REALUX

What is paid for a property referral?

In Italian practice a referral leading to a completed sale is paid between 10% and 25% of the commission received by the agent — not of the property price. The percentage rises with the quality of the referral: a client already decided to sell, a property already identified, a personal introduction. The fee should be agreed in writing before the introduction, and its tax treatment depends on how often you do it: an isolated referral and a continuing activity follow different rules.

What a referral is worth

10 to 15% for a simple referral: you tell an agent that someone might sell, and take no further part.

15 to 25% for a qualified referral: the client has already decided, asked you for a name, and you introduce them personally. The difference is not formal — an agent receiving someone already ready saves months of prospecting.

Above 25% you have left referral territory, and it usually signals you are doing something more, which brings back the question of the line with agency work.

The basis is always the commission the agent actually receives, not the sale price. On a two-million property at 3% commission, a referral at 20% is worth twelve hundred euros per hundred thousand of price — worth doing the arithmetic first, because the two bases produce very different numbers.

What the agreement should say

Who was referred and when

Name and date: the only thing that counts if there is later a dispute about who brought whom.

What the fee is calculated on

, namely the commission received. Worth stating, because it is the commonest misunderstanding.

When it is paid

When the agent receives the commission, normally at completion. If the agent is paid in stages, say whether the fee follows the same schedule.

How long it lasts

If the person referred does not sell immediately but sells through that agent eighteen months later, is the fee due? Twenty-four months is usual, but the rule is that it must be written.

What happens if the client buys instead of selling

, or the reverse. Referrals often produce a different transaction from the expected one.

The tax side, briefly

This is where your own accountant is needed, because it depends on your overall position. What you need in order to ask the right question is the basic distinction.

An occasional referral: one-off, unorganised, not continuing. It falls under miscellaneous income and is documented with a receipt for occasional services, subject to withholding.

A habitual activity: once referrals become a recurring source of income, occasional treatment no longer applies and VAT registration is required.

The threshold is not only an amount: frequency, organisation and regularity all count. Two referrals a year and two a month are not the same thing even at equal value.

It should also be said that the fee must reflect work genuinely done: an agreement built to dress agency work up as a referral does not hold, either with the other party or with the tax authorities.

How Realux works

Professionals who refer through Realux have a written agreement: what the referral is worth, what it is calculated on, when it is paid and how long it remains valid. It is settled before the introduction, not discussed once the deal is done.

The referral is recorded with its date, so there is no argument about who brought whom — the same reason a written agreement is worth having outside the network too.

See the adviser agreement

Frequently asked questions

Is it calculated on the property price or on the commission?
On the commission received by the agent. That is the practice, and the only defensible basis: the introducer contributed to the agent’s work, not to the value of the property. Agreements calculated on the sale price produce figures out of all proportion and are generally not honoured.
Do I need to be VAT registered to receive a referral fee?
Not for a genuinely occasional referral, documented with a receipt for occasional services. Registration is required once the activity becomes habitual, and that assessment turns on frequency and organisation rather than on a single amount. This is precisely the question to put to your accountant before agreeing terms.
If the client sells two years later, am I still owed anything?
Only if the agreement says so. Without a written period the referral lapses and there is nothing to enforce. Twenty-four months is usual, but any period works provided it is agreed beforehand.
Can I take a fee if I belong to a professional body?
It depends on your body’s conduct rules, which on fees received from third parties in relation to your own clients can be stricter than the general law. Check before, not after: some professions require at the very least that the client is told.