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Buyers’ FAQs for Austria | Alpine Property Finder

Purchasing Process

What are the costs when purchasing a property in Austria?

Standard buying fees are as follows:

  • Notary fees 1.7-2% + VAT
  • Stamp duty 3.5%
  • Land registry fee 1.1%
  • Agency fees 3%*

*In some new build projects the agency fees are not applicable

How long does it take to buy a property in Austria?

The property purchasing process requires you to sign a binding offer agreement after viewing or based on the information and plans in case of a new build property.

This offer agreement or “Kaufanbot” states the information of the apartment, the seller, the buyer and any secondary conditions such as payment schedules and handover dates.

Once this document is signed by both parties, a lawyer will be instructed to draft the official purchase contract or ‘kaufvertrag’. The purchase contract needs to be legalized which can be done at the notary in Austria, the Austrian embassy or consulate or with a local notary with an apostille.

Once the contract is signed by both parties it is returned to the lawyer and the purchase price is paid into the escrow account. When any secondary conditions are met, the handover can take place and funds can be released to the seller.

What is the role of the agent?

The role of an estate agent is to facilitate the sale of a property. On behalf of the seller they will ensure the most effective advertising for each individual project or property, making sure they connect with suitable buyers.

On behalf of the buyer they will arrange viewings, provide comprehensive information on the property and help guide the you through every step of the purchase process.

What are the staged payments when buying a property in Austria off-plan?

When buying an off-plan property in Austria payments are made according to the build stages. Payments are made into the escrow account and can only be released to the seller by the lawyer when the construction milestones have been reached. There are two fixed payment plans:

Rate plan A

  • 15% at start of building works
  • 35% on completion of the shell and roof
  • 20% on completion of plumbing and electrical installations
  • 12% on completion of the facade & windows
  • 12% on completion of the property
  • 4% on hand over of keys
  • 2% after three years

or

  • 10% at start of building works
  • 30% on completion of the shell and roof
  • 20% on completion of plumbing and electrical installations
  • 12% on completion of the facade & windows
  • 17% on completion of the property
  • 9% on hand over of keys
  • 2% after three years

What construction guarantees are there when buying off plan?

Developers must have the financing in place before they start construction. You will only pay for each stage payment AFTER it has been completed.

New build properties in Austria also usually have a 2% guarantee that is withheld for three years after handover in the event of any snagging issues.

Mortgages

How much can I borrow from an Austrian bank?

When you are buying a touristic rental property in Austria you can borrow around 50-60% of the value. Banks also consider the rental income that the property will generate making it relatively easy to obtain finance on these types of properties

What are the interest rates on Austrian mortgages?

Austrian mortgages tend to have favourable interest rates, often ranging somewhere between 2-4%. However, this can vary depending on the position of the market at the time.

How long are Austrian mortgages?

For a rental property, the mortgage term is often set to about 15-20 years to run alongside the rental contracts.

What types of mortgages are available in Austria?

The three main types of mortgages available in Austria include fixed-rate, adjustable-rate and a mortgage combination which merges two mortgage loans. Austrian mortgages are always full repayment mortgages and no interest-only options are currently available.

Rental Investment Opportunities

How do I rent out my property in Austria?

In nearly all new built properties there will be a designated rental management to take care of all the aspects of the rentals for you, often for a fixed commission on the income. If you do own an existing property that has rental permission without a designated rental management you will often find there are several companies in the area that can help rent out your property.

Do I have to rent out my property in Austria?

In Austria there are strict rules on how each property can be used. In most cases when there is permission to rent out the property touristically there is also an obligation to rent out the property at a profit for 20 years for tax purposes.

In return you are able to reclaim the 20% VAT on the purchase price.

How often can I use my rental property myself?

Because often there is the obligation to rent out the property at a profit, this limits the amount of own use to around 6-8 weeks a year from a tax perspective.

In some cases there are also conditions set by the rental management which may vary slightly from property to property.

Is Austria a good place to invest into a property?

Austria is home to some of the most popular ski resorts in Europe and has a stable property market, offering a range of excellent investment opportunities. Main points of interest for investors are as follows:

Continued growth in the tourist industry, particularly outside the traditional winter market Higher yields compared to other alpine markets attracting international investors Well capitalised local banking sector with low mortgage borrowing rates Risk-averse investors seeking stability in blue-chip economies.

Has Austria’s economy recovered from the COVID-19 pandemic?

Austrian tourism has grown steadily over recent years and successfully climbed out of recession. It is also expected to be one of the most significant growth industries as Austria emerges from the COVID-19 pandemic.

Tourism is now one of Austria’s fastest-growing sectors. According to figures, tourism contributed nearly 30 billion Euros to the economy in 2019 and taking into account travel, the figure rose to 44 billion Euros.

Austria’s economy has grown quickly after the pandemic, thanks to a lifting of COVID restrictions, supportive government measures and a surge in holidaymakers eager to book summer and winter breaks.

Austria looks set to recover well from the COVID-19 pandemic and GDP is expected to grow by 2% in 2021 and 5.1% in 2022.

Buying a property in a company name

Can I purchase a property in a company name in Austria?

You can buy a property in a company name in Austria, providing the business is EU-based and that 50% of its shares are owned by EU citizens. You cannot buy an Austrian property in the name of a non-EU company.

What are the costs?

The cost of setting up an EU company can vary on the type of company you want to set up and the country where the company is registered. We can recommend a tax advisor to help you with this process.

Are there benefits to buying a property in a company name?

The benefits of buying a property in a company name in Austria include being able to purchase with multiple owners. It also allows for tax-free ownership transfers via shares.

As of 2022, profits on the disposal of a property owned by a company are charged at 25% compared to 30% for an individual.

Taxations

How much local property tax do I need to pay in Austria?

You will have to pay local property taxes in Austria, although this varies depending on the region. The government’s local tax calculator can help you find out the exact amount.

How much rental income tax am I liable for?

As of 2022/23, rental income tax rates in Austria sit between 20% and 50%. How much you pay will depend on the tax band you fall into.

Rental income is taxed as income in Austria and is therefore subject to the same rates as income tax which in 2021 were as follows: Up to 11,000 = 0%, 11,001 – 18,000 = 20%, 18,001 – 31,000 = 35%, 31,001 – 60,000 = 42%, 60,001 – 90,000 = 48%, 90,001 – 1,000,000 = 50%, above 1,000,000 = 55%. For non-resident owners who live in the property less than 70 days per year, the 0% band is reduced to €3,000.

Dual taxation agreement exists between the Austria and many other countries to ensure that you are not taxed twice on the same income.

Can I reclaim the VAT by renting my property in Austria?

Yes. Many new-build developments that are designated for touristic use will allow you to reclaim the 20% VAT from the purchase price.

You will need fill annual VAT returns and aim to make a ‘profit’ for tax purposes over a 20 year period.

Your agent will assist with an introduction too a tax advisor who will handle these affairs for you.

How much is capital gains tax?

Capital gains tax for real estate in Austria stands at 30% as of 2022/23.

Are there any further taxes I need to be aware of?

If you rent out your Austrian property to guests, they will need to pay a daily tourist tax to the local council. Villages impose this tax in order to raise revenue on properties registered as holiday homes – if your property is registered for permanent residency, the tax will not be payable.

It is the law to charge tourism tax on all guests over the age of 14 for each night they spend on your property. The rate varies between villages but is typically between €0.36 and 3.2% of the cost per night, which your management agent will pay to the Gemeinde (council) on a regular basis.

Applying for residency

Can I become a resident in Austria?

Residency permits in Austria are available to people who wish to work or study in the country. You will have to be present in the country for a minimum of 183 days a year to be eligible to apply.

How long can I stay in Austria for?

If you are planning an extended stay in Austria, you will need a visa which will allow you to remain the country for 90 days in any 180-day period.

Restrictions

Can foreigners buy a property in Austria?

All EU citizens can buy a property in Austria without restriction. Non-EU citizens would need to apply for a special permit at the Land Transfer Authorities, this is a lengthy process without any guarantees that would lock the property in a sale until the permit is either granted or denied.

In a practical sense this means that sellers won’t easily accept offers from non-EU buyers. The only properties where the permit isn’t needed are designated second home or ‘zweitwohnsitz’ properties, however even here there are extra conditions that need to be met by Non-EU citizens.

Can UK Citizens buy property in Austria?

Since Brexit UK Citizens are no longer EU citizens. This means that they would also need to apply for a special permit at the Land Transfer Authorities or find a ‘zweitwohnsitz’ property.

The reality is that, in most desirable locations, these permits are unlikely to be available and our recommendation for UK passport holders is too now focus on the French and Swiss Alps when looking to buy a ski property.

You can purchase a property in Austria if you setup an EU company but at least 50% of the shareholders will need EU passports.

Are there any restrictions on selling my property?

There are no restrictions on selling your property in Austria, although you will be liable to pay capital gains tax which stands at 30% for real estate. There will also be the usual associated costs to pay, such as estate agents fees and VAT.

What are the different property types of property in Austria?

There are three different types of property in Austria.

  1. Hauptwohnsitz or main residence . These properties cannot be rented out to tourists for holiday lets and therefore tend to command lower prices per m2 than a similar ‘toursism’ property. These are generally sought by local buyers or foreigners looking too move permanently too Austria.

  2. Touristische Vermietung or touristic rental properties are the most sought after by foreign buyers and investors. These often come with designated professional rental management and hotel style facilities such as restaurants, bars, swimming pools and wellness areas.

    Owners will be typically be limited to 4-8 weeks personal use each year and must rent out their apartment for the remainder of the time and make a profit for VAT purposes.

  3. Zweitwohnsitz or second home. They can be used as pure ‘second homes’ by their owners who are free to use their property as a private second home and visit as much or as little as they wish.

    These Zweitwohnsitz properties are incredibly rare as there are strict rules against them since 1969. New Zweitwohnsitz properties are only allowed in designated areas that are deemed undesirable for main residence due to the distance to facilities such as schools, shops etc.

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