How the numbers work: selling a home

How commission is structured

1. Illustrative structure: 4% on first $300,000, 2% on balance, plus GST
2. Sale price: $850,000
3. First $300,000 x 4% = $12,000
4. Remaining $550,000 x 2% = $11,000
5. Base commission: $12,000 + $11,000 = $23,000

Plus GST: $23,000 x 1.15 = $26,450

🔢 Worked examples

1. First $300,000 x 4% = $12,000
2. Remaining $550,000 x 2% = $11,000
3. Base commission: $23,000
4. Plus GST: $23,000 x 1.15 = $26,450
5. Marketing (illustrative): $2,500

Total selling cost: $28,950

🔢 Worked examples

1. Portal listing (illustrative): $1,200
2. Photography: $500
3. Signage and sundries: $300

Total selling cost: $2,000

🔢 Worked examples

1. First $300,000 x 4% = $12,000
2. Remaining $900,000 x 2% = $18,000
3. Base commission: $30,000
4. Plus GST: $30,000 x 1.15 = $34,500
5. Marketing (illustrative): $3,000

Total selling cost: $37,500

🔢 Worked examples

1. Portal listing (illustrative): $1,400
2. Photography: $600
3. Signage and sundries: $300

Total selling cost: $2,300

1. First $300,000 x 4% = $12,000
2. Remaining $300,000 x 2% = $6,000
3. Base commission: $18,000
4. Plus GST: $18,000 x 1.15 = $20,700
5. Marketing (illustrative): $2,000

Total selling cost: $22,700

1. Portal listing (illustrative): $900
2. Photography: $450
3. Signage and sundries: $250

Total selling cost: $1,600

1. First $300,000 x 4% = $12,000
2. Remaining $580,000 x 2% = $11,600
3. Base commission: $23,600
4. Plus GST: $23,600 x 1.15 = $27,140
5. Marketing (illustrative): $2,500
6. Total selling cost: $29,640

Net to the Coopers: $880,000 - $29,640 = $850,360

🔢 Worked New Zealand examples

1. Items sold: her own used personal possessions
2. Purpose: decluttering, no intention to make a profit
3. She paid more for most items new than she sold them for

Taxable income: $0. This is a private sale of personal items.

🔢 Worked New Zealand examples

1. Sales (turnover): $28,000
2. Cost of sneakers: -$18,000
3. Fees and postage: -$2,000

Taxable profit: $8,000

🔢 Worked New Zealand examples

1. Sam's salary of $55,000 already sits in the 30% band
2. The $8,000 profit stacks on top at 30%
3. $8,000 × 30% = $2,400

Extra tax to pay: about $2,400

1. Sales: $65,000
2. Expenses: -$28,000
3. Taxable profit: $37,000
4. Tax: $15,600 × 10.5% = $1,638
5. plus ($37,000 - $15,600) × 17.5% = $3,745

Income tax: about $5,383

1. Items sold: his own car and household possessions
2. Purpose: he is leaving the country, not trading
3. He owned and used these items himself

Taxable income: $0. These are private sales of personal assets.

What This Means for You

1. Do all due diligence before the auction: finance, building report, LIM
2. Confirm your finance is fully approved, not just pre-approved
3. Set a firm maximum price and stick to it
4. If you win, you are committed unconditionally on the spot

📈 The Costs That Catch People Out

1. Break cost on a fixed mortgage, set by your lender on the day
2. Marketing payable even if the property does not sell
3. Tax under the bright-line rules if you sell inside the period
4. Carrying costs if the property takes longer to sell than planned

🔄 Sell First or Buy First

1. Sell first: you know exactly what you have to spend
2. But you may have to move out before you have somewhere to go
3. Buy first: you know exactly where you are going
4. But you are committed to a purchase before you know your sale price

How Commission Works

1. Sale price: $800,000
2. Commission rate: 3.5%
3. Base commission: $800,000 × 0.035 = $28,000
4. Plus GST: $28,000 × 1.15 = $32,200
5. Net to seller: $800,000 - $32,200 = $767,800