Estate agent fees for rental and sale – what applies to landlords?

Since 01.06.2015, the so-called ordering party principle applies to rental properties in Germany: the person who hires the estate agent pays the commission. Landlords can no longer pass on estate agent fees to prospective tenants. A commission can only be charged if the tenant explicitly and in writing commissions the estate agent and the property is brokered exclusively through this order (§ 2 para. 1a Housing Brokerage Act).

Estate agent fees when buying property

This principle initially did not apply to property purchases. The amount and distribution of the estate agent's commission were long determined by regional customs or individual agreements. In some regions, the buyer paid the full commission, while in others it was shared.

Legal reform since 2020

On 12.06.2020, the Law on the Distribution of Estate Agent Costs in Purchase Contracts came into force. It stipulates:

• Buyers of single-family houses or flats may bear a maximum of 50% of the estate agent costs if they are acting as consumers.
• If only one party commissions the estate agent, they must pay.
• Cost sharing is possible, but the amount passed on to the buyer may not exceed half.
• If both buyer and seller jointly commission the estate agent, a 50% commission is mandatory.

Exceptions and implications

This regulation does not apply to commercial properties, multi-family houses, or building plots, and not if the buyer is acting commercially.

The new regulation aims to create more fairness and transparency. At the same time, estate agent commissions are expected to tend to decrease, as sellers will now more often negotiate the amount.

Significance for the tax return

Estate agent fees for rental:
If a landlord hires an estate agent for the rental of a property, the estate agent fees incurred can be claimed as advertising costs under income from renting and leasing in the tax return (Form V).

Estate agent fees when buying property:
When purchasing a property for rental, the estate agent fees are part of the acquisition costs and cannot be deducted immediately. However, they have a tax effect through the depreciation (AfA) of the building.

If the property is owner-occupied, estate agent fees are not tax-deductible.

Example:
A landlord purchases a flat for rental in 2025 and pays an estate agent's commission of 10.000 Euro. The commission is part of the acquisition costs and is taken into account for tax purposes on a pro-rata basis through the annual building depreciation (e.g. 2% over 50 years).

Legal basis and sources

• § 2 para. 1a Housing Brokerage Act
• § 9 Income Tax Act (advertising costs)
• § 6 para. 1 no. 1 Income Tax Act (acquisition costs)
• § 7 para. 4 Income Tax Act (depreciation)
• Law on the Distribution of Estate Agent Costs in the Brokerage of Purchase Contracts for Flats and Single-Family Houses (Federal Law Gazette I 2020, p. 1245)