Buying Real estate can be challenging, especially in case you are a foreigner and have no knowlegde of the local rules. Foreign Real Estate Transactions, Taxes, and Second Home Restrictions: Here is what you should consider when buying property in Austria as a foreigner?
When Can a Foreigner Purchase Property in Austria?
If you are a foreigner looking to purchase property in Austria, you generally need approval from the real estate transaction authorities. Since real estate law in Austria is governed by the states, each state has its own regulations. For example, the Vienna Foreign Real Estate Acquisition Act (Wiener Ausländergrunderwerbsgesetz) applies in Vienna. Lower Austria follows the Lower Austrian Real Estate Traffic Act (NÖ Grundverkehrsgesetz). Salzburg has the Salzburg Real Estate Traffic Act (Salzburger Grundverkehrsgesetz), etc.
Depending on which real estate law applies, there are slight variations in definitions, formal and substantive requirements, deadlines, and the duration of procedures.
Foreign Real Estate Transactions in Austria
In most cases, the following principles apply:
- The applicable real estate law depends on the property’s location; for example, the Vienna Foreign Real Estate Acquisition Act (Wiener Ausländergrunderwerbsgesetz) is used for purchasing an apartment in Vienna, the Tyrolean Real Estate Acquisition Act (Tiroler Grunderwerbsgesetz) for buying a mountain cabin in Tyrol, etc.
- Foreigners are defined as natural persons with non-Austrian citizenship and companies/legal entities/associations, etc., based abroad or with foreign owners (definitions vary by the real estate laws).
- EU citizens are generally treated the same as Austrian citizens. This means they do not need a foreign real estate transaction authority’s approval to buy property.
- Non-EU foreigners typically require approval from the real estate transaction authorities (grundverkehrsbehördliche Genehmigung) to purchase property in Austria.
- Approval is obtained by filing an application with the real estate transaction authority, usually immediately after concluding the purchase agreement. The buyer can file the application themselves or have it filed by a real estate attorney. Once the application is legally approved (and all other conditions stipulated in the purchase agreement and trust agreement are met), the attorney who drafted the agreement can submit the application for registration, allowing the buyer to be registered as the owner.
- The conditions for obtaining approval from the real estate transaction authority are specified in the applicable real estate law. Typically, a social or economic interest in the transaction must be demonstrated in the application. A social interest might be intended residential use, while an economic interest could be use as an income property. Depending on the authority, different documents must be presented and facts proven.
Tip: Seek legal advice about the requirements for approval from the real estate transaction authorities. Do so before buying property in Austria as a foreigner. Also, note that in Austria, a binding purchase agreement is already in effect once you make a (binding) offer to conclude a real estate purchase agreement and it is accepted by the seller.
Second Home/Vacation Home in Austria
The main residence is where you have the “center of life relationships” (e.g., work, family). A secondary residence or vacation home is a residence related to other life relationships (e.g., studies, temporary work, leisure stays). You must register both the establishment of a main residence and a secondary residence. This registriarion must be done within three days at the registration office.
In some, particularly tourist-attractive municipalities, there are restrictions on secondary residences. This means you can only acquire a second home in certain designated areas or under certain conditions. Many restrictions apply both to personal use as a second home and to rental for vacation purposes. Some municipalities also impose a second home tax.
Tip: Inquire whether there are restrictions on acquiring second homes in the respective municipality. This should be done before making an offer to purchase a vacation home, you should . To do so, contact the municipality or seek legal advice beforehand.
What Taxes and Additional Costs Can I Expect?
When purchasing property in Austria, buyers typically incur additional costs ranging from 9-11% of the purchase price. These costs vary. This depends on whether a real estate agent is involved, if there is external financing, or if temporary exemptions or personal tax exemptions apply (e.g., for diplomats and consuls). If you need more information on this topic check out our article on ancillary costs.
Do You Have More Questions About Buying or Selling Property?
Explore ourreal estate lawservices for any additional questions about property purchases or sales. We specialize in drafting and managing real estate contracts. We can also draft a bilingual agreement, ensuring you understand all clauses. If you are a foreigner that has no EU-citizenship we are also able to assist you in obtaining all necessary permits. Please contact us at[email protected]or by phone at +43-1-4380072.
