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💸 Escaping the Spinach Tax: Why Earning More Isn’t Enough

Exploring how top agents can escape the "spinach tax" and turn income into freedom.

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GOOD MORNING FROM ELITE AGENT

In 1928, a small bakery in Missouri sold pre-sliced bread for the very first time. It sounds trivial now, but at the time, it was revolutionary. It changed how people consumed one of the world’s oldest staples because someone dared to ask, “Could this be done better?”

The message for our industry is this: don’t settle for what’s always been done. Whether it’s automating part of your process, using AI to analyse your database, or rethinking how you present to vendors, consistent innovation, even in small ways, can become your biggest differentiator.

Today’s read time: 6 minutes, 09 seconds

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FINANCE

Why most agents only keep 23% of their income … and how to fix it

Founder of Area Specialist, Michael Choi. Image: Supplied

The “Spinach Tax”: the hidden cost eating away at agent incomes

The "spinach tax," as Michael Choi, founder of Area Specialist, describes it, is the harsh reality many real estate agents face, earning impressive GCI figures, only to see the majority of it disappear through fees, expenses, and tax. While agents work tirelessly to hit targets and stay on the leaderboard, the actual income they keep is often just a fraction of what they earn. His message is simple: it’s not just about earning more, it’s about building a smarter financial structure that allows you to keep more, invest better, and achieve financial freedom sooner.

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Shrinking GCI and the Spinach analogy

Even million-dollar agents can end up with less than a quarter of their income after GST, franchise fees, team salaries, office splits, and tax are deducted. Michael compares this to spinach in a pan, big when raw, but shrinking down to a small portion once the heat hits. Without smart planning, agents are left with an income that looks good on paper but doesn’t translate to real wealth.

From active income to passive wealth

Michael advises agents to stop focusing purely on commissions and start thinking like investors. By using property strategies like renovating, subdividing, building rent-rolls, or adding granny flats, agents can turn active income into long-term assets that grow over time and generate ongoing revenue, without relying solely on sales.

Structuring for retention and growth

Beyond property, financial freedom also comes down to the right tax structures. Michael outlines how tools like family trusts, bucket companies, SMSFs, and company ownership can help agents retain more of what they earn, reduce tax liabilities, and boost borrowing power. It’s not just about working harder, it’s about working smarter, and using every legal and strategic advantage available.

ICYMI, last week we reported on a $55M deal that elevated one agent’s career.

BUYER BEHAVIOUR

Auckland leads the way in spontaneous property purchases. Image: Getty

Oops they bought it again: one in four Kiwis snap up homes on a whim

A new survey has found that 24 per cent of New Zealanders have purchased a home without intending to. and 8 per cent did so in the past year alone. The trend, described as “accidental purchases,” is most common among high-earning males aged around 30, with Auckland leading the way. Those who bought impulsively reported incomes 54 per cent above the national average.

FIRST HOME FINANCE

First home buyers are being warned about the genuine savings rule. Photo: Getty

First home buyers tripped by 'genuine' savings

Real estate agents working with first-home buyers may need to offer an extra layer of guidance, as more buyers are seeing their mortgage applications rejected over a strict and often misunderstood lending condition. Many lenders require that at least 5 per cent of the deposit be held as “genuine savings”, meaning the funds must remain in the same account, untouched, for a minimum of three consecutive months. Even a short-term withdrawal, such as transferring money to help a family member or moving funds between accounts, can reset the clock, forcing buyers to wait another three months to qualify.

FURRY FRIENDS WELCOME

Pet-friendly rentals, lease our faster. Photo: Getty

Pet-friendly rentals find tenants a week faster

Landlords in the US who welcome furry friends are seeing their properties snapped up eight days faster than those with no-pet policies, according to Zillow. Pet-friendly listings receive 9% more views and are shared 11% more often on the platform. With nearly 58% of renters now owning pets, up from 46% pre-pandemic, a pet-friendly rental is in high demand. In New York City, the difference is even more dramatic, with pet-friendly units renting 26 days faster than their pet-prohibiting counterparts.

CELEBRITY HOMES

Features include ornate ceilings, preserved fireplaces, and timber floors. Image: realestate.com.au

Sailing star lists North Sydney stunner with 50 buyers hooked on day one

Sydney to Hobart skipper Andrew Butler and his wife Amber have just listed their fully renovated North Sydney home, and it’s already turning heads. The five-bedroom terrace at 4 Neutral Street hit the market this week with a $4.1 million guide and drew 50 enquiries on the very first day.

MOVERS + SHAKERS

Jane Cohen. Photo Supplied

Jane Cohen joins REA Group as Chief Strategy Officer.

The strategist brings over 25 years of experience to the Executive Leadership Team where she'll drive long-term growth and innovation initiatives. More here.

Ty Zink. Photo Supplied

Ty Zink takes ownership of Ray White Caves Beach.

The local real estate professional brings a decade of Lake Macquarie experience to the role as he steps in as sole director of the five-staff operation. More here.

Harcourts Adelaide City. Photo: Supplied

Simon Hou launches Harcourts Adelaide City.

The multicultural team specialises in CBD apartment sales and brings 16 years of experience to the globally recognised brand. More here.

Success doesn’t rest on weekends! 
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AGENTS ON SOCIAL

You face 6am calls, 9pm texts, and buyers who ghost. Fear left the building long ago 🏡💼

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Wishing you a productive day!

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