Who pays the Commission

Who Pays the Agent? A Clear Guide to Real Estate

Commissions in Luxembourg

Navigating the real estate market in Luxembourg can be both exciting and complex. One crucial

aspect that often raises questions is the payment of agency commissions during property

transactions. Understanding who is responsible for these fees and how they are calculated is

essential for both buyers and sellers.

Commission Structure in Property Sales

In Luxembourg, real estate agency commissions are typically calculated as a percentage of the

property's sale price. The standard rate is around 3% plus VAT (currently 17%), though this can

vary depending on the agency and the specifics of the transaction 🤝 Who Pays the Commission?

• Seller's Responsibility: Traditionally, the seller pays the agency commission. This is

because the seller engages the agency to market the property and find a buyer. The

commission is due upon the successful completion of the sale, typically at the signing of the

notarial deed .

• Buyer's Responsibility: If a buyer engages an agency through a search mandate to find a

property, the buyer is responsible for the commission. This arrangement is less common but

legally permissible.

• Shared Commission: In rare cases, the commission may be split between buyer and seller,

but this must be explicitly agreed upon in the contract.

Legal FrameworkPreviously, the Grand-Ducal Regulation of January 20, 1972, set maximum commission rates for

real estate agents.However, this regulation was repealed by the Law of May 17, 2004, on

competition, allowing agency fees to be freely determined by market forces.

Rental Transactions

In rental agreements, the practice has evolved. As of August 1, 2024, a new law mandates that

agency fees for residential leases be split equally between the tenant and the landlord. Previously,

tenants often bore the full cost .

Key Takeaways

• Sales: Seller typically pays the commission unless the buyer has a search mandate.

• Rentals: Agency fees are now split 50/50 between tenant and landlord.

• Negotiation: Commission rates are negotiable and should be clearly outlined in the agency

agreement.

Understanding these nuances ensures transparency and helps avoid unexpected costs during

property transactions in Luxembourg.

Real Estate Agency Commissions in Luxembourg

Property Type Transaction

Type

Who Pays the

Commission Commission Amount Notes

Residential Sale Seller ~3% of sale price + 17% VAT

Paid at notarial deed

signing; customary

practice

Residential Purchase with

search mandate Buyer ~3% of purchase price + 17% VAT

Only if the buyer

signed a search

mandate with the

agency

Residential Rental Split equally: landlord

and tenant

Each pays half of one month's rent + 17%

VAT

As per law effective

from August 1, 2024

Commercial Sale Negotiable (often

seller) Usually 3–5% of sale price + 17% VAT

Can be shared or fully

paid by seller; depends

on contract

Commercial Rental Tenant (most

common) 1–2 months’ rent + 17% VAT

Sometimes shared, but

usually covered by

tenant

Commercial Purchase with

search mandate Buyer Negotiable, typically 2–4% + 17% VAT

Applicable when buyer

hires an agency to find

commercial property

Links:CEC Luxembourg: Who pays the real estate agent's commission?

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