Real Estate Commission Rebates

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A real estate commission rebate, or cashback rebate, is a cash incentive that a real estate agent provides to a home buyer. Buyers generally do not pay real estate agent commissions as buyer agents are normally paid by the home seller, and some real estate agents are willing to give part of their commission to home buyers. Rebates vary but can generally vary from a few hundred to thousands of dollars, depending on the price of the property. Details about an agent’s cash back rebate can be found in the Buyer’s Representation Agreement (BRA) and are typically paid to the buyer a few weeks after closing.

What is a commission or cashback rebate?

A commission rebate is a cash incentive paid to home buyers after the closing of a transaction. Real estate commissions are fees paid to real estate agents for the services they provide in assisting with buying and selling a home. Real estate agents on both sides of a home transaction are usually paid for by the seller, and some agents are willing to offer the home buyer part of their commission as a cashback rebate.

How much can I get with a cashback agent?

The amount of cashback that an agent provides to a home buyer is determined by the agent and can vary based on the total commission or price of the property. Some agents will give a percentage cash back (typically between 10-50% of the real estate commission amount), while other agents may choose to give a fixed-amount back to the buyer (typically between $1,000-$20,000).

How much can I save with a 30% cashback rebate?

ProvinceProperty PriceCash Back Rebate
Ontario$500K$3,750
BC (GVA)$500K$2,888
Alberta$500K$2,850
Saskatchewan$500K$2,850
Quebec$500K$3,750
Manitoba$500K$3,750

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Benefits of a Cashback Rebate

For a home buyer, a cash back rebate means saving thousands of dollars on real estate commissions that can help you settle into your new home. How you use the additional cash is up to you. Some ways the additional cash can help a home buyer include:

  • Purchase new furniture
  • Pay for moving expenses
  • Increase your savings
  • Pay for renovations and home improvement projects
  • Reimburse you for the closing costs you paid, such as land transfer tax

Why would a real estate agent offer a rebate/cash back?

Buyer agents are willing to offer you the rebate because it helps them:

  • Speed up the closing process
  • Increase the volume of transactions they complete each year
  • Build their reputation with clients through a unique value proposition
  • Increase their reputation by word-of-mouth with their client’s network

How do I ask a real estate agent for a rebate/cash back?

The best way to ask if an agent offers a cash back rebate is to contact many agents before you start the process of looking to purchase a home. Be upfront and honest with the agents when you first contact them by stating your intentions of looking for an agent who will provide cash back. We suggest you contact between 5-15 agents. After you find a few agents willing to provide a cash back rebate, choose the agent who you think you will work best with based on their personality, skills, and experience.

Some real estate agents will advertise their services with a cash back rebate. On WOWA, you can find cash back real estate agents and look up how much they are willing to provide to you in cash back.

When will I get a cashback or real estate rebate?

You will typically receive a cash back rebate a few weeks after closing.

How do I find out the details of my cashback rebate?

After you choose a real estate agent to work with, you will be required to sign the Buyer’s Representation Agreement. The Buyer’s Representation Agreement (BRA) is a contract between you and your agent which states that you will work exclusively with your agent for an agreed-upon duration of time. You can expect to find the details of your cash back rebate in the BRA, including when you will get the cash back rebate, the amount of the rebate stated in writing, and what method your cash back rebate will be paid through (such as cheque or electronic fund transfer). Ensure that you carefully read through the agreement and all terms are written as discussed with your real estate agent prior to signing.

Tax Implications of Real Estate Agent Commission Rebates

A real estate agent commission rebate can have future tax implications on capital gains when you sell your home.

If you sell your home in the future for a higher price than what you originally paid for it, you will incur capital gains tax. More specifically, the capital gains tax is calculated based on the difference between the proceeds of disposition and adjusted cost base (ACB). The adjusted cost base for real estate includes the purchase price of the property, closing costs, real estate commission, and any capital expenditures on the property. If you receive a cash back rebate, this will be deducted from the adjusted cost base as it will decrease the total amount of costs you spent on buying the property, which can increase your capital gains when you sell your home. However, if you are buying the home as your primary residence, you will generally not be subject to any capital gains taxes.