Are Broker Commission Rebates Legal in New York?

The short answer is yes. The long answer is yes and your rebate will be completely tax free.


Not only are commission rebates completely legal, New York’s Attorney General actively encourages home buyers to work with brokers who offer rebates, stating that “rebating by real estate brokers can greatly reduce the costs of buying and selling property and even facilitate new and innovative business models.” 


The Attorney General went on to call rebates “procompetitive and good for consumers,” noting that the “widespread use of sophisticated real-estate search websites” allows “clients to do more of their own legwork when searching for properties.” We’ve found that most of our clients have been using sites like StreetEasy and Zillow for years, which has transformed the role of a broker into more of a strategic advisor and subject matter area expert rather than someone who merely provides access to real estate listings or takes their clients around to open houses.


If you thought getting a cash rebate couldn’t be any better, the IRS has stated that rebates buyers receive are completely tax free. The IRS treats rebates as an adjustment to the overall purchase price of the home rather than taxable income. That said, we’re not tax experts so consult your tax advisor on these issues.


BRN was created in the wake of the Attorney General’s letter to provide our clients with a more competitive, smarter alternative to the more traditional brokerages. We offer our clients up to a 2% cash back commission rebate at closing. Reach out to us and we’ll walk you through how the process works and get you started.

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