How real estate commission works in Queensland: negotiated and written

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Ask ten Queensland homeowners what an agent charges and most will answer with a percentage they heard from a neighbour. Ask the regulator and the answer is shorter: there is no set figure. Commission in Queensland is a private agreement between a client and a licensed agent, and the State's role is limited to making sure that agreement is written down properly before any work begins.

That arrangement surprises people on both sides. Sellers often assume there is an official rate they are being asked to pay. New agents sometimes assume there is a standard they are expected to charge. Neither exists. This guide explains how the system works in its place: where the freedom to negotiate comes from, what has to be on paper, what the figure includes, what it pays for, what else an agent has to disclose, and what happens when the paperwork is not right. It describes the general rules and does not quote a market rate, because the law does not have one.

Office of Fair Trading guidance on charging commission; Real Estate Institute of Queensland guidance to members.

A negotiated price, with no scale behind it

The Office of Fair Trading, which regulates property agents in Queensland, states the position plainly in its guidance on charging commission: there is no cap on the amount, and agents and clients may negotiate freely.

It was not always so. The Real Estate Institute of Queensland notes in its guidance to members that commission rates were deregulated in 2014, which removed the prescribed maximums that had applied before. The change arrived with the Property Occupations Act 2014, the law that still governs how agents are licensed and appointed.

The REIQ draws a firm conclusion from deregulation: there is no standard commission rate for residential sales in Queensland. It also warns its members about the language they use. An agent who tells a client that a rate is "REIQ approved", or anything similar, risks misleading conduct under consumer law, because no body approves commission and each engagement is negotiated on its own.

The practical meaning is that a commission is a price like any other price for a professional service. Two agencies in the same street may quote differently, and one agency may quote differently for two homes. A figure a seller has heard from a friend describes that friend's agreement and nothing more.

What has to be written down

Freedom over the amount comes with strict rules about the record. A Queensland agent cannot act for a client until the client has appointed them in writing, and for residential property the appointment is made on a prescribed document, Property Occupations Form 6.

The Office of Fair Trading lists what the appointment must state about money. Each item answers a question that otherwise tends to be argued about later.

The regulator adds a general limit: an appointment must not contain unfair contract terms. Agencies commonly attach their own terms and conditions to the prescribed form, and those pages are part of what the client signs.

The appointment is also where the kind of agency is chosen. An open listing, a sole agency and an exclusive agency each give the agent a different entitlement to commission, and the choice is made on the same form. That subject has its own rules on term and renewal and is not repeated here. For commission, what matters is that the form records both the amount and the circumstances in which it becomes payable.

A figure that already includes GST

An agent's commission is a fee for a service, and the service attracts goods and services tax. Queensland removes one common source of confusion by requiring the figure on the appointment to be the full one. The Office of Fair Trading says the commission must include GST and that the appointment must clearly state this. The REIQ gives its members the same instruction: specify commission as GST inclusive.

The rule matters because a percentage sounds the same with or without tax. A rate discussed across a kitchen table as "two and a half" could mean 2.5 per cent in total, or 2.5 per cent with a further tenth to come. Only the first reading can be written on a Queensland appointment.

A worked example shows the size of the difference. The figures are illustrative. On a sale of $800,000, a commission of 2.5 per cent including GST is $20,000. If the same 2.5 per cent were quoted before GST, the amount payable would be $22,000. The gap of $2,000 is the tax, and on the form it must already be inside the number.

For most people selling a home they have lived in, that tax is a final cost. The Australian Taxation Office explains that a sale of existing residential premises is input taxed, which means the seller does not charge GST on the price and cannot claim credits for GST on purchases made for the sale.

Fixed at the moment of signing

The Office of Fair Trading's guidance contains a short sentence with long consequences: the commission is set in writing at the time of the appointment and cannot be altered afterwards.

This cuts both ways. An agent cannot decide mid-campaign that the home has proved harder to sell than expected and raise the fee. A seller cannot decide after a strong result that the fee now looks generous and pay less. The figure agreed before the first photograph is the figure deducted at the end.

It also explains why the negotiation happens when it does. The time to discuss the rate, the structure and the conditions is before the form is signed, because the form closes the discussion. If the parties later want different terms, the route is a new appointment made in the proper form, not an informal understanding. The prescribed form provides for reappointment as well as appointment for that reason.

The shapes a commission can take

Deregulation freed the structure as well as the level. Because the law asks only that the commission be recorded, the parties may express it in whatever way suits the sale.

The most familiar form is a flat percentage of the sale price. The agent's fee rises and falls with the result, a dollar at a time.

A fixed fee is a set sum whatever the price. It gives the seller certainty about the cost and is sometimes used where the price range is narrow or the property is unusual.

A tiered arrangement applies one rate up to an agreed price and a different rate beyond it. It is designed to pay the agent more for the part of the price that is hardest to achieve. Its wording needs care, because "a higher rate above the target" can mean a higher rate on the excess only or a higher rate on the whole price, and the two give different answers.

Any of these can be written on a Queensland appointment. What cannot be done is to leave the method vague. Where the commission is a percentage, the calculation refers to the price actually achieved, and the form needs to say enough for a third person to work out the dollar amount from the contract of sale.

What a commission pays for

The percentage on the form is gross income to the agency, not to the person who shows the home on Saturday mornings. Understanding where it goes helps explain why agents value it and why it varies.

The first thing it pays for is the campaigns that fail. In a sale by private treaty or auction, the agency usually carries its own time and overheads until a contract settles. An appointment that expires without a sale normally produces no commission at all, so the fees from completed sales fund the work done on those that did not complete.

The second is the people. A salesperson employed by an agency is covered by the national Real Estate Industry Award, which requires any commission arrangement between employer and employee to be recorded in writing. For those employed on commission alone, the award sets a floor: at least 31.5 per cent of the employer's gross commission on the sale. Above that floor the split is a matter for each agency and each agent. The balance stays with the business to cover its office, its licence and insurance costs, its administration and its principal.

None of this changes what a seller pays, which is the figure on the appointment. It does explain why commission is the profession's living and why an agency's quote reflects its costs, its confidence in the sale and its view of the work involved.

Commission and marketing are separate lines

The appointment separates the agent's reward from the cost of the campaign. The Office of Fair Trading requires it to state, in addition to commission, any other expenses such as advertising and marketing, and the due dates for payment.

The distinction matters most when a home does not sell. Commission usually depends on a sale. Marketing expenses depend on what the form says: if they are payable on signing or on invoice, they are owed whatever the outcome; if they are payable from the proceeds at settlement, the agency has funded them in the meantime.

It also matters when comparing quotes. One agency may fold more of the campaign into its fee and quote a higher rate with a small marketing budget. Another may quote a lower rate and bill the campaign in full. The rate alone does not show which costs the seller less. The total of both lines, on the same expected price, does.

When the money changes hands

A commission that has been earned still has to be paid, and the appointment fixes the timing. In an ordinary residential sale the buyer's deposit is held in the agent's trust account, and the Queensland Government's guidance for sellers describes the agent deducting the commission at settlement and passing the balance to the seller.

The harder cases are the sales that do not reach settlement. The Office of Fair Trading notes that commission may still apply if a sale is not executed, depending on what the appointment provides, which is why the form must spell out the circumstances.

Tribunal decisions show how closely the wording is read. In a claim brought by Limitless Property Qld Pty Ltd and reported as [2022] QCATA 13, decided by the Queensland Civil and Administrative Tribunal's appeal division on 3 February 2022, the appointment made commission payable when a contract was entered into and settled, or when a contract was terminated by mutual agreement. The buyer ended the contract under its building inspection condition and the seller accepted that. The appeal tribunal held that accepting a buyer's exercise of a contractual right is not a mutual agreement to terminate, and the agency's claim failed.

The lesson is general. The event that triggers payment is whatever the form names, read as a court or tribunal would read it.

Other benefits an agent must declare

Commission from the client is not the only money that can move around a sale, and Queensland's rules require the rest to be visible.

The Office of Fair Trading's guidance on disclosure says agents must tell prospective buyers about fees, commissions or other benefits paid to or received from third parties in connection with a sale. Its examples include referral payments involving mortgage brokers, inspectors, marketing firms and other agents. The REIQ explains that the disclosure covers the amount, value or nature of any benefit the agent has received, receives or expects to receive, and any relationship with a business the agent refers the buyer to. It is made on an approved form, Property Occupations Form 8, before the contract is signed.

The penalties show how seriously the rule is taken. The REIQ puts the maximum for a breach of the disclosure section, section 157 of the Act, at 200 penalty units. The Office of Fair Trading lists the possible consequences of failing to disclose an interest as including repayment of commission to the client, fines, conviction and imprisonment.

The aim is that nobody in the transaction is paid in a way the affected party cannot see.

When the paperwork is wrong

Because commission rests on the appointment, a defect in the appointment can defeat the claim.

The District Court summarised the central provision in Podium Project Marketing Pty Ltd v B Global (Aust) Pty Ltd, decided on 12 December 2024. Section 89 of the Property Occupations Act, the court said, prevents an agent from recovering commission unless three things are true: the agent held a licence when the work was done, the work was authorised under that licence, and the agent was properly appointed by the client. The court described the section as protecting consumers from paying people who are not licensed or not properly engaged.

For an agent, that makes the form a condition of being paid. For a client, it is a reason to keep the copy handed over on the day of signing.

Reading a published average

From time to time a survey reports an average commission rate. On 28 May 2026, the trade publication Elite Agent covered a report by the software company Reapit that put Queensland's average at 2.33 per cent of the sale price, against a national 1.95 per cent, for sales recorded on its platform between September 2025 and February 2026.

A figure like that is a description of past agreements among the agencies in one data set. It is not a scale, and under the REIQ's own guidance it should not be presented as a standard. It does not show whether the appointments behind it were flat, fixed or tiered, how much marketing sat outside the fee, or how rates differ between a Brisbane unit and a regional acreage.

The useful comparison for any one sale is narrower: the commission including GST, the marketing schedule and the conditions for payment, each in writing, from each agent being considered.

In Queensland the law does not say what a commission should be. It says where the commission must be written, and holds both sides to what is written there.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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