Residential rental agreements are now exempt from stamp duty! This applies to the “contract fee” (Vertragsgebuehr), not to the estate agent’s commission.

The exemption from stamp duty on rental agreements applies to residential leases concluded on or after 11 November 2017.

Commission or fees — aren’t they the same thing? Many people may be wondering, but the answer is a clear no. Here is why…

Contract Fees (Stamp Duty)

The contract fee is a so-called “legal transaction duty” (Rechtsgeschaeftsgebuehr). It is levied on legal transactions that are explicitly listed in the Austrian Fees Act (GebG) and for which a written document is drawn up (Section 15(1) GebG). For written legal transactions that are not listed in Section III, no legal transaction duty applies (Section 15(1) GebG). Until 11 November 2017, residential rental agreements were included in that section.

Agent’s Commission

As the name suggests, the agent’s commission is a success-based fee for services rendered. That sounds reasonable enough, but what does it actually mean? What services does an estate agent provide?

An estate agent’s responsibilities range from the initial consultation and marketing the property all the way through to handing over the keys to the new buyer or tenant.

The agent therefore supports both the seller/landlord and the buyer/tenant from the first consultation to the key handover — and often well beyond. The path to a successful contract is lined with milestones, many of which involve considerable time, effort, and expense for the agent. These are costs that the agent typically bears upfront.

Below are some of the key tasks an agent performs:

• Market analysis
• Preparation of rental or sale documentation (e.g., energy performance certificate) or a property expose
• Advertising properties on online portals and through other marketing channels
• Conducting negotiations
• Organising and carrying out property viewings
• Preparing purchase or rental contracts
• Property handover and creation/signing of the handover protocol

In summary, the abolition of stamp duty on rental agreements eliminates a cost that could not be attributed to any direct service — a welcome relief for tenants across Austria.