Government to clamp down on real estate agent fees
Luxembourg is seeking to put an end to excessive brokers' fees on property sales, Economy Minister Franz Fayot said on Sunday, announcing the government's latest effort to clamp down on the overheating real estate market.
Currently home sellers pay a fixed 3% fee of the sales value of the property to their real estate agent, but the government suspects they simply pass on that charge to the buyer by raising property prices, Fayot said in an interview with broadcaster RTL on Sunday.
"For me that is a de-regulation, a dysfunction of the market", Fayot said. He wants to draft a regulation - an executive decision that does not need parliamentary approval - to "slow down" commissions, but needs to check if the measure is legal, he added.
The move is a reaction to Luxembourg's rising property prices which have more than doubled in the past decade - the second-fastest rate in the European Union, leaving many unable to afford a home.
Affordable housing is a concern for the vast majority of Luxembourgers, with 82% of voters saying that they were "greatly worried" about access to affordable housing, a poll released in November found.
Steep housing prices have pushed thousands to move to neighbouring Germany, France and Belgium for cheaper properties.
Fayot's announcement is the latest episode in the government's fight against ballooning prices. A pair of draft bills announced in January includes 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 around the Grand Duchy, as well as people applying for available slots.
Reining in agent fees could be bad news though for real estate agents who have flocked to the country in recent years.
Almost 400 new agencies set up shop in Luxembourg at the end of last year - a 33% rise compared to 2020, data from the economy ministry showed. In 2019 there were already 1,221 real estate agencies, the figures showed.