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There are three main types of property in Austria each with their own legal status . Holiday Homes fall under two main categories which are known as “Tourist Residence” and “Second Home status” which in German translates to “Zweitwohnsitz” . The third “non” holiday type is “Permanant Residence”,specifically for those wishing to live in Austria on a full time basis and will be tax resident.The following is a brief summary of each category.
1. Tourist Residence.
These are best described as Buy to Let properties with the added caveat the owner will have a fixed amount of time ,usually between 4 to 6 weeks to use the property for their own personal use. The remaining weeks will be available for tourist use and managed by a professionally qualified management team who will handle everything from cleaning to bookings . This is a hassle free process for you the owner and a very popular option for holiday property ownership. The rental yield is normally between 4% and 6% annually depending on market conditions at the time .
2. “Second Home” (Zweitwohnsitz) .
These type of property are much sort after due to the flexibility of use . You as the owner can use the property as much or as little as you like and are free to rent it out short or long term . The authorities, especially in popular tourist regions such as Tirol and Salzburgerland have clamped down on these types of properties to avoid certain area’s becoming ghost towns as owners decide to leave them vacant 90% of the time. Luxmountain Properties always has access to a good selection of these properties , many of which don’t reach the open market.
3. Permanent Residence.
If you are in the enviable position where you could consider living in Austria full time then this is the type of property open to you. Permanent Residence Properties make up approximately 90% of properties for sale in Austria although this doesn’t mean they come cheap, especially in the most desirable areas such as Kitzbuhel and Lech amongst others.
If you are an EU citizen there are no restrictions on buying property in Austria . Non EU citizens can buy property in certain regions ( with special permission) but some of the most popular areas such as Tirol, Vorarlberg and Salzburgerland do not allow non EU buyers. Want to know about a specific area, ask on our Home Page contact box ,we are here to help.
Yes EU citizens can get mortgages in Austria subject to financial checks and status .
The three main types of mortgages available in Austria include fixed-rate, adjustable-rate and a mortgage combination which merges two mortgage loans. Austrian mortgages are always full repayment mortgages, and no interest-only options are currently available.
Standard buying fees are as follows:
1.Stamp duty 3.5%
2.Land registry fee 1.1%
3.Agency fees 3%* +VAT. (Market standard but some new build projects waive this )
4.Legal /Notary fees 1.5/2.0%
5. VAT of 20% on new build properties but in most cases this can be reduced to zero when the property is used for rentals.
It usually takes between 1-3 months to buy a property in Austria.
The process is straightforward and usually as follows.
1. Your Offer.
After signing the “Offer of Purchase ‘’ which confirms the price agreed and payment schedule, the property will be taken off of the market.
2.Documentation (Deed of Sale) takes between 2 to 4 weeks and will include a copy of land registry details , full details of the property and the payment method that will be used. If you want to purchase your new home using Crypto Currencies we can facilitate this option!
3. With regard to “Tourist Residence’’ properties a professional management company will be responsible for renting out your property. You will sign an “ Operating Agreement’’ which outlines the terms and conditions including , length of contract, agency commissions on rental income, restrictions of use ect. In addition a “Building Management Agreement” will be signed to take care of operational matters such as communal spaces , owners meetings , utilities ect .
4. The Deed of Sale will require a “certified” signature from you . However if it’s inconvenient for you to physically come to Austria you can sign at the Austrian Embassy in your own country which is authorised to certify your signature.
5. When both parties (buyer and seller ) have signed the Deed of Sale , you (the buyer ) will have approximately 2 weeks to transfer the funds including all fees and taxes in to an escrow account held by the lawyer/notary . When purchasing an “off plan” property the payments will be made in stages ,also through an escrow account . ( see off plan payment schedule below ).Following the completion of the payment the Notary will complete the property registration at the Land Registry which can take anything from 3 weeks to 3 months depending on the workload at the local authority. Finally when this is complete you (the buyer ) will receive the original copy of the Deed of Sale . Congratulations you are now the proud owner of your dream holiday home !
The payment stages can vary slightly but the below guide would be a typical example .
1. 15% at start of building works .
2. 35% when outside shell and roof is complete.
3. 20% electrical and plumbing completion.
4. 12% completion of windows
5. 12% Full completion of property
6. 4% on handover of keys.
7. 2% after two to 3 years
Developers must have the financing in place before they start construction . You will only pay for each stage payment AFTER it has been completed. New build properties in Austria usually have a 2% guarantee that is withheld for two to three years to protect the buyer against any build or other issues that occasionally occur .
In many cases there is an obligation to rent out the property at a profit, this limits the amount of private use to around 4 to 8 weeks a year from a tax perspective. Conditions set by the rental management company may vary slightly from property to property.
You can buy a property in a company name in Austria, providing the business is EU-based and that 50% of its shares are owned by EU citizens. You cannot buy an Austrian property in the name of a non-EU company.
The cost of setting up an EU company can vary on the type of company you want to set up and the country where the company is registered. We can recommend a tax advisor to help you with this process.
The benefits of buying a property in a company name in Austria include being able to purchase with multiple owners. It also allows for tax-free ownership transfers via shares. As of 2022, profits on the disposal of a property owned by a company are charged at 25% compared to 30% for an individual.
You will have to pay local property taxes in Austria, although this varies depending on the region. The government’s local tax calculator can help you find out the exact amount.
As of 2022/23, rental income tax rates in Austria sit between 20% and 50%. How much you pay will depend on the tax band you fall into.
You will need fill annual VAT returns and aim to make a ‘profit’ for tax purposes over a 20 year period.
Capital gains tax for real estate in Austria stands at 30% as of 2022/23.
If you rent out your Austrian property to guests, they will need to pay a daily tourist tax to the local council. Villages impose this tax in order to raise revenue on properties registered as holiday homes – if your property is registered for permanent residency, the tax will not be payable.
EU citizens do not need a visa or permission to stay in Austria for up to 3 months. This right exists regardless of economic activity. For stays longer than 3 months they must be employed, self employed or have sufficient funds and health insurance for themselves and their families. You must inform the local authorities if you wish to stay longer than 3 months and will receive a “ registration certificate’’ . To apply for permanent residence you must of been living in the country full time ( more than 183 days per year) for a period of 5 years .
All EU citizens can buy a property in Austria without restriction. Non-EU citizens would need to apply for a special permit at the Land Transfer Authorities, this is a lengthy process without any guarantees that would lock the property in a sale until the permit is either granted or denied.
There are no restrictions on selling your property in Austria, although you will be liable to pay capital gains tax which stands at 30% for real estate. There will also be the usual associated costs to pay, such as estate agents fees and VAT.
FINANCING YOUR PROPERTY PURCHASE.
We work directly with the best mortgage brokers in Austria who will ensure you get the very best deals to suit your requirements. Luxmountain Properties does not charge or receive any commission for this service. Of course you are free to make your own arrangements.
Luxmountain Properties endeavours to provide accurate up to date information throughout its website but all such information is for guidance only and not to be taken as fact .
All rights reserved, Lux Mountain Properties 2024-2025