Landlords will not be able to pass brokerage fees to tenants in Austria’s Vorarlberg

This can save would-be renters up to two months in rent and make moving into a new home much more affordable

Last week, the Austrian federal state of Vorarlberg announced new regulations that aim to make rental housing more affordable. The new laws will forbid landlords and real estate brokers from passing on fees to renters, making moving to a new home easier and significantly cheaper.

The changes will apply from 1 July 2023 and will make landlords have to pay brokers separately from any rental agreements. Additionally, authorities say that the law will not leave any room for backdoor fees to pass brokerage fees to tenants through other costs.

This could save up to two months in rent and make it significantly easier for people to change apartments. Moreover, according to an official statement, the policy will benefit first-time renters, who are often young people without savings.

Passing it on to renters  

The idea for the new law is quite simple: whoever commissioned the broker has to pay the fee. Until now, would-be tenants had to pay brokerage fees of up to two months' rent even if the landlord was the one who commissioned the real estate agent.

Additionally, the law should also close back-door mechanisms for passing the costs onto tenants through maintenance fees or any other deductibles. This would make renting a home a much easier operation than before.

According to a spokeswoman for the Green Party, Nina Tomaselli, this would add around 55 million euros in spending power if it were to be applied to the whole of Austria. However, it also has the potential to hamper the realtor sector.

Experts see a potential increase in the private deals between landlords and tenants, without brokers, due to the rise in costs for landlords. This would, in turn, shift the industry more towards real estate sales. However, the landlords might flat-out increase rents, which would put the affordability contribution into question.