How are real estate commissions calculated in different countries?

Practices for calculating commissions in different countries

In different countries, there are specific practices for calculating commissions for realtors. The amount of these commissions can vary not only depending on the category and value of the property but also based on the internal rules of a particular company. Additionally, value-added tax (VAT) is added to these amounts, which can differ depending on the region.

Commissions and VAT in different countries

This article provides information about the commissions for both parties in a transaction — buyers and sellers — as well as the VAT rates in several countries:

• Austria:Buyer 3%, seller 1-2%, VAT 20%
• United Kingdom:Buyer 0.5-3.5%, Seller 0.5-3.5%, VAT 17.5%
• Hungary:buyer - 3-5%, VAT 27%
• Germany:buyer 2-6%, VAT 19%
• Greece:Buyer 2%, seller 2%, VAT 24%
• Spain:buyer 3-5%, VAT 6-21%
• Italy:Buyer 3-5%, seller 3-5%, VAT 10-22%
• Cyprus:buyer 3-8%
• Latvia:buyer 2-5%, VAT 21%
• UAE:buyer 2%, seller 2%
• Portugal:buyer 3-5%, VAT 23%
• Slovenia:Buyer 3%, seller 1%, VAT 9.5%
• USA:buyer 2-6%
• Thailand:buyer 3-5%, VAT 7%
• Turkey:buyer 0-2%, seller 2%
• Finland:buyer 2.5-5%, VAT 24%
• France:buyer 4.5-8%, VAT 20%
• Croatia:Buyer 3%, seller 3%, VAT 25%
• Montenegro:buyer 3-5%, VAT 19%
• Czech Republic:Buyer 2.5-5%, Seller 2.5-5%, VAT 15%
• Switzerland:buyer 3-5%, VAT 7.6%

The situation in Austria

Now let's take a closer look at the situation in Austria. Here, as a rule, the commission is paid by the buyer, and it amounts to 3% plus 20% VAT. This level of compensation is regulated by specific legal frameworks for realtors and cannot exceed established limits.

According to information from MKR Real-Consulting, the maximum commission can rarely reach 4% of the price; however, such situations mainly concern transactions involving properties valued at no more than 40,000 euros, which is quite a rare occurrence in Austria. Konstantin Isakov, director of Austria-Invest, notes that sometimes the seller may pay the agency 1-2% from their share, but such cases are not common, for example, if a developer is eager to sell apartments quickly in a newly built residential complex.

Commercial real estate and luxury housing

As for the commercial real estate market and the luxury housing segment, similar conditions apply in this context: the commission is 3.6% including VAT. However, in practice, this percentage is often a subject of negotiation between the buyer and the agency, especially when it comes to large transactions.

The situation in the United Kingdom

In the UK, there are various categories of agents for working with sellers and buyers. As Dmitry Zakirov, a partner at Longrad, explains, in the residential real estate market, in 96% of cases, it is the seller who bears the costs of their agent's commission, who represents their interests, while the buyer remains without proper representation.

There are also agencies that specifically focus on protecting the interests of buyers, which is quite common in London. Many of these buyers are foreign investors who find it beneficial to pay for agents' services to find unique offers, analyze properties, and assist with transactions. In such cases, the commission is paid by the buyers themselves. When it comes to commercial real estate, both parties—buyers and sellers—often seek the help of professionals.

Commissions on real estate transactions in the UK

In the United Kingdom, commissions for real estate agents are generally lower than in other countries. Dmitry Zakirov notes that in a highly competitive market, where properties often do not exceed £500,000, independent agencies can significantly reduce their commission fees, setting them at just 0.5% of the sale amount.

The most commonly encountered commission percentage ranges from 1.5% to 2.0%. However, some companies looking to attract more clients may set higher rates, reaching up to 2.5% or even 3.0%.

Premium segment

In the premium segment of the market, where property prices range from 5 to 15 million pounds sterling, commissions rarely exceed 1% or 2%. For properties valued over 20 million pounds sterling, it is not reasonable to expect higher commissions.

Exceptions include investment properties such as hotel rooms or spots in student dormitories, where developers can offer up to 5% or 7% to attract investors.

Lack of regulation

The lack of clear legislative norms regarding commission sizes in the UK plays its role. Payment terms are formed based on mutual agreements between the client and the agent, as well as under the influence of market factors.

Dmitry Zakirov also emphasizes that the possibility of discounts on commissions depends on the success of the negotiation process. Realtors can offer reduced prices for their services to both sellers and developers, especially in cases of exclusive contracts or when selling multiple properties at the same time.

Consultants can also offer discounts to customers if they return for repeat business.

Commissions in Hungary

Let's move on to Hungary. Here, the commissions for realtors range from 3% to 5% of the market price of the properties, and an additional 27% VAT is added to this amount.

According to information from Duna House, many large agencies set a commission rate of 5%, which is typically paid by the seller under the terms specified in the contract.

Commissions in Germany

The situation in Germany is different. Commissions for properties valued up to 15 million euros range from 3.57% to 7.14%, including VAT at 19%.

For more expensive real estate, with a value exceeding 15 million euros, a minimum commission of 2.38% is set (including VAT). However, it is difficult to find low commissions for high-budget properties – they are rarely below 3%.

Sofia Bulanova, a sales manager, notes that commissions of less than 3% are usually not mentioned in the advertisement, and the possibility of lowering the rate to 2% only arises after negotiations with the agent.

The recommended commission levels depend on the region and are set by local realtor associations. In Germany, there is no single law regulating commission amounts; final sums are determined based on market competition. Most often, the commissions are paid by the buyer, or they are split evenly between the buyer and the seller.

The question of commission distribution between the parties of a transaction is accepted only for operations related to private residential properties — such as apartments and houses. This principle applies to those buyers who plan to live in the acquired property rather than rent it out. The norms of this rule do not cover undeveloped land, multi-family houses, or commercial real estate. Additionally, individuals wishing to buy land for building their own homes are also not entitled to proportional distribution of the brokerage commission. In Germany, it is generally recommended to charge a commission to clients who speak Russian. Please note that the obligation to pay the commission may not always lie with the seller, especially if the property is highly attractive in the market.

Commissions in Greece

Greece follows certain rules: both the seller and the buyer are required to pay the realtor 2% of the property's value. Additionally, the value-added tax (VAT) in this case is 24% and is also shared between the parties.

Internship in Spain

In Spain, the situation is such that commission fees are most often paid by the seller. Typically, the commission ranges from 3% to 5% of the final sale price, and if the property price is low, a fixed commission amount of around 6,000 euros is often established. In the primary market, these fees are generally lower than in the secondary market; as the value of the property increases, the relative size of the commission usually decreases.

It's important to consider:

• The value-added tax in Spain can range from 6% to 10% depending on the region.
• In Catalonia, the VAT is 10%.
• In commercial real estate, the commission is often paid by the buyer.
• The commission fee ranges from 2% to 6% depending on the price of the property.
• When purchasing commercial real estate, the VAT rate is 21%.

Commissions in Italy

In Italy, the method of determining commission fees differs from practices in other countries. As Natalia Grankina from the Liguriahomes Casamare agency clarifies, in Liguria, the standard commission rate is 3% of the transaction amount for both parties, plus VAT, which ranges from 10% to 22% depending on the type of residential property. Olga Skovron from Engel & Völkers emphasizes that in their company, the rate is set at 4% for both buyers and sellers.

Conditions and norms in Italy

Despite the absence of strict regulations regarding commission sizes in Italy, there are certain conditions known as "usi e consuetudini." These conditions are established by the chambers of commerce in various cities.

Key points:

• The agent has the ability to independently set the commission rate in a specific area.
• Traditional norms and customs are taken into account.
• These customs can be used by the court in case of legal disputes.

Conditions of agency commissions in Italy

In Italy, there is a variety of conditions regarding agency commissions, and clients have the opportunity to receive different discounts. When a buyer chooses to sign an exclusive agreement with one agent, they can expect to pay a reduced commission rate. In situations where the purchase involves real estate worth several million euros, the buyer can also insist on a lower commission.

Our company offers favorable conditions for loyal clients. For example, one of our clients who purchased three properties over the course of a year was able to secure a personalized offer for future transactions, which allowed him to significantly save on commissions, shares Natalia Grankina.

Commissions in Cyprus

In Cyprus, it is usually the sellers who pay the commissions, while agents are burdened with value-added tax on these amounts. Georgy Dokuchayev, the sales director of Prime Property Group, emphasizes that the commission rate can vary from 3% to 8%, depending on the location, type, and value of the property, with the most common rate being around 5%. In some cases, for high-value properties, the commission may be reduced by 1-2%, but much depends on the agreed terms between the agent and the seller.

Speaking about the possibility of obtaining commission discounts in Cyprus, Georgy notes that such practices serve as a means to retain clients. Usually, these discounts are found in the secondary market and are episodic in nature, as the profit from reselling real estate in some cases exceeds the income of agencies. Moreover, a small reduction in commission by 1-2% often does not have a significant impact on the final seller.

Features in Latvia

Latvia also has its own specifics regarding commission payments, which are mainly paid by the seller. As reported by Yulia Barsukova, an expert from Mercury Group Estate, in rare cases, when it comes to inexpensive or unique properties, the commission may be shared between the buyer and the seller. Typically, the commission ranges from 2% to 5% of the property's price. However, when it comes to expensive real estate, the commission is usually less than 3%, often around 2%.

It's interesting that the commission percentage is directly proportional to the price — the cheaper the property, the higher the likelihood that the commission will be around 5%.

Lack of clear standards

In Latvia, there is no legally established norm that clearly regulates the size of commissions. The interest rate is determined during negotiations between the parties and the level of competition in the market. As a result, clients may encounter various conditions and rates that depend on the uniqueness of the offer and current market trends.

Experts recommend carefully reviewing all the terms of deals and being open to negotiations in order to achieve the most favorable conditions for oneself. Thus, understanding market conditions and the ability to negotiate can play a key role in a successful real estate transaction in different countries.

Real estate in Latvia

Currently, Latvia has a wide selection of real estate listings, with a total of 2,584 properties available for sale. For example, in the heart of historic Riga, you can buy a modern apartment with an area of 125 square meters for 329,000 euros. In the historic center of the city, three-room apartments are for sale in a prestigious area, priced at 400,000 euros, with a total area of 97 square meters and two cozy bedrooms.

Among the attractive offers, it is worth highlighting an apartment in the old part of Riga, which has a total area of 102 square meters and is priced at 235,000 euros. Also for sale are furnished apartments with a balcony in a building with a rooftop terrace, a well-maintained courtyard, and a playground. These apartments are located in Riga and have one bedroom and one bathroom, with a price of 140,000 euros.

There is also the opportunity to purchase exclusive housing on Albert Street with a total area of 236 square meters for 1 million euros. If you need more spacious options, apartments with an area of 174 square meters and three bathrooms are available in Riga for 1,300,000 euros.

Commission fees in Slovenia

In Slovenia, the distribution of commission fees in the real estate sector affects both sellers and buyers. According to local legislation, the maximum commission should not exceed 4% of the transaction value. However, in practice, the distribution of these costs between the parties is rarely equal. Most often, buyers are responsible for 3% of the property price, as noted by Vladimir Uvarov, a representative of Future Real Estate in Russia.

Value Added Tax in Slovenia

Currently, the value-added tax in Slovenia is 22%, but a reduced rate of 9.5% applies to transactions involving residential properties.

Commission system in the USA

In the United States, in most cases, commissions are paid by the sellers. Ilya Bitkov, a realtor from Coldwell Banker, explains that for transactions under 1 million dollars, the commission ranges from 5% to 6% of the property's price, while for transactions exceeding 1 million dollars, the rate is 4% or 4.5%. In the case of multi-million dollar transactions, the commission can decrease to 2% or 3%, or it may be set as a fixed amount of compensation.

Payment terms and options

There is also a situation where a real estate agent can sign an agreement in which the commission is determined based on an attractive percentage, for example, no less than 2.5%, regardless of the total commission amount. In such cases, if the total commission is 4% and the parties agree to a 50/50 split, each party will receive 2%. However, the buyer will also be required to pay their agent an additional 0.5% of the total reward. It is important to note that the commission is paid to the real estateagency, not separately to the agent, who is not allowed to accept money from clients.

Negotiations about commissions in the USA

The expert confirms that the principle is in effect in the USA.“Real estate commissions are negotiable.”This implies that the commission amount is agreed upon by the parties and is not fixed in legal acts. Even if the commission percentage is set in advance, both parties have the opportunity to discuss its modification during the final negotiations. The real estate company can either refuse to reconsider it or make concessions to reach a mutual agreement.

Commission fees in Thailand

In Thailand, the commission ranges from 3% to 5%. In transactions involving secondary real estate, the commission fee is paid solely by the seller, while in the case of purchasing new developments, this amount is usually covered by the developer. An interesting feature is the possibility of receiving a discount on commission fees. In Pattaya, some agencies offer clients what is calledcashback– a refund of part of your commission.

Real estate listings in Thailand

As of today, there are 5,482 real estate listings in Thailand, including offers for a new premium-class villa complex located in Thep Kasattri, Thalang, on the island of Phuket, with prices starting from $1,144,000 and a completion date set for 2025.

Luxury real estate in Phuket

For just $789,000, there is an opportunity to purchase a magnificent two-level villa with various amenities. This stunning property is located in the popular resort area of Pasak on the island of Phuket, Thailand.

The area of this property is 488 square meters and includes four comfortable bedrooms. Additionally, a premium three-story villa is offered at a price starting from $683,000, which is also located near beaches and golf clubs. The property has an area of 228 square meters and includes three cozy bedrooms.

Luxury real estate

If your goal is elite real estate, we have a selection priced at $111,000 — a beautifully designed residential complex with developed infrastructure, just a few minutes from Bang Tao Beach, with a planned completion date set for 2026.

In Phuket, there are also over 789 modern apartments with villas and pools, starting at a price point of $722,000. Moreover, a new residential complex of stylish villas in Thalang, completed in 2023, offers 54 housing units starting at a price of $1,592,000.

Exclusive offers

Among the exclusive offers is:

• 51 villa located within walking distance of Bang Tao Beach, with prices starting from $182,000 and a completion date set for 2025.
• 400 apartments in a large resort complex located on the first line of Nai Thon beach, built in 2023, with prices starting from 173 thousand dollars.

Real estate in Turkey

As for the Turkish real estate market, the service fee for the secondary market is 2% of the transaction amount, applicable to both the seller and the buyer. The taxes related to this commission are paid by the real estate offices.

While on the primary market, the buyer is exempt from these costs, as the commission is covered by the developer. Real estate sales specialist in Turkey, Maria Zharaya, emphasizes that in major cities such as Istanbul, Izmir, Kusadasi, Bodrum, and Marmaris, commissions can reach up to 3% for both parties.

Commissions and their amounts

The amount of the commission fee is determined based on:

• A specific project.
• Geographical location.

In the primary market, the developer sets the commission rates themselves, which are included in the price of the property, while in the secondary market, agents add their share to the offered price. It should be noted that Turkish legislation does not limit the level of commissions, and neither the seller nor the realtor is required to make this information public.

Discounts on commissions

Discounts on commission services are also possible in Turkey. Professor Cameron points out that an agent can offer a 2% discount to reduce costs for the buyer.

In a number of regions, such as Alanya, there is a variety of conditions: developers sometimes offer discounts if the client contacts the agency directly. Generally, the smaller the organization, the higher the likelihood of receiving additional benefits and offers.

Commission in Finland

Finland also shows quite high prices for agent services, which range from 2.5% to 5%. The commission size varies depending on the specific realtor.

According to Elena Lednitskaya from Bulevardin Kotimeklarit, realtors' commissions rarely exceed 5%. Thus, both in Turkey and Finland, potential buyers can expect favorable conditions, making these real estate markets attractive to investors.

Our company has set agent service fees at 2.5% for apartment purchases and 3% for house sales, and these amounts already include VAT, our specialist explains.

Most often, the commission fee is paid only by the seller of the property. However, in some cases, buyers approach an agency to find a specific type of housing and may sign an agreement with it. In such situations, it is the buyer who is responsible for paying the commission, and the agency has no right to demand a fee from the seller.Discounts on commissions are generally not offered.

Realtor commissions in France

In France, it is common practice for the seller to pay the commission. When it comes to the sale of new constructions, the construction company pays the commission fees. Elena Generanova, director of French Riviera Realty, clarifies that there are different commission rates in the country depending on the market value of the property:

• up to 50,000 euros — 8%
• from 50 to 120 thousand — 7%,
• from 120 to 200 thousand — 6.5%
• from 200 to 500 thousand — 6%,
• from 500 thousand to 1 million — 5%
• Above 1 million euros — 4.5%.

“Despite this, the size of the commissions is often discussed and can be either 4% or 5%. This issue is resolved at the time of signing the sales contract. Developers set a fixed commission percentage that will be paid for the sale of all apartments in this project,” Elena explains.

Legislation in France

In France, the size of real estate agents' commissions is regulated by Law 70-9 of January 2, 1970, which is known asHoget's lawIn some cases, sellers have the opportunity to negotiate and agree to a reduction in commission.

Realtor commissions in Croatia

As for Croatia, it is customary to set a standard commission of 6%. This percentage is divided between the seller and the buyer, so each of them has to pay 3% of the transaction value. VAT, which is 25%, is added to these amounts.

“If you discuss the terms with the agency in advance, it is possible to reduce the commission for large transactions.”The minimum commission for transactions involving objects valued at less than 40,000 euros is set at 1,500 euros.“At the same time, there are no differences in commissions for the primary and secondary markets,” emphasizes Ekaterina Kalender, a specialist in the Adria Pro project.

Regulation in Croatia

According to the expert, the activities of agencies in Croatia are regulated.LAW ON INTERMEDIARY SERVICES IN THE REAL ESTATE SECTORHowever, the law does not set maximum allowable commission sizes — this is determined by the terms of the contract between the parties. "Discounts are only possible for large transactions; in other cases, such practices are extremely rare," adds Ekaterina.

Realtor commissions in Montenegro

As for Montenegro, real estate services for buyers are provided here.free of chargeAll financial obligations for commissions are borne by the seller, who pays a commission ranging from 3% to 5% of the total property value.

Thus, the rules and practices in different countries have their own peculiarities, but there are certain nuances that affect the compensation of realtors and the conditions for its payment, which must be taken into account when conducting real estate transactions.

In conclusion, the analysis of various methods for calculating real estate commissions in different countries shows that this topic requires special attention from all participants in the real estate market. Each market has its unique characteristics and rules that influence how and who pays the commission. From Austria to the United Kingdom, from Hungary to Germany, we see a wide range of rates and conditions that, in turn, reflect not only the economic realities but also the cultural features of each country.

What remains unchanged is that commissions often represent a significant expense for both buyers and sellers. It is important to note that knowledge of the commission rates and payment terms can significantly transform the real estate transaction experience – for both new investors and more experienced market participants. This knowledge helps avoid unplanned expenses and allows for better management of expectations.

I hope this article will help readers better understand how the payment system for real estate services works in different countries and what nuances to consider when making real estate transactions abroad. Proper management of your finances and the ability to negotiate effectively with realtors can be a key factor in a successful deal. Therefore, if you are considering buying or selling property, I strongly recommend researching the market and its features in advance to make the most of your investments.

• Every percentage of commission matters.
• Knowing the terms will help avoid unplanned expenses;
• Effective management of resources is a key factor for success.

Approach the issue with all seriousness and awareness!