SUNBIZ

Knowing More About The Real Estate Agents

What is a real estate agent for tax purpose? A real estate agent includes a person who acts or holds himself or herself out to the public as ready to
30 Apr 2016 10:00
Knowing More About The Real Estate Agents
Fiji Revenue And Customs Authority chief executive VISVANATH DAS

What is a real estate agent for tax purpose?

A real estate agent includes a person who acts or holds himself or herself out to the public as ready to act for reward as an agent in respect of the sale or other disposition of land or business, either with or without any interest in land, or the purchase or other acquisition of land or business, either with or without any interest in land, or in respect of the leasing and letting of land or business, whether or not the person carries on any other business.

A real estate agent can act as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy.

An estate agent includes a person or organisation whose business is to market real estate on behalf of clients. Normally in Fiji, a licensed real estate agent (LREA) is given the full right and power to sell the property within a designated time.  The LREA would market the property in whatever way it feels right and arranges for viewing (entering the property and showing around) at its own time (convenient to the vendor).

Within this time frame the seller does not have any right to sell the property on its own or by any other agent; and the exclusive right to sell is given to this particular agent.  A stamp duty of $50 is levied on such appointments and the payer is the vendor.

What are FRCA’s plans on the real estate?

The Real Estate industry is major player in property and land dealings and we are anticipating a boost in tax collections due to the following reasons:

l Increase in property values

l Increase in property sales

l The new Government Policy on land for non-Fiji Citizens that have acquired land and have not constructed on it.

For Real Estate Agents that collect rent, our inspectors will be conducting checks and verification to see that the Rental Income Reporting System is adhered to. There are so many former Fiji residents who are now residing elsewhere, but still deriving income from properties on rent. These are collected by the Real Estate Agents on behalf of the owners. Income Tax and VAT, where it is correctly due, have to be paid by the Real Estate Agents.

What are the requirements for local investors?

All Real Estate Agents are required to be registered with the Real Estate Agents Board.  They will have to have a license and will be required to be registered for tax purpose.

With FRCA, a person is deemed to be a real estate agent if the person acts, or holds himself or herself out to the public as ready to act, for reward as an agent in respect of the sale or other disposition of land or business (either with or without any interest in land) or the purchase or other acquisition of land or of business (either with or without any interest in  land), or in respect of the leasing and letting of land, whether or not the person carries on any other business.

Tax i.e. Capital Gains Tax, Stamp Duty, VAT and Income Tax should be payable where applicable and FRCA will be vigilant in these tax areas.

What are the requirements for international investors?

The requirement for international investor for a Real Estate License is the same of that of a local; however, we would like to stress the importance of the Rental Income Reporting System for any person that is involved in the real estate industry. On the same token International Real Estate Agents, who deal in properties situated in Fiji, are also deriving Income from sources in Fiji. Commissions payable to these Agents are subject to 15% Withholding Tax. In these cases, owners who are engaging Agents are responsible to provide details, as required for Capital Gains Tax purposes, for disclosure of Commissions paid or payable to Agents.

How many licenses do you record in a year on new real estate businesses?

The licenses is issued by the Real Estate Agents Board, however, at FRCA we register the respective real estate business for Income Tax and VAT purpose.

Are real estate agents required to by law to declare their business dealings with their landlord?

Yes, a real estate agent must declare an annual Rental Income Reporting Return as stipulated under Section 107 of the new Income Tax Act.  A real estate agent must file a report for a tax year by the last day of February after the end of the tax year.  If two or more persons carry on business jointly as real estate agents, each of those persons is treated as a real estate agent.

Fiji Sun Instagram
Fiji Plus
Subscribe-to-Newspaper