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Austria: Inheritance how to receive, process, inherit property

How do you inherit property in Austria?

Features of real estate inheritance in Austria - how to get a foreigner to inherit. Austrian and EU laws, forms, how to inherit property - the will, the contract, by law. Mandatory share, inheritance tax. If issued to the company. First and second stages.

January 2, 2020

There are three forms of a property inheritance in Austria: by deed, by succession agreement or by law. The last option shall enter into force if the first two documents have not produced or If only a part of the inheritance is bequeathed.

The deed is written and signed in the presence of an attorney either by the testator himself or by a third person if the testator signs the will in the presence of three witnesses adding that this is his or her last will. It may be written on any piece of paper by hand or by any other means.

There is another option known as legacy or testamentary gift in which listed individuals inherit only a personal property or its cash equivalent, or specified amount of cash.

The inheritance law applies to real and personal property, plots of land, precious metals and gems, including jewelry, money saving. Apart from that, licenses and housing tenure (Wohnrecht) may also be transferred through succession.

EU Law on Inheritance of Real Estate

For foreign citizens, who buy real estate in EU countries, the inheritance rules were determined by law of the country where the real estate is located. In 2015, a law on inheritance was passed in the European Union to resolve transboundary succession. According to the law, the transfer of a property to successors is held under the rules of the owner's country of permanent residence. Moreover, the new law allows the property owner may write beforehand his or her testament and resort to the legislation of the country of which he or she is a national.

A fundamental condition of making a valid will is the presence of a notary or an attorney to document that a testator is a competent individual during the declaration of will.

The procedure for the inheritance of foreign assets in the form of real estate in Austria shall be held according to the EU Inheritance Law. The making of a will allows property owners to choose the law of the country of their nationality, whether it is a member of the European Union or not. In the absence of a testament, real estate in Austria is transmitted to the legitimate heirs under the law of the country of permanent residence of the testator.

The changes in the Law on Inheritance do not affect any taxation rule. The inheritance tax will be paid in the country where the property is located.

The order of succession in Austria

In addition to the EU law, in 2017 Austria has reformed the inheritance law. Registration of inheritance rights is produced in the interests of forced heir (children, spouses and qualified cohabitants). The law set a certain order of succession. Testator's children have the top priority inheritance rights. Parents, brothers and sisters of the whole blood have inheritance rights of second importance. Grandparents have low-priority inheritance rights.

By law, the succession process for the benefit of one of the spouses goes under the following rules:

The spouse gets 1/3 of a property, provided it is inherited together with minor children.
The spouse gets 2/3 of a property, provided it is inherited together with parents, brothers and sisters of the whole blood and without children
The spouse gets full ownership of property, provided it is inherited in the absence of other legitimate heirs.

The surviving spouse also gets the marital part of the property.

Additionally, the inheritance law in Austria has been revised as follows:

Any gift in favour of testator's former spouse is revoked (the divorce itself does not revoke the testament)
In case of the termination of adoption, the testament in favor of foster children is revoked. It could happen due to the refusal to implement parental obligation or based on the interest of children who have reached the age of 14.
Legally same-sex married couples can now inherit and bequeath property according to the inheritance law.

The Compulsory Portion Under the Inheritance Law of Austria

Every family member of a testator had the right to have a compulsory portion of the estate.

This form of a property inheritance was also changed in 2017. Rather than dividing between all the relatives of a testator, the sum of an inheritance is now split only between children and legal spouse. Moreover, the monetary payment of the compulsory share may be made in instalments. In certain cases, the compulsory portion may be paid in several years.

In Austria, under the new inheritance law, property owner can delay or even decrease the payment of children's compulsory share in his or her will if there were any irreconcilable differences between the testator and their children. In case of a willful refusal to implement family responsibilities, the disinheritance of testator's children is also an option in case of a willful refusal to implement family responsibilities.

Inheritance tax in Austria

In 2008, the inheritance tax was abolished. However, the land transfer tax calculated on the basis of the acquisition price:

The first EUR 250,000 at 0.5 %;
The next EUR 150,000 at 2%;
Over EUR 400,000 at 3.5%

Property value is calculated on the basis of the real estate price table or independent expert opinion.

What if a property is registered to a company

The company property inheritance is based on the will of the owner. If the will is not presented, the property is inherited according to the Inheritance Law of 1 January 2017.

According to the last reform of the inheritance law, real and personal property goes to the top priority heirs. The surviving spouse shares one third of the property with testator's children or two thirds of the property with testator's parents, brothers and sisters. Grandparents of the deceased are low-priority heirs. Where there are neither children nor other heirs, the spouse is entitled to the entire estate.

The compulsory portion under the inheritance law has also changed. Only children and legal spouse may have the compulsory portion of a property. If only one heir is listed in the will, the heir must pay children and spouse of the deceased the compulsory shares. The new law provides for delay paying the compulsory portion to the other beneficiaries for up to five years.

In the event that the new owner is unable to pay the compulsory portion at the end of the terms, the court commence a trial for reversing the company stock payment.

Conclusions

According to the EU Inheritance Law, the transfer of a property to successors is held under the rules of the owner's country of permanent residence
A property owner may write beforehand his or her testament and resort to the legislation of the country of which he or she is a national.
Only children and legal spouse may have the compulsory portion of a property.
Based on the acquisition price, the land transfer tax will range from 0.5% to 3.5%

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