Renting: Austria to scrap brokerage fees from 2023

The Austrian government announced it would introduce the "buyer's principle'' for renting homes: those who hire a broker pay for the service.

buildings and skyline of Vienna
Vienna's renters to get some relief after new rental law. (Photo by Dimitry Anikin on Unsplash)

Austria has announced it will change its rental rules from 2023, removing the need for tenants to pay for brokerage fees, Justice Minister Alma Zadic (Greens) announced on Tuesday

Currently, renters need to pay several fees when moving into a new apartment, including a security deposit and the first month’s rent.

Unless the property is rented “privately” by the owner without the brokerage firm intermediate, one of those fees includes the so-called ‘Provision‘, a brokerage fee paid by the tenant equivalent to two-months rent.

Tenants must pay that fee even if they found the apartment online, for example. Once a broker acts as an intermediate, even if they were hired by the property owner, the renter pays the fee. That is set to change in 2023.

READ ALSO: Renting in Austria: When can my landlord increase the rent, and by how much?

‘Buyer’s principle’

The federal government has announced that the person who commissions the real estate broker should also pay the fee in the future. Austria estimates that about €50 million a year, which tenants pay, will be at the landlord’s expense.

“It is a great injustice to pay for a service that you have not commissioned yourself’, ” minister Zadic said at the press conference. She added that the cost represents a significant financial challenge, especially for low-income families and students.

A draft law should be reviewed this Wednesday, March 23rd, and a six-month transitional period is provided. The new law should be valid by the end of 2022 or the beginning of 2023.

The minister added that there is no assumption that landlords would add the costs to rent.

She mentioned a similar law introduced in Germany, and rents have not risen due to it.

READ ALSO: The words you need to know before renting a flat in Austria

Useful vocabulary
Mieter – tenant or renter
Mietvertrag – rental contract
Kaution – security deposit
Betriebskosten – the extra costs associated with the apartment other than rent, such as water, and gas
Provision – the brokerage fee

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Austria looking to cut energy bills in old residential buildings

The Austrian government is planning to reduce gas bills for people who rent Altbau apartments, one of the measures to cushion rising prices.

Austria looking to cut energy bills in old residential buildings

Austria has plans to reduce gas bills for people renting an Altbau, or old buildings, which often fall under rent control laws.

Justice Minister Alma Zadic (Greens) is looking into how a price reduction for gas heating could be implemented after the idea was floated by Vice Chancellor Werner Kogler (Greens), broadcaster ORF reported.

READ ALSO: ENERGY CRISIS: Will Austria have enough gas for winter?

“The tenants get a high bill but have zero leeway to change their heating system themselves,” Kogler told Austrian media.

Austria’s ÖVP leading party said there is “no ban on thinking” and any idea should be debated and evaluated.

The old residential apartments have a central heating system and tenants cannot adjust it themselves. At the same time, Kogler wants to create incentives for apartment building owners and landlords to convert to renewable heating systems.

Opposition parties divided

The SPÖ is in favour of the measures, while right-wing FPÖ says they make “tenancy law even more confusing”.

Unsurprisingly, the landowners’ association (ÖHGB) said they saw Kogler’s proposal as impractical populism. Furthermore, they complain that changing the heating source is not an easy matter in Austria, where many options, such as heat pumps or district heating, are not available everywhere.

READ ALSO: Where are energy prices going up (again) in Austria?

There are currently around 250,000 apartments in Altbau buildings, most of them in the capital Vienna, and heated with gas.

Rising energy prices

The costs of gas (and electricity) are increasing in Austria, as The Local reported. State-run distributors EVN and Wien Energie announced earlier this month that prices were set to go up as of September.

In Lower Austria, around 50 percent of EVN consumers should expect to pay at least €100 more monthly. The hike will affect those on a “classic tariff”.

READ ALSO: Five of the biggest challenges facing Austria right now

At Wien Energie, electricity prices will go up by €36 a month (based on an annual consumption of 2,000 kWh), and gas prices will increase by €60 a month (based on 8,000 kWh). However, those with a price guarantee or floating tariff will not be affected.

Austria is looking to cushion the increasing costs for its population and is working on an electricity price cap. Earlier this year, the government sent out €150 energy vouchers people could use to get a discount on their yearly energy bills.

Regionally, similar measures have already been taken, especially in Lower Austria, where a €250 million funding plan was recently announced.

Vienna has announced an extensive package with one-off payments of €200 and structural measures that will benefit more than one million residents in the Austrian capital, as The Local reported.