Government cracks down on real estate agent fees

Government cracks down on real estate agent fees

Lodging

Agents’ fees have contributed to soaring property prices in Luxembourg, Economy Minister Franz Fayot said in an interview

Agents’ fees have contributed to soaring property prices in Luxembourg, Economy Minister Franz Fayot said in an interview

Housing prices continue to rise in Luxembourg

Photo credit: Chris Karaba

Luxembourg is seeking to end brokers’ excessive fees on property sales, Economy Minister Francois Fayot said on Sunday, announcing the government’s latest efforts to rein in the overheating property market.

Currently, home sellers pay a fixed fee of 3% of the sale value of the property to their estate agent, but the government suspects they are simply passing this fee on to the buyer by driving up property prices, Fayot said in an interview with the RTL channel on Sunday. .

“For me, it’s deregulation, market failure,” Fayot said. He wants to draft a regulation – an executive decision that does not need parliamentary approval – to “slow down” the commissions, but must check whether the measure is legal, he added.

The move is a reaction to rising property prices in Luxembourg, which have more than doubled over the past decade – the second fastest rate in the European Union, leaving many people unable to afford housing. House.

Affordable housing is a concern for the vast majority of Luxembourgers, with 82% of voters saying they are “very worried” about access to affordable housing, according to a poll published in November.

High housing prices have prompted thousands of people to move to neighboring Germany, France and Belgium for cheaper properties.

Fayot’s announcement is the latest episode in the government’s fight against soaring prices. A pair of bills announced in January include one that aims to get the state more involved in building government-supported affordable housing. The measure would create a register of affordable housing scattered across the Grand Duchy, as well as people applying for available housing.

Limiting agent fees, however, could be bad news for estate agents who have flocked to the country in recent years.

Nearly 400 new agencies set up in Luxembourg at the end of last year, an increase of 33% compared to 2020, according to data from the Ministry of the Economy. In 2019, there were already 1,221 real estate agencies, according to figures.


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