The "Law on the Distribution of Broker Costs for the Sale of Apartments and Single-Family Homes" came into force on 23 December 2020. This reform ends a decades-old practice and creates fairer conditions in Berlin's property market.
The new rules from December 2020
The core of the law is the equal split of the broker's commission between buyer and seller. When a broker acts for both parties (the standard case), both sides must pay equal shares. The seller can no longer pass the full commission on to the buyer. Additionally, the seller must prove payment of their share before the broker may request payment from the buyer. This creates transparency and a new cost fairness.
Previous practice: buyer-only commission
In tight markets like Berlin, it was common for the buyer alone to bear the full broker commission of up to 7.14% of the purchase price (including VAT). This drove up transaction costs and posed a high hurdle for private buyers. For sellers, engaging a broker was often "free," which shifted competition away from service quality and towards commission-free listings for sellers.
Sellers now share the cost, and gain leverage on service
For owners looking to sell their property, the change means a direct cost contribution. This investment, however, creates a balance of interests: the broker now owes equal duty to both parties. Sellers can expect higher service quality and stronger commitment, since the broker's fee now also depends on performance for the owner. Marketing quality becomes the priority, which can lead to better sales outcomes over time. Choosing a Berlin real estate agent is therefore less about the commission model and more about market expertise and marketing strategy. With both sides paying, market practice is shifting from commission-free pitches toward demonstrable service quality.
Benefits for buyers and investors
The most obvious improvement for buyers is lower transaction costs. The 50/50 split frees up budget and reduces the equity requirement. This makes acquiring apartments in Berlin easier, particularly in high-price areas such as Charlottenburg-Wilmersdorf. Investors also benefit from the lower transaction costs, improving yield calculations. The new transparency strengthens the buyer's negotiating position and promotes a fairer market environment.
Disclaimer
This article is for general information only and does not constitute tax or legal advice. The content does not replace individual consultation with a tax advisor or attorney. No liability is assumed for accuracy or completeness.
