Why is HST charged on real-estate commission when the home sale is exempt?

Arsen Accounting Services · Question 148 · Sources checked October 29, 2026

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The real-estate service and the property sale are separate supplies. A resale home transaction may be exempt from GST/HST while the registrant's commission for providing brokerage services is taxable.

Review the service independently

CRA's GST/HST guidance distinguishes an agent's services from the underlying transaction. The tax treatment of the seller's property does not automatically carry over to advertising, legal, accounting, or brokerage fees connected with the sale.

For the agent or brokerage, the contract determines who supplies the service and who reports the commission and tax. Commission splits, referral fees, and expenses should be reconciled with brokerage statements rather than inferred from the net payout.

Official guidance: [1], [2].

Check what the quoted fee includes

For example, a seller may budget using the commission percentage but overlook tax on the service. Read whether the fee quote is before tax or tax-inclusive. For a real-estate professional, the corresponding statement should distinguish commission earned, tax, deductions, and the amount deposited.

Keep transaction records together

• Listing or representation agreement and fee terms.
• Brokerage commission statement and invoices.
• Referral or co-operating brokerage arrangements.
• GST/HST registration details for the supplying business.

Ask your preparer to reconcile gross commissions with information slips and bank deposits. If a corporation is involved, make sure the contract, invoice, and tax accounts identify the correct entity. A tax-exempt home sale is not a reason for a registered service provider to omit tax from an otherwise taxable commission.