Is the refund taxable?
In a nutshell:
No, the refund is not taxable. The IRS has ruled that commission refunds do not need to be reported as income, and therefore, is not taxable. You can review their edict below:
"In the present case, a payment or credit at closing from Taxpayer represents an adjustment to the purchase price of the home and generally is not includible in a purchaser’s gross income."
That said, we suggest consulting with a CPA or other tax professional if you have questions.
Want to learn more?
If you would like to learn more about homebuyer commission refunds, we encourage you to check out the US Department of Justice’s informative overview of the practice.