this page.

The bright-line test

If you're self-employed or in business, once your turnover is $60,000 or more a year you need to charge 15% GST on your sales and income and pay it to us. You can claim GST back on your purchases and expenses. If you work for an agency, they may require you to be GST registered no matter what your turnover is (because they are GST registered and charge their customers GST on commissions).

Have outstanding GST returns or debt? Get your GST sorted now.

What GST is

Registering for GST

Filing and paying GST, and refunds

If you're behind on filing or paying your debts and can't afford to pay everything off in one lump sum, you can request an instalment arrangement. By paying off your debt over time, you reduce the amount of interest charged on your debt, and show us that we don't need to take further action to make sure you pay what you owe.

Apply for an instalment arrangement

Talk to a tax agent or consider accounting software

We understand you're often on the go. While running a business, there's not always a lot of time left for tax. Consider hiring a tax agent (e.g. an accountant) or using accounting software to give you a helping hand.

Put past returns right - voluntary disclosures

If you've realised that you've over-claimed your expenses in a past tax return, it's not too late to go back and fix it. It's better to tell us now, rather than waiting for us to find out some other way. 

By making a full voluntary disclosure, you may have your shortfall penalty reduced by up to 100%, and you may avoid prosecution. 

Make a voluntary disclosure

Report tax evasion or fraud anonymously

You have an important role in keeping your industry fair for all. If you know someone is claiming back more than they’re allowed to, you can let us know confidentially. 

Report tax evasion or fraud anonymously

If you have any questions, you can contact us at 

[email protected]