Acquisition of real estate properties for permanent and temporal living and for rent






Posted on 23.12.2019
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There is no any unified pattern of obtaining property in Austria. Every province in the country regulates transactions on real estate market implementing its own acts. Still there are some common rules that should be observed nationwide.

Austrian civil code implies no categorization of ownership for commercial property. As for residential realty ownership it is divided into certain types due to usage aims.

Main categories of realty proprietorship

It is customary to make out three main forms of property ownership in Austria:

  • aimed for permanent residence (Hauptwohnsitz);
  • for part-time living (Zweitwohnsitz);
  • for rental purpose (Nutzung).

Local authorities only are to consider this or that asset to be appertained to a definite category. Each category entails certain rules and restrictions as for buyers and for owners. That is the reason why you should recognize and have a good handle of the specifics of real estate transactions up front.
Any private person having moved in a new apartment or a house in Austria should apply for registration in the respective registration department within three days. That refers to under-aged members of the family as well.
This rule goes under any category of the property. The authorities responsible for making registration:

  • The Municipal Council.
  • The magistrates in the statutory cities.
  • The Magistrature Department.

Noncompliance with the obligations, in particular violating registering domicile or removal from register rules, are incriminated as administrative infractions and subject to fines up to 726 Euro (in case of more serious breach fines may reach 2.180 Euro).

Property as the main domicile

The main domicile defines a residential space where "the center of vital interests"of the owner (Mittelpunkt der Lebensbeziehungen) takes place. Here the following criteria are taken into account:

  • duration of residence;
  • primary residency registration or a lease contract (a type and a seize of an apartment);
  • utility bills (for electricity, gas, heating, etc.);
  • place of residence of family members, children especially;
  • job or educational establishment location;
  • reference from a nursery school or an educational establishment.
An individual may own any amount of secondary residences but the main domicile is considered to be the place where the owner stays for longer periods and more often. The proprietor has to live here not less than 183 days a year, possess a permanent residence card and to be an Austrian citizen.
Learn more about the ways of obtaining a residential permit in Austria in this article
an out-of-town villa overlooking Valhsee lake
In order to get a settled abode, you should have either a residential permit or permanent residence permit and registration as an assessee at the local tax authority.

This type of property may be purposed for the proprietor living or for long-time rental. Also, it should be taken into consideration that in the most popular touristic areas the greater part of real estate is categorized as the main domicile (Hauptwohnsitz).
Type of visa
Permanent residence permit
Time of the stay
from 3 to 12 months
Requirements
Confirmation of mundane needs financing capability apart from earnings, medical insurance, no record of convictions, living in Austria
Minimal investments
no
Taxes
No property tax, donations or inheritance; fixed income tax 25% on the better half of interest charges on stock dividends received from the banks, on the greater part of capital gains; on other incomes considering maximum tax rate 50%.
Period of stay essential for claiming
6-10 years of inhabitancy
Language skills
Confirmation of mastery of a language on intermediate level
Other demands
no
Dual citizenship
limited

Property for part-time residence

Such a category of property calls for the owner's inhabitance as well as for temporal short-term rent for tourists or long-term rent for local people.

If an apartment is located in the residential community and categorized as a secondary residence the owner and his or her family members may stay at it for vacations only. Rental on commercial basis is not allowed. When arranging short-term leasing, for example for weekends or for spare time one has to obtain a written approval from the other owners of the building if any and the authorities' permission.
Hallstatt
Austrian municipalities' approach to the issue of "secondary residence" is quite objectionable. To avoid an inappropriate usage of the assets there were implemented two apt ways to deal with the problem:

  1. Approval of the Community is in effect in touristic regions. Acquisition of vacation homes or secondary residences either limited or impossible.
  2. Notification of property usage. The proprietor is obliged to submit the paper characterizing real estate category of residence: main or secondary. If after ratification local authorities find out that they have been misinformed than the owner must reimburse penalty up to 25 000 Euro. As an extended sentence in the severest cases constrained sale of the property can even be produced in a compulsory way.

However, in the majority of the provinces any person wishing to register secondary residence in the community is limited only by the areas available for that. Local zoning plans regulate the forms of usage, i. e. whether a place may be adapted for vacation or not. Totaled up, the restrictions related to a secondary residence are severer in the western regions of Austria, than in the eastern.

Real estate for rent

The same as temporal residence rental properties implicate duration of the landlords' stay and living agreed beforehand (several days/months a year). The rest of time a dwelling will be occupied by leaseholders. All rental duties are undertaken by the Homeowners Associations (Hausverwaltung). Finding tenants also occurs via official internet sites all over the world.
Apartments in Werder Six
Before entering into a contract, the landlords are advised to visit local Municipality (Gemeinde) and to obtain the book Kurtax. It acts as an NCR consignment note duplicate and should be filled in by the tenants while deducting tourist tax. The book costs about 5 Euro. Presently tourist tax amounts to 1,25 up to 1,50 Euro per person over 15 years old. Also, the guests may be registered online though the landlord has to get entry codes at the respective Municipality beforehand.
Bear in mind, that some apartments can not to be categorized as "secondary residence" and you will not be able to lease them for short periods of time, but for long-term only. Since the 1st January of 2008 the act has come into force prohibited rental without the other owners of the building approval. All ends and outs can be cleared out by a notary during purchasing. Simultaneously he will check any other rules settled by the Homeowners Association. We recommend to make a request for a copy of these rules before acquisition.
Conclusion

  1. Austria is considered as one of the safest countries for real estate investments.
  2. Such a placement of funds provides solid capital gains from rent.
  3. Investments in property upgrade credit rating in the state financial establishments.
  4. Austria offers lucrative possibilities for investing or setting up one's own business, what helps to be granted with a residence permit.
  5. After uninterrupted 6 years of legal inhabitance in Austria it becomes possible to apply for residence permit.
  6. Dual industry-specific education imposes study at technical vocational schools and at an educative enterprise. Getting practice at an enterprise also includes blocks of general educational program, takes 3 years and involves more than 70% of professions.
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