Property tax in Austria
for non-residents






Posted on 06.02.2020
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Austria has become a popular place for a living, getting education and resort-style relaxation. The constant growth of property prices can confirm that. The prices have increased by 50% over the last decade. While featuring top quality standards of living, well-developed infrastructure, reliable social security system, high level of education, healthcare and culture, there is no wonder Austria is considered to be world's best livable country.

Such services and facilities are funded through income from fees. In Austria, everyone including non-residents are obliged to pay taxes in accordance with national legislation. Austria has eurocontinental taxation model with large social security contributions.
Property tax in Austria for non-residents

One-time Expenses

Property prices in Austria are no lower than in any other European country. There are some legal restrictions for non-residents who wish to buy property in Austria. Only legal entities and residence permit holders can buy property in Austria. Tax legislation in Austria is very specific too so let's sort all the things out.
If you wish to buy or sell property in Austria, it is better to calculate all the expenses beforehand including:

  • legal services cost 1-3% of a property value;
  • real estate agent commission is 3% if property value is above 48,448 euros, or 4% if property value is below 36,336 euros, or 1,453 euros if property value is between 36,336 and 48,448 euros;
  • legal fee, notary fee and stamp duty cost from 1 to 2.5%;
  • document submission service and tax accounting service fees shall be agreed between the parties;
  • any other taxes and duties appliable at property location.
It is strongly advisable to let legal specialist help you with contract formation and other paperwork since every form must be filled and applied according to the State's rules.

Real estate purchase tax in Austria

When buying a house or an apartment in Austria one should be ready for approximately 10% of property value must be paid as taxes, fees and commissions for legal counsel and other specialists.

When buying a property, the customer pays:

  • 3.5% real estate transfer tax (2% if transfer between related parties takes place);
  • 1.1% real estate title registration duty to Land Register. Does not apply to a property for educational, scientific, medical and charitable purposes;
  • 3.5% land acquisition tax. Does apply to any type of property.
Property tax in Austria for non-residents
Some taxes are reduced for non-cash payment (via credit or debit card). For example, registration duty is reduced from 62 to 44 euros if paid cashless. A 1.1% building permit fee is reduced by 22 euros if paid cashless

Primary property

Value-added tax on real estate is 20%. It is already included in property price when buying a property for personal use and can be returned partially in three years. Property owners can claim back the 20% VAT if they lease the property. However, the rental income will be taxed at the rate of 25% in this case. Be advised that tax authorities could send an inspection to investigate the targeted use of the property.

Property for sale

Net income from selling a property by will also be taxed as business income at the tax rate of 25% (plus 20% VAT).
Profit on the sale of a property is taxed at 34% during the first 10 years of ownership. Thus, the Austrian authorities ensure that the real-estate market do not suffer from fake demand.

Property Maintenance

In apartments, property tax as well as utility fees is already included in monthly invoice. Apart from water, gas, electricity, internet access and telephone costs, one must pay TV license fee – 25 euros for each TV set within the house. The household expenses are agreed between residents. In private residences, property tax amount is based on cadastral value of a plot.

Rental Income Tax

The standard corporate income tax rate is 25%, which is levied on net income. A net income is an entity's income minus expenses, amortization and interest.

Contract fee for fixed-term tenancy or leasing agreements is 0.8-2%.

The legal rights of tenants and lessors are guaranteed by the law of Austria. States of Austria are able to set min and max rental rates.
Property tax in Austria for non-residents

Ownership Taxes

There is no regular tax on buildings in Austria. Instead, Austria has land tax called "Grundsteuer". It is calculated on estimated land value, which is a lot lower than market value. For apartments, this tax is quite low (100 euros per year) and is included in the monthly bills. Some public institutions including schools, nursery schools, sport facilities, medical and charitable institutions. For houses, this tax depends on cadastral purpose and actual use of land.

Inheritance Tax

For transfers between family members, the applicable property tax (Grunderwerbsteuer) rate is lower than standard rate and varies depending on the property value and degree of kinship.
Conclusion

  1. The amount of money spent on taxes on the purchase of real estate will be 10% of the value of the property.
  2. In some cases, fees and duties are decreased if paid cashless. For example, registration duty is reduced from 62 to 44 euros.
  3. If you rent out your Austrian property, the rental income is taxed at 25% rate.
  4. Beside paying regular monthly bills, the homeowner must pay for extra home appliances. For example, the second TV set will cost additional 25 euros per month.
  5. Stamp duty is levied on lease contracts. Stamp duty rates range from 0.8% to 2%.
  6. Non-EU citizens needs special permission to purchase property from a territorial commission.
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