Is a Real Estate Commission Rebate to Buyer Taxabl...

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Is a Real Estate Commission Rebate to Buyer Taxable?

When we purchased our new home, our real estate agent gave us a commission rebate cheque as a rebate for the commission to help us financially. is this considered as part of our yearly income and we should pay tax over it? or should we deduct this value from our overall purchase price and consider the house has been purchased in less value?

is there any reference to CRA website for this question?

Thanks

2 Replies
Moderator

Is a Real Estate Commission Rebate to Buyer Taxable?

Since CRA has little information available online, it's always a good idea to contact the agency directly with your specific circumstances. This link provides different ways to contact CRA  https://turbotax.community.intuit.ca/questions/1189856

 

Based on the information you have provided, it feels like the commission rebate will not be taxable. If the agent reflected the rebate in their agreement, then it would be nothing more than a lower commission fee- which would be treated the same as any other commission fee when it comes to Capital gains. If this is an investment property, you should just include the net fees in any calculations. 

 

Thanks!

Moderator

Is a Real Estate Commission Rebate to Buyer Taxable?

Based on the information you have provided, the rebate should be included in the purchase price. Just like real estate commission is accounted for at the time of home sale, real estate commission rebate should be accounted for in the Adjusted Cost Base (ACB) at the time of sale.

 

Here is a CRA link that can be helpful: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

 

Thanks!

v