Realtor Commission Calculator with VAT
This is a variant of the realtor commission calculator which also adds value added tax to the commission (but only to the commission, we assume that the house price is not a subject to VAT). Also, it appears that in most cases the commission is only taken from the selling party. We know there are exceptions, and if you'd like us to cover another case, we'll happily build a calculator for you. Just contact us. You can find our details at the bottom of the page.
How do I add VAT to the realtor commission?
You can compute the amount of VAT that needs to be added to the real estate commission as the product of the net commission and the VAT rate in your country. Remember, the net commission is just the property price multiplied by the commission rate.
How do I calculate the realtor commission with VAT?
To determine the realtor commission with VAT (the gross fee), follow these steps:
- Write down the property
price, the realtor commission
C, and the VAT rate
- Compute the net realtor commission as
net fee = price × C.
- Compute the VAT for the commission as
VAT = net fee × V.
- You find the gross realtor commission as
gross fee = net fee + VAT.
Let us rewrite this procedure as one neat mathematical formula.
What is the formula for the realtor fee with VAT?
The gross realtor commission formula is the following:
gross realtor commission = price × C × (1 + V),
priceis the property price;
Cis the commission rate; and
Vis the VAT rate.
Example of adding VAT to the real estate commission
Imagine the house sells for
€100000 and a realtor is an intermediary in the transaction. The Realtor's commission is
3%, and a
23% VAT rate applies. The net commission is
€3000, which becomes
€3000 + (€3000 × 0.23) = €3690 gross. So the total the owner of the house receives is
€100000 - €3690 = €96310.
What is the 3% realtor commission with 10% VAT added?
The answer is 3.3% of the property price. To get this answer, we use the formula for gross realtor commission:
gross realtor commission = price × C × (1 + V). Plugging in numbers, we get
gross realtor commission = price × 0.03 × (1 + 0.1) = price × 0.033 and
0.033 = 3.3%, as claimed.