Last Updated: December 2025 | Last Verified: December 2025
Key 2025-26 Updates
Disclaimer: This guide provides general information only and does not constitute financial, legal, tax, or compliance advice. Scale Suite is a registered BAS agent, not a registered tax agent. For tax advice specific to your circumstances, consult a registered tax agent. Trust account requirements and real estate regulations vary by state and territory. Always verify current requirements with your state's fair trading or consumer affairs body.
Real estate agencies face bookkeeping challenges that differ substantially from standard businesses. Agencies must manage statutory trust accounts holding tenant bonds and rent, track complex commission arrangements with sales agents, reconcile property management income across hundreds of properties, and comply with state-specific regulations that carry significant penalties for non-compliance.
Data from state consumer affairs bodies shows that trust account irregularities remain the leading cause of real estate licence suspensions. In New South Wales alone, hundreds of compliance actions are taken annually against agencies for trust account breaches, with penalties reaching $22,000 per offence for individuals and $110,000 for corporations.
This comprehensive guide explains how to manage bookkeeping for real estate agencies in Australia, covering trust account compliance, sales commission structures, property management accounting, and the state-specific requirements that agencies must navigate.
Real estate agencies require a chart of accounts separating sales revenue from property management revenue, distinguishing trust funds from operating funds, and tracking commission splits with individual agents.
Agency income should be separated by business line:
Sales Revenue:
Property Management Revenue:
Other Revenue:
Real estate agencies must maintain trust accounts for:
Trust account requirements vary by state. In New South Wales, agencies must maintain a general trust account and may maintain separate accounts for sales deposits. In Queensland, all rental bonds must be lodged with the Residential Tenancies Authority.
Trust account compliance is non-negotiable for real estate agencies. Breaches carry significant penalties and can result in licence cancellation.
Client Money Received (rent, deposit, bond)↓Deposit to Trust Account (within 1-2 business days per state rules)↓Record in Trust Ledger (individual client/property accounts)↓Monthly Trust Reconciliation (within 10 days of month end)↓Disbursement (rent to landlord, deposit at settlement, bond per agreement)↓Transfer Earned Fees to Operating Account
Client money must be deposited into the trust account within prescribed timeframes, which vary by state but are typically within one to two business days of receipt.
Example: An agency collects $2,400 rent on Monday, $1,800 rent on Tuesday, and a $5,000 sales deposit on Wednesday. Each amount must be deposited into the trust account within the prescribed period.
When rent received:
When sales deposit received:
Trust money can only be disbursed for authorised purposes. Rent is disbursed to landlords (less management fees), bonds are disbursed per tribunal orders or mutual agreement, and sales deposits are disbursed at settlement or per contract terms.
Example: Monthly rent collected for a property is $2,600. Management fee is 7.7% including GST ($200.20).
The disbursement is:
When the management fee is transferred, record in operating books:
Trust accounts must be reconciled monthly at minimum. The reconciliation must show:
Any discrepancy must be investigated immediately. In most states, trust account reconciliations must be completed within specific timeframes (typically 10 days after month end) and retained for audit purposes.
Real estate sales commission involves complex arrangements including splits with agents, GST treatment, and timing of recognition.
Sales commission is typically recognised when the sale becomes unconditional, not when the sale settles. This is when the agency has earned the commission and has an enforceable right to payment.
Example: A property sells for $850,000 with 2.2% commission including GST ($18,700). The sale goes unconditional on 15 March and settles on 28 April.
Commission is recognised on 15 March:
Most sales agents work on commission splits rather than salary. Common arrangements include:
Important: The ATO uses a multi-factor test to determine contractor versus employee status. Following the High Court decisions in CFMMEU v Personnel Contracting and ZG Operations v Jamsek, the emphasis is on the terms of the written contract rather than how the relationship operates in practice. However, a contract cannot override the true nature of the relationship if the written terms do not reflect reality.
Key factors include:
Example: Sale generates $18,700 gross commission (including GST). Agent is on 60/40 split.
If the agent is an employee, their share is wages subject to PAYG withholding and superannuation (12% from 1 July 2025). If the agent is a contractor (with their own ABN), their share is a contractor payment and they invoice the agency including their own GST.
When two agencies share a sale (one has the listing, one has the buyer), commission is split between them.
Example: Total commission $22,000 including GST. Split 50/50 between listing and selling agency.
Each agency receives $11,000 including $1,000 GST. Each agency recognises $10,000 commission income.
Property management creates recurring revenue through management fees, letting fees, and ancillary charges.
Management fees are typically calculated as a percentage of rent collected, ranging from 5% to 10% depending on location and services.
Example: A property with $650 weekly rent generates $2,817 average monthly rent. At 7.7% management fee including GST, monthly fee is $217.
Letting fees (also called leasing fees) are charged when securing a new tenant, typically equivalent to one to two weeks rent.
Example: New tenant secured at $550 per week. Letting fee of 1.5 weeks rent:
Each landlord requires a monthly or periodic statement showing:
The sum of all landlord statement balances must equal the rent portion of trust liability. Reconciling these monthly identifies errors before they compound.
Real estate agencies benefit from integrated property management and accounting systems:
Property Management Software: PropertyMe, OurProperty, Console Cloud, or Rex for trust accounting, landlord management, and tenant portals.
Accounting Integration: Most property management platforms integrate with Xero or MYOB. Key integrations include:
Recommended Stack: PropertyMe or Console Cloud connected to Xero with automated trust reconciliation and owner statement generation.
Most real estate agency services are taxable at 10% GST:
Residential rent is input-taxed. The agency does not charge GST when collecting rent, and the landlord does not charge GST to the tenant. However, the agency's management fee for managing the property is taxable.
Commercial rent is typically taxable at 10% GST. The agency collects rent including GST on behalf of the landlord and the management fee also includes GST.
Trust Account Timing Breaches
Incorrect Commission Timing
Missing Agent Superannuation
Unreconciled Trust Accounts
Incorrect GST on Residential Rent
What are the trust account requirements for real estate agencies?
Real estate agencies must maintain statutory trust accounts for holding client money including rent, bonds (in some states), and sales deposits. Money must be deposited within prescribed timeframes (typically one to two business days). Trust accounts must be reconciled monthly with records retained for audit. Requirements vary by state, so check with your state's fair trading or consumer affairs body for specific obligations.
When should sales commission be recognised as income?
Sales commission should be recognised when the sale becomes unconditional, not at settlement. This is when the agency has earned the commission and has an enforceable right to payment. If a deposit is held in trust, commission can be withdrawn from trust once unconditional. The GST is also reportable at this point.
How are agent commission splits accounted for?
Agent commission splits are accounted for based on employment status. If the agent is an employee, their commission share is wages subject to PAYG withholding and superannuation (12% from 1 July 2025). If the agent is a genuine contractor with their own ABN, their share is paid on invoice and may include their own GST. The ATO's multi-factor test and recent High Court decisions emphasise the importance of written contract terms, but contracts cannot disguise a true employment relationship. Consult a registered tax agent for advice on your specific arrangements.
Is residential rent subject to GST?
Residential rent is input-taxed, meaning no GST is charged on residential rent. However, the agency's management fee for managing the residential property is a separate taxable supply and includes GST. Commercial rent is typically taxable at 10% GST.
What records must real estate agencies keep for trust accounts?
Trust account records must include receipts showing date received, amount, payer, and purpose. Cash book entries recording all receipts and payments, individual ledger accounts for each client or property, and monthly reconciliations between bank balance and ledger balances must be maintained. Records must be kept for the period required by state legislation (typically five to seven years) and be available for audit.
Scale Suite provides specialised bookkeeping and finance services for Australian real estate agencies. Our team can manage property management accounting across large portfolios, commission tracking and agent split calculations.
Contact Scale Suite for a free trust account health check or compliance review tailored to your agency.
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