Austrian National Council Ends Brokerage Fees

CompaniesRetail & Consumer ♦ Published: February 28, 2023; 23:21 ♦ (Vindobona)

A long debate will end on Wednesday as the Austrian national council will end the fee for brokers in the real estate market. Until now, new tenants used to pay the brokerage fee when they moved into their new apartment. The situation has changed now.

The Brokerage Commissions Will Not be Paid by the Tennant in Austria Anymore / Picture: © Wikimedia Commons; Ogre, CC BY 3.0

After years of discussion, the brokerage fee is being redefined. Previously, the tenant had to pay the fee, but in the future, the customer principle will apply. This means that if landlords use a broker, they will also have to pay for it. The National Council is now passing a resolution to this effect, according to ORF.

As early as 2010, the brokerage commissions charged to the tenant in Austria were capped by law at two gross monthly rents plus VAT if the rental agreement lasts longer than three years or is of unlimited duration. For existing leases of less than three years, the brokerage commission for the tenant was even limited to one month's rent. Before this, commissions of three gross monthly rents were permissible. Brokers are still allowed to collect commissions from landlords and tenants in parallel for a successful brokerage, but often the tenant alone is charged the commission.

The logical continuation in terms of affordable housing would now be the introduction of the customer principle in Austria, according to domestic politicians. The proposal for this has been in the parliamentary subcommittee since 2015. The then Chancellor Kern had taken it out of the drawer again in 2017 and included the buyer principle in his "Plan A", as part of a 7-point plan for affordable housing. According to Kern, housing is currently the biggest cost driver in the cost of living.

In a joint press conference with the Minister of Justice Alma Zadic on Tuesday 23 March 2022 announced that the government partners have agreed on the customer principle. This is to come into force in July 2023. Now, whoever hires the broker should also pay him. The respective other parties cannot be obligated to pay a broker's commission.