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RENTING

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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MONEY

Bread, butter and veggies: The items getting more expensive in Austria

The purchase price of flour has risen by around 70 percent, which means the cost of bread, cakes and pastries in Austria are set to rise, alongside steep increases for fresh and canned vegetables. Here's what you need to know.

Bread, butter and veggies: The items getting more expensive in Austria

The war in Ukraine and a ban on the export of wheat in India is driving up the cost of wheat flour around the world, with bakers in Austria warning they have no choice but to raise prices.

According to the Chamber of Commerce, there is also a paper shortage for packaging that is used for most baked goods, adding to further pressure on bakers.

Reinhard Honeder, Chairman of Bakers for the Chamber of Commerce, told ORF: “I believe that every colleague must raise their prices if they have not already done so.”

READ ALSO: The essential products that are getting more expensive in Austria

However, the rising cost of wheat flour is not expected to hit Austria as hard as other countries because Austria is “self-sufficient” when it comes to wheat, due to domestic agriculture capabilities.

Honeder says Austria has enough wheat to feed the population and believes this should stop baked goods from becoming unaffordable. 

In Upper Austria, there are around 288,000 hectares of arable land and wheat is currently grown on almost 46,000 hectares, according to Agrarmarkt Austria.

However, global wheat production is forecast to be 774.8 million tonnes for 2022/2023, which is 4.5 million tonnes less than in 2021/2022.

Farmers are also being hit with rising costs for fertiliser and machinery, leading to ongoing increases in the global price of grain.

FOR MEMBERS: Cost of living: 45 ways to save money in Austria

The cost of groceries (Lebensmittel) also on the rise in Austria

Bread isn’t the only staple food product that is becoming more expensive in Austria.

Der Standard reports that the cost of a bell pepper (Paprika), butter and tinned tomatoes are also rising sharply. 

When comparing prices from April 2021 and May 2022, one red pepper (from Austria) is up by 67 percent to €1.49, a 250g pack of Clever butter is 79 percent more at €2.49, and a can of Clever chopped tomatoes costs 20 percent more at €0.47. 

Inflation has been rising in Austria for the past year and hit 7.2 percent in April – the highest rate in Austria since October 1981 when the Gulf War led to an increase in oil prices.

The cost of food is a big driver in the rise in inflation with the average weekly shopping basket costing 14 percent more than last year, according to Statistics Austria.

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