Rental market in Uzbekistan remains chaotic as brokers pocket 50% commissions tax-free

The rental market in Uzbekistan is an entirely unregulated, chaotic sector. Usually, to rent a home, people either browse listings online, go door to door in search of options, or turn to realtors and brokers. Middlemen typically charge a service fee equal to 50% of the rental price – and do not pay a penny in taxes. Kun.uz spoke to tenants to learn more about the situation on the ground.

In most cases, renting a home in Uzbekistan means you have to go through a realtor or broker who has already made arrangements with the property owner. Finding a place yourself can take up a lot of time. Realtors and brokers, meanwhile, tend to view those searching for a home as easy prey.

In Tashkent, finding a rental home is becoming increasingly difficult – prices are high, landlords can be picky, and tenants’ financial situations are often dire.

At the housing market in the Chilonzor district, 90% of those standing around are realtors and brokers. Some are not even 18 years old. One says they were born and raised in this market.

Women, the elderly, and the unemployed have also joined the broker ranks. When they saw cameras, these shrewd individuals suddenly turned into angels of mercy, claiming they would find free housing for the poor.

“A struggling family once came looking for a home. We found them a place for free. But there are brokers who still demand the 50%, while unregistered street middlemen simply take the landlord’s number. They pick up clients off the street and even charge them for the taxi fare to view the property. There’s no paperwork, and if any problem arises, tenants can’t get their money back,” one broker said.

The lack of regulation means anyone can show up here and offer a home, then take 50% of the rent as a commission – without paying any taxes on the income.

Currently, standard apartments with decent conditions that meet public demand cost around $400–450 per month. Importantly, no one in the housing market quotes prices in the national currency – negotiations are always in foreign currency.

Housing for students is a separate issue. Almost no one rents to them, and those who do often offer shabby, gloomy places with no amenities.

“I’ve been looking for four days now, wasting so much time. I came a month before classes start, but there’s nothing available. Prices are way too high, and as a student, I just can’t afford them. Brokers still demand 50% and even offer apartments that have already been rented out, wasting our time,” said one student at the market.

So, what should a provincial public-sector employee do – pay their child’s rent, cover their own family’s needs, or try to balance both?

Brokers in the housing market often even charge tenants for the money spent viewing a property. Many make deals with landlords to evict tenants each month, allowing them to “rotate” clients and collect new commissions repeatedly.

Among those at the market are women on maternity leave, yet they too set their fees at 50% of the rental price.

“I actually have a profession, but I’m on maternity leave right now. I used to work at a university,” one broker said.

For a family living on a government salary, renting in Tashkent is unbearable, says an Uzbek who has lived in rentals in the city for years.

“Prices have skyrocketed. For a family relying only on monthly wages, renting is torture. Before, you could find a good three-room apartment for $400–450. Now, it’s impossible even for that amount,” said the tenant, who has been renting for 12 years.

We have never heard of anyone happily paying the 50% commission that brokers and realtors pocket so effortlessly. They openly admit they chose this line of work for the easy, lucrative income.

So why is the state ignoring this chaotic, lawless sector? Looking through legal documents, we found the “Law on Real Estate Agency Services” adopted 15 years ago under President Karimov. Which parts of it still function today, and which are out of touch with reality – that’s a big question.

Article 20 of Chapter 5 of the law stipulates that the content of a real estate service and the payment amount must be clearly stated in a contract. However, a realtor is an employee of a licensed commercial organization. So who exactly is a broker, and where do they pay taxes on their earnings? Who is monitoring them?

According to some online reports, parliamentary discussions are currently underway on a document to regulate real estate agency activities. However, it is still unclear what exactly this new law will cover.