I run a real estate brokerage — when do I book my commission as revenue, and does VAT apply to it?

The sale or lease of the property itself carries its own special VAT treatment — the first supply of a new residential property is zero-rated, subsequent residential leasing is exempt, and commercial property carries the standard 5%. The broker's or agent's commission is a completely different matter: it's a standalone brokerage service, and it always carries the standard 5%, whether the underlying deal is an exempt residential sale or a taxable commercial one — because the tax here falls on the brokerage service itself, not on the property.

The correct time to book the revenue in the accounts is when the deal actually completes — the signing of the final sale contract or transfer of title, or the signing of the lease — not when a deposit or initial reservation form is received. A very common mistake in smaller offices is recording the commission as revenue the moment an advance payment lands from the client, even though the deal could still fall through or the terms could still change before completion.

Another point that causes confusion: the VAT tax point can differ from the accounting revenue point — if the office receives an advance payment or issues an invoice before the deal completes, VAT falls due at that moment regardless of whether the revenue itself has actually been earned yet in accounting terms. The books need to separate the tax point from the actual revenue point, rather than treating the two as always falling on the same date.

Also, when commission is split between two offices (co-broking), each office should only book its actual share as revenue, not the full gross commission. Recording the gross commission as revenue and then the other office's share as an expense inflates the sales figure unnecessarily and distorts any real financial analysis. RASEEKH helps real estate brokerage offices build a clear recording and invoicing system from day one that keeps all these points straight.