CONFIRMED: Austria to scrap broker's fee on apartment rentals in 2023

Amanda Previdelli
Amanda Previdelli - [email protected] • 19 Dec, 2022 Updated Mon 19 Dec 2022 14:08 CEST
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A high-rise apartment block in Vienna. Photo by Dimitry Anikin on Unsplash

From July 1st 2023, the brokerage fee, also known as Provision in Austria, will be paid by those who hire real estate agencies. Here's what you need to know.

The Austrian People's Party (ÖVP) and the Greens have now agreed on the reform of estate agent fees that had been announced earlier this year. 

From July 1, 2023, the Bestellerprinzip (buyer's principle) will apply to apartment rentals, as Justice Minister Alma Zadic (Greens) and Youth State Secretary Claudia Plakolm (ÖVP) announced on Sunday.

The reform was first announced in March this year, though there were no specific dates yet. Austria's government had said it would introduce the "buyer's principle" for renting homes, meaning those who hire a broker will pay for the service, as The Local reported at the time. 

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 find the apartment online, for example. Once a broker acts as an intermediate, the renter pays the fee even if the property owner hires them.

That is set to change on July 1st 2023.

READ MORE: Reader question: Could Austria scrap the broker’s fee on apartment rentals?

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

Rules for 'Provision' payments to be changed in July

From July 1st, 2023, the Bestellerprinzip (buyer's principle) will apply to apartment rentals. The brokerage fee will have to be paid by whoever hired the service.

READ MORE: Renting in Austria: How much can the landlord ask for as a deposit?

"In doing so, we are cleaning up an injustice that has been going on for decades. As everywhere else, the same applies to renting: those who hire the service also pay for it. Thus, we relieve all apartment seekers who would have previously paid high broker commissions," said Zadic.

According to a press release, the now agreed draft law provides for "comprehensive and strict protection against circumvention". 

The law won't allow any extra payments to be made that could be used instead of the brokerage commission. In addition, an administrative penalty may be imposed in the event of violations.

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Amanda Previdelli 2022/12/19 14:08

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