The Court of Justice of the European Union (CJEU) recently issued an important ruling on 27th February 2025, confirming the compatibility with European legislation of limiting estate agents’ commission to 4% of the contractual price in property sales and rentals. From our office in Malaga city and Nerja, Perez Parras Economists & Lawyers, specialised in real estate law and property sales and purchases, and with extensive experience in towns such as Nerja, Axarquia and the rest of the Costa del Sol, it is essential to understand the practical and legal implications that this ruling has for our clients.

Legal aspects of limiting estate agents’ commission to 4%

This ruling stems from a referral from the Slovenian Constitutional Court to the CJEU, following doubts about the European legality of a national law that imposed a 4% cap on fees for real estate transactions. The Slovenian legislation aimed to protect especially vulnerable consumers such as young people, students and the elderly by facilitating their access to adequate housing at reasonable prices.

The CJEU validated this limitation as long as it complies with three fundamental criteria clearly defined in EU law:

• non-discrimination,
• justification by overriding reasons of general interest, and
• proportionality.

The court found that the Slovenian measure met these requirements, underlining that the limitation does not discriminate on the basis of the location or nationality of real estate agencies, thus ensuring fair competition in the market.

The Court of Justice of the European Union upholds the 4% limit on real estate agency fees, reinforcing transparency and consumer protection in real estate transactions.

The CJEU also emphasised that this limitation is appropriate to achieve the social objectives pursued, especially by promoting accessibility to affordable housing and increasing transparency in the prices of real estate transactions. The proportionality of the measure, another fundamental requirement, will be monitored by the Slovenian Constitutional Court itself, which will have to confirm that there are no less restrictive alternatives that could meet these same objectives.

Relevance and practical application of this decision in Malaga and Nerja

For an active real estate market such as Malaga and Nerja, which attracts national and international investors, the limitation of limiting estate agents’ commission commission to 4% of the purchase or rental price has important practical and economic benefits. Setting a clear and uniform limit ensures greater transparency in brokerage costs for buyers and tenants, avoiding unpleasant surprises related to excessive fees.

In addition, this regulation encourages fairer competition between estate agents, which can potentially improve the quality of service offered to the end consumer. Market operators will be motivated to adjust their internal costs and improve their operational efficiency by adapting to this new regulatory reality.

We see this ruling as an essential tool to ensure clearer, fairer and more predictable real estate transactions. The additional legal protection derived from this European ruling will allow our clients to carry out real estate transactions with greater security, knowing exactly what the legal limits established at European and national level are.

Conclusions from the perspective of a law firm specialising in real estate law and real estate sales and purchases

In our daily work as lawyers and economists specialised in real estate sales and purchases in Malaga and Nerja, this ruling represents a positive evolution towards a more transparent and socially responsible real estate market. We understand that this 4% cap effectively protects the most vulnerable consumers and contributes to the development of a more sustainable and equitable real estate market.

If you want to buy a property, business premises, building or parking, or sell a property in Malaga, and you want to avoid problems following the purchase of a property in Malaga, in the Law Firm Pérez Parras Economists and Lawyers in Málaga we are expert lawyers in the purchase and sale of properties in Malaga and Nerja, with a team of lawyers and economists bilingual English / Spanish who can advise you to avoid surprises in the purchase of your property. We have offices in the centre of Malaga and Nerja. Do not hesitate to contact us and ask us for a quote to accompany you in the process of buying or selling your property. We will prepare and review your earnest money contract after ensuring that the purchase you wish to make is viable and secure, without hidden charges of any kind, and we will help you and deal with all the taxes associated with your property purchase and sale operation in Málaga, optimising for example the IRPF to pay if the property comes from an inheritance, advising you until the end of your purchase, or sale of the property, including the tax declaration, whether you are resident or taxed as a non-resident, and any other procedure with the Administration or Land Registry. Equally, if you have any difficulties following the sale or purchase of a property, please do not hesitate to contact us so that we can advise you and defend you in or out of court if necessary. If you are a highly qualified professional in Malaga and wish to purchase your property in Malaga, we will also advise you in every step of the purchase process, ensuring that the property you wish to buy and the investment you wish to make will not cause you any problems, protecting your interests, organising your taxes and taxation as a highly qualified professional, so that you can develop your professional career and settle your life and your future in Malaga with all the guarantees of the best legal advice.