Taxation in Austria if non-resident – what expenditures should be expected when buying, selling or letting property. Property maintenance – utility fees, land taxes. Inheritance tax and how it is calculated
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 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:
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.
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:
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
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.
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.
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.
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.
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.
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.