Buying commercial real estate in Austria

Austria looks attractive with its stability, both economic and political. That is why having commercial property in Austria will always be to your advantage, but it should be understood that the purchase of objects in Austria is a difficult and sometimes long process. Nevertheless the benefits obtained are worth it. You will be provided with economic stability and always be protected by the law.

If you are a citizen of an EU country, Switzerland, or the European Economic Area,then you can buy almost any kind of property with no special visas or permits required.

If you are from a third country , it is better to prepare yourself well in advance to know all the main points and ways how to do it.

The purchase of commercial real estate in Austria by non-EU nationals is restricted. Jurisdiction regarding real estate transactions will continue to fall under the responsibility of individual provincial (Länder) governments. In general, real estate purchases by non-EU citizens are either prohibited or must be approved by a governmental commission. Any real estate agent in Austria should be able to provide you with the details of local requirements and conditions.

Territory restrictions and foreign buyers' rights

A foreigner without a residence permit in Austria or an EU country can not buy real estate in Austria. But even after obtaining a residence permit, it is necessary to get permission from the local authorities - Grundverkehrskomission.Consideration of the application and making a decision from the authorities may take from 1,5 to 3 months. Moreover, the decision is not always positive.This condition is especially strictly observed in the lands of Vienna, Tyrol and Salzburg. These are the most tourist visited areas.

But in the regions of Lower Austria, Upper Austria, Styria, Carinthia, Burgenland and in some not prestigious suburbs of Vienna, the authorities are interested in foreign investors. Also in these areas it's possible to get a residence permit after investing in local businesses.

Please note, this rule refers only to the purchase of commercial real estate.

Foreign buyers without a residence permit can only buy Austrian real estate for the company. However, 51% of the company's ownership must belong to EU citizens or EU-registered legal entities, if you don't want a complicated procedure.

Usual steps to buy a real estate property in Austria

Commercial real estate types which are able to purchase are hotels in tourist areas, mini-hotels, tenement houses, guest houses in thermal resorts, premises for offices and retail establishments in the city limits. The stages of the purchase of property in Austria for foreigners may look difficult,but it is not really so. If you follow the rules the process will go quite easy but it will take time. There are strict rights and obligations in Austria between the parties to the transaction - the seller, the buyer, the lawyer and the realtor - all them are set out in law. Every step of the transaction is clearly regulated to the smallest detail and what is even more important the law is strictly observed.

When a property has been selected, It is recommended that the buyer engages a lawyer to checking out that:

1. The property complies with the urban planning regulations of the area
2. The vendor is the registered owner in the Land Registry
3. The property is free of charges in the Land Registry and up to date in the payment of the taxes and community fees

After that should be done a formal offer in writing via a real estate agent.

When the seller accepts the offer, a purchase agreement or sale contract is drawn by an Austrian solicitor or notary. When the contract is signed, the buyer should be ready to pay 10% of the purchase price as a deposit, which is put in a trustee or escrow account until the completion takes place.

Upon completion your lawyer will register transfer detail at the local registry office and pay transfer and registration duties.

Property registration costs around 4.5% of the property value. It takes an average of 9 to 32 days to complete all the three procedures needed to register a property in Austria.

Please note that the cancellation of a deal without any costs is in most cases not possible in Austria. If investors need the option to redecide, these possibilities should be included in the buying contract.

The whole purchase process may take several months until the property is legally transferred to the new owner.

Also buyers must know according to Austrian Money Laundering Prevention Rules, lawyers, banks and notaries dealing with a real estate transaction are obliged to investigate the origin of funds to be invested in the purchase of the property. And buyers should explain why they have this amount of money.

Mortgage loan for buying commercial real estate in Austria

Non-EU and non-Austrian citizens can get a mortgage loan in Austria to buy commercial real estate.

The initial payment of the buyer must be at least 40-50%.

For the remaining amount, the Austrian Bank issues a loan for 10-20 years at 2-3% per year with the possibility of early repayment without penalties (but not earlier than one year after signing the loan agreement).In this case, the real estate is paid as collateral, the property is issued immediately, but with an encumbrance, until the full repayment of the mortgage loan. A note of the availability of credit is entered in the Land register.

Commercial real estate investment appeal

The investment markets of Austria is now a benchmark for considering effective ways to invest in residential and commercial real estate in Europe. A constantly developing economy, high demand indicators, rising prices, positive market dynamics in general and optimistic forecasts of experts – this is what attracts both local and foreign investors to the transaction.

The real estate market in Austria has been growing steadily for 40 years already. Temporary crises did not significantly affect the overall situation of dynamics and development, since the government regulates real estate purchase, sale and rental markets. Investment in commercial real estate in Austria is increasing every year, because the demand to buy commercial real estate is much higher than the offers to sell it.

For commercial real estate in Austria renting a purchased object is higher than the standard indicators for residential properties. But there are also increasing risks, since the commercial real estate market is more dependent on the economic and political situation in the country.

You can buy one apartment or a whole apartment building, a small warehouse, a room for a store, shopping center or hotel.

The main advice that experts give to investors, despite the volume of their budget, is to find a reliable real estate agency that specializes in a particular market segment.

Conclusion

• Buying real estate by foreigners in Austria is protected by law and absolutely transparent.
• A foreigner without a residence permit in Austria or an EU country can not buy real estate in Austria.
• Foreign buyers without a residence permit can only buy Austrian real estate for the company
• Non-EU and non-Austrian citizens can get a mortgage loan in Austria to buy commercial real estate.
• Each municipality sets its own requirements for non-residents and for the acquisition procedure. There are different schemes in different Federal States.
• Buyers need the lawyer's help to find the most appropriate form to interact with the authorities.
• Austria's real estate market is attractive for investors.