Brokers Commission Fee

Discussion in 'Accounting & Tax' started by Pleasure Paulie, 14th Nov, 2017.

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  1. Pleasure Paulie

    Pleasure Paulie Well-Known Member

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    13th Jul, 2015
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    QLD
    I have the option of paying for my brokers commission fee upfront and receiving a 5% discount and he pays me or back when they receive it - 3 months time.

    Or just paying nothing and he takes the broker commission when he is paid by the bank.

    Is there any tax benefits to paying up front and receiving an invoice?
     
    Pleasure Paulie, 14th Nov, 2017
    #1
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    Adelaide and Gold Coast
    Sounds to me like they need to come up with a creative solution to smooth their own cashflow.

    Perhaps use one that doesn't have this issue, as it goes hand in hand with them having any clients. And if they don't, they're probably not experienced enough to do the best possible job for you.
     
    D.T., 14th Nov, 2017
    #2
  3. John_S

    John_S Mortgage Broker

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    Gold Coast
    Why cough up for something the bank is willing to pay for?

    Do you really want to chase the broker for your money back if the deal falls through?
     
    John_S, 14th Nov, 2017
    #3
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Sounds strange

    I’ve never heard of this happening before

    Cheers

    Jamie
     
    Jamie Moore, 14th Nov, 2017
    #4
  5. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Maybe it's a way to get paid even if the loan is declined or a pre-approval doesn't convert?
     
    Jess Peletier, 14th Nov, 2017
    #5
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Strange indeed..

    Brokerage is a borrowing cost and deductible over 5 years or term of loan if shorter. But if he reimbursed you it won't be deductible
     
    Terry_w, 14th Nov, 2017
    #6
  7. Ross Forrester

    Ross Forrester Well-Known Member

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    The net brokerage paid is a borrowing cost and deductible over 5 years if it relates to an income producing property.

    If you are given a cash back the cash back is taken into account in determining the net brokerage paid by you.

    So their is no tax impact by paying more with a cash back or paying less willthout a cash back. The net is the same.
     
    Ross Forrester, 14th Nov, 2017
    #7
  8. Xenia

    Xenia Well-Known Member

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    Wow I wonder if I can ask for all management commissions paid up front for a discount.

    Money now is worth more than money later but only for the person receiving it
     
    Xenia, 14th Nov, 2017
    #8
    Terry_w likes this.
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Strange offer. I would allow the broker to address their own income from the bank and not get involved in a issue that could then liable to two lots of GST for them and later be a issue for the ATO. This indicates a potential lack of clarity...How good is the broker at their job ? ....when they ask you to lend them their income.

    I have never heard of this. I wouldnt part with a cent for fear you will be stitched up.
     
    Paul@PAS, 15th Nov, 2017
    #9