Rebates, cashback and gifts in a Queensland sale: who must be told

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Kooky

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

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The commission on a Queensland sale is the figure everyone sees. Around it sits a quieter layer of money: a discount an advertising supplier gives the agency for placing a campaign, a referral reward from a mortgage broker, a cashback a developer promises a buyer at settlement, a holiday offered for an introduction. None of these is unlawful in itself. What the law cares about is who knows about them, and when.

That question matters to three people. A seller wants to know whether part of the marketing budget they pay comes back to the agency. A buyer wants to know whether the broker or inspector the agent recommended pays the agent for the introduction. And a buyer offered a cashback on a new apartment needs to know how the lender and the Queensland Revenue Office will see the price.

This guide follows each of those benefits in turn: what the Property Occupations Act 2014 requires in the seller's appointment, what must be shown to a buyer before a contract, how lenders treat a developer incentive under the prudential regulator's guidance, how transfer duty is assessed when the price on the contract is not the whole story, and what a seller can raise before signing anything.

Property Occupations Act 2014 as described by the REIQ (articles of 11 December 2023 and 28 May 2024) and the Office of Fair Trading.

What counts as a rebate, discount or benefit

The words overlap, and the law uses several of them together. A rebate is money returned after a payment: an agency spends $5,000 with a supplier and later receives part of it back. A discount is a lower price given up front. A commission, in this setting, is a payment from a third party for sending business its way. A benefit is the widest term and covers anything of value.

The Office of Fair Trading has been clear that a benefit need not be cash. In an article published by the REIQ in June 2020, the Office's then executive director listed reward cards and holidays alongside referral and finder's fees, and stressed that a benefit an agent only expects to receive still has to be disclosed, even if it never arrives.

For a sale, these benefits fall into three groups:

• Benefits linked to the seller's expenses. A supplier of advertising, photography, signboards or other campaign services gives the agency a rebate, a volume discount or a commission on what the seller pays for.
• Benefits linked to referrals. The agent sends a buyer or a seller to a mortgage broker, a building and pest inspector, a marketing agency or another agent, and receives something for the introduction.
• Incentives offered to a buyer. A developer or seller offers cashback at settlement, pays the buyer's transfer duty, includes a car or furniture package, or offers a rebate on the price.

Each group answers to different rules, and each is disclosed to a different person.

The seller's appointment and rebates on expenses

An agent cannot act for a seller in Queensland without a written appointment, the Form 6 for residential property. Section 104 of the Property Occupations Act 2014 lists what that appointment must contain. Alongside the commission, the fees, the timing of payments and the expenses the agent is authorised to incur, section 104(1)(c)(v) requires the appointment to state the source and the estimated amount or value of any rebate, discount, commission or benefit the agent may receive for expenses incurred in performing the service.

In plain terms, if the seller pays for a marketing campaign and a supplier on that campaign gives the agency something back, the seller must be told in the appointment who the supplier is and roughly how much the benefit is worth. The REIQ's analysis of the Form 6, written by a solicitor at Carter Newell Lawyers and updated in May 2024, lists this item among the required contents of the form.

The disclosure is an estimate, made before the campaign starts, so it will rarely be exact. What it does is put the arrangement in front of the seller at the point where the seller can still question it.

Two consequences follow from the same Act. The REIQ article notes that an appointment which does not comply with section 104 is ineffective from the time it is made, and that an agent without a valid appointment is not entitled to claim commission for the service. A missing item in the appointment is therefore not a paperwork detail: it can reach the agent's entitlement to be paid.

The REIQ also lists, among the common errors its professional indemnity solicitors see in appointments, marketing expenses that are not properly described or whose payment date is unclear. A seller who reads the expenses section carefully, and the rebate line that sits with it, is checking the part of the form most likely to be wrong.

Why a rebate is treated as a possible conflict

The reason for the rule is not that rebates are improper. Agencies buy advertising and services in volume, and suppliers price accordingly. The concern is that a rebate gives the agent a reason to recommend a bigger campaign, or a particular supplier, for reasons other than the seller's interest.

The Property Occupations Regulation 2014 deals with that risk directly. Section 18 of the Regulation bars a property agent from accepting or continuing an appointment that would place the agent's duty or interests in conflict with the client's interests. Disclosure in the Form 6 is how an arrangement with a supplier becomes something the seller has seen and accepted, rather than an interest working in the background.

This sits alongside the agent's general duty to act in the client's interest, a subject covered in its own right elsewhere in the magazine. For rebates, the practical point is narrow: the seller is entitled to know where money linked to their own spending ends up.

Referral benefits and what the buyer is shown

The second group of benefits is disclosed not to the seller but to the buyer. The Office of Fair Trading's guidance for licensees says an agent must disclose to a buyer any fees, commissions or other benefits, in money or otherwise, paid to a third party, and must use the approved form to do it. It names mortgage brokers, building or pest inspectors, marketing agencies and other real estate agents as typical third parties. The disclosure gives the full name of the third party, the relationship with the agent and the benefit involved. For a house and land package, it covers both the building contract and the land contract.

The approved form is the Form 8, the buyer disclosure form listed among the Office of Fair Trading's property forms. According to the REIQ's December 2023 article on agents' disclosure obligations, section 157 of the Property Occupations Act requires a residential agent to disclose any relationship, personal or commercial, with an entity to which the buyer is referred for professional services, and the amount, value or nature of any benefit the agent has received, receives or expects to receive. The Form 8 must be completed before the contract of sale is entered into, and the buyer acknowledges in writing that it was received. The same article puts the maximum penalty for a breach of section 157 at 200 penalty units.

The Office of Fair Trading's 2020 article gives the boundary of the rule. A referral to a business with which the agent has no relationship, and from which no benefit is expected, raises no disclosure issue. The obligation starts when there is a relationship or a reward.

These rules are about benefits that pass between the agent and third parties. The commission the seller pays the agent is set out in the seller's appointment, which is a different document with a different reader.

The table shows why a single sale can carry several disclosures. A seller sees one set of benefits, a buyer sees another, and neither form shows the other party everything.

Developer cashback and incentives for buyers

The third group is the most visible to the public. In new estates and off-the-plan projects, sellers sometimes offer buyers something on top of the home: a cash rebate at settlement, payment of the buyer's transfer duty, a furniture or appliance package, or a prize draw. A September 2020 briefing by Brisbane firm Broadley Rees Hogan Lawyers described lucky draws for vehicles, payment of the buyer's duty and price rebates as long-standing tools developers use to start a project in a crowded market or to sell the last lots of an estate.

From the buyer's side, an incentive is attractive because it reduces what the home really costs. The difficulty is that two parties outside the sale rely on the price written in the contract: the lender, which uses it to size the loan, and the Revenue Office, which uses it to assess duty. An incentive that sits outside the contract, in a side letter or a verbal promise, leaves both working from a figure that is not the real bargain.

The same law firm's advice was to record any rebate in a written condition of the contract rather than in a separate agreement. A side agreement, it noted, can cause problems for a buyer seeking finance, and a rebate that is not disclosed to the lender may amount to fraudulent conduct. The Queensland Law Society's position, as the firm summarised it, is that a lawyer whose client refuses to disclose after being advised of the risk should stop acting.

Developers are not outside the buyer disclosure rules. The Office of Fair Trading's guidance says the approved disclosure form applies to property developers who do not need a licence as well as to agents, and that a developer must also disclose to a buyer an interest of at least 15 per cent in the property.

How a lender sees a cashback

Banks and other lenders supervised by the Australian Prudential Regulation Authority are guided by its prudential practice guide on residential mortgage lending, APG 223, last updated in June 2025. Two points in the guide bear directly on incentives.

The first is about the deposit. The guide says developer discounts would not be treated as part of the borrower's deposit when the loan-to-valuation ratio is calculated. A discount lowers the price; it does not add to the buyer's own money.

The second is about the price itself. The guide notes that developer prices might not represent a sustainable resale value, and that a prudent lender would reduce off-the-plan prices when working out the ratio, or obtain an independent valuation.

A worked example shows why. Take an off-the-plan apartment with a contract price of $650,000 and a promised cashback of $20,000 at settlement, so the net cost is $630,000. These figures are illustrative. A buyer hoping to borrow 90 per cent might expect a loan of $585,000 on the contract price. A lender that bases the loan on the net figure would lend 90 per cent of $630,000, which is $567,000: $18,000 less, to be found from the buyer's own funds. A 10 per cent deposit on the contract price would be $65,000; on the net figure it is $63,000. A valuation below the contract price, a subject covered elsewhere in the magazine, can widen the gap further.

None of this means a cashback is a bad deal. It means the cashback is usually worth less to the loan than to the buyer's budget, and that the place to discover this is before signing, not at formal approval.

Transfer duty when an incentive is involved

Queensland transfer duty is charged on the dutiable value of the transaction. The Queensland Revenue Office explains that dutiable value is usually the unencumbered value of the property, generally its market value, or the consideration the buyer agrees to pay, whichever is higher. Consideration, in the Office's words, includes monetary and non-monetary payments, such as the assumption of liabilities.

Two consequences follow for incentives.

The first is that duty does not simply follow a lower net cost. Because the higher of consideration and market value applies, a cashback paid to the buyer does not automatically reduce the dutiable value. The Broadley Rees Hogan briefing put the practical position plainly: transfer duty is payable on the purchase price in the contract, disregarding the amount of the discount or rebate, and recording the rebate on the transfer papers does not remove that obligation. That is the firm's reading of the position in 2020; how a particular arrangement is assessed depends on its terms, and the Revenue Office is the authority on any given case.

The second runs the other way. Where a buyer pays something extra under a special condition of the contract, the amount can add to the consideration. The Revenue Office's public ruling DA012.1.1, on amounts a purchaser pays under a special condition in addition to the price, gives examples: a buyer who agrees to pay the seller's agent's commission, an outstanding council charge or unpaid land tax adds that amount to the consideration on which duty is assessed. Costs that do not relate to the transfer itself, such as occupation fees before settlement, are left out.

The transfer papers ask the relevant questions. The Titles Queensland Form 24, which accompanies a transfer, sets out the details of the sale price in cash, vendor terms, assumed liabilities and other consideration, and asks whether the consideration is less than the unencumbered value of the property. An incentive that is properly written into the contract can be described there; one kept off the contract cannot.

For a first home, one further check applies. The Queensland Revenue Office's eligibility page for the First Home Owner Grant says the value of a new home must be under $750,000, including land and any contract variations. The page does not say how a builder's or seller's incentive is treated in that value, so a buyer close to the cap should confirm the position with the Office before relying on it.

Gifts, prizes and the line with misleading conduct

Incentives also raise a question of accuracy. When a property is advertised with a bonus, or a price is promoted without mentioning a rebate that changes it, the risk is that buyers form a wrong idea of what comparable homes sell for. The Broadley Rees Hogan briefing warned that sellers and agents must disclose discounts and rebates so the purchase price is not misrepresented, and flagged misleading or deceptive conduct where buyers are led to a wrong belief about prices in a development.

The same logic applies to the agent's own benefits. The REIQ's 2023 article notes that silence about a material fact can amount to misleading or deceptive conduct under the Australian Consumer Law. A referral reward that is disclosed on a Form 8 is a known arrangement; one that is not is a problem waiting to surface.

Brokers and the commissions buyers do not see

Many referrals in a sale lead to a mortgage broker, and brokers have their own disclosure regime under federal law. Moneysmart, the consumer guide published by the Australian Securities and Investments Commission, explains that lenders generally pay brokers a commission for distributing their products, usually a percentage of the loan with an upfront and an ongoing component, and that brokers must give borrowers information about the commissions they may receive. Brokers must also act in the borrower's best interests when suggesting a loan.

So a buyer referred by an agent to a broker may receive two separate disclosures: the agent's Form 8, showing any benefit the agent receives for the referral, and the broker's own information about what the lender will pay the broker. Neither replaces the other.

What a seller can raise before signing

The Office of Fair Trading's guidance says commission is negotiable and that it does not set a limit on what an agent may charge. The same holds for the way expenses are structured: the appointment records whatever the seller and the agent agree, as long as it meets section 104. That leaves a seller room to ask questions and to negotiate, and the moment to do it is before the Form 6 is signed, because services cannot start until it is.

Whether a supplier's rebate is passed to the seller, kept by the agency or reflected in a lower commission is a commercial matter between the seller and the agent. The law's part is to make sure the seller knows the rebate exists and roughly what it is worth.

A buyer has a parallel checklist, shorter but just as useful: read any Form 8 handed over before signing, ask whether any recommended broker or inspector pays the agent, have any cashback or incentive written into the contract as a special condition, and tell the lender about it at the application stage. The general rule is the same on both sides. The details of a particular contract, loan or duty assessment depend on its terms, and a lawyer or the relevant authority is the place to settle them.

A rebate is lawful when it is seen. The forms exist so that money moving around a sale is known to the people paying for it, before they sign.

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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