Title: New Government Policy Sets National Framework for Real Estate Broker Commissions
In a significant regulatory move, the Iranian cabinet has approved a new framework for determining real estate broker commissions, shifting the basis of calculation from fluctuating daily market prices to a fixed, government-defined “transactional value” for properties.
A Shift to Standardized Commissions
The decision, based on the “Law Mandating the Official Registration of Real Estate Transactions,” was announced by Kianoush Goodarzi, Head of the Real Estate Consultants Union. He confirmed that broker fees will now be calculated using a coefficient applied to the transactional value of properties, as outlined in Article 64 of the Direct Taxes Law.
“This new tariff will be specified and implemented within the next three months by supervisory commissions in each of the country’s 400 counties,” Goodarzi stated.
Addressing Industry Concerns
Goodarzi explained that the new policy comes after extensive consultations. Initial proposals from the Ministries of Industry, Mine and Trade, Roads and Urban Development, and Justice were revised after the Union successfully argued that a single national index was unworkable.
“If the old tariff structure had continued, real estate consultancies would have been forced to shut down,” Goodarzi emphasized. “Thankfully, state officials and the Ministry of Industry, Mine and Trade listened to our reasoning.”
Key Provisions and Enforcement
A central feature of the new regulation is the complete decoupling of broker commissions from a property’s day-to-day market price. The policy strictly prohibits brokers from charging any additional fees, even with client agreement, for services like contract drafting. Violators will face severe penalties.
“Any broker who deviates from the set ceiling will be subject to fines of up to three times the illicit income,” Goodarzi clarified.
Stability and Economic Impact
The head of the Union also addressed public perception, countering the notion that brokers are a primary driver of housing inflation. He asserted that with a thriving business environment, the revised broker fees would have no significant impact on housing prices.
Under the new system, the transactional value for different property blocks within each county will serve as the stable baseline. Local supervisory commissions will then determine the specific coefficient used to calculate the final commission, ensuring that the new rates are, at a minimum, not lower than what is currently received by brokers in most areas.
This comprehensive policy is designed to bring uniformity, transparency, and stability to a vital sector of the national economy.