A Guide to buying a Property or Real Estate in Austria
Real Estate Buyers Guide for Austria
Population: 8.3m
Currency: Euro
Capital: Vienna
Exchange Rate: Click here for exchange rate details
Successfully Buying a Property in Austria
Overview
In considering an overview of real estate in Austria, the most striking fact associated with real property in that country is the fact that overall the costs associated with property in Austria is higher than any other country in Europe. In addition, the cost of living in Austria generally is higher than any other country in Europe at the present time.
With this in mind, it is also important to note that the tax rate in Austria when it comes to the buying and selling of real estate in that country also runs rather high. For example, any capital gains that are experienced on the sale of property are taxed in Austria as regular income at the significant rate of 34%. There are exceptions to this taxation. First of all, a piece of real estate that is used as a primary residence is exempt from this tax. Additionally, all real estate that is held for ten years or more is exempt from this taxation as well. Therefore, many people, including foreign nationals, hold on to investment real estate for at least ten years before turning around and selling the property for a profit.
Historically, Germans have been the primary group of foreign nationals that have taken to purchasing real estate in Austria.
Investment Property and Real Estate in Austria
As will be discussed in greater detail later, overseas investors have a history of investing in real estate in Austria. In recent years, significant steps have been taken and made to streamline and simplify the manner in which foreign nationals can invest in property in Austria. This is particularly true when it comes to foreign nationals from the countries that make up the European Union.
A foreign buyer that is interested in investing in real estate in Austria needs to keep in mind that the cost of real estate in that country is higher than in any other country in Europe. Thus, for the most part, individuals who find themselves investing in Austria tend to be a bit better heeled and tend to have a higher amount of disposable income.
The tax implications of buying and selling property in Austria also need to be kept in mind when it comes to a foreign national making an investment in that country. These implications are set forth and discussed previously.
Residential Real Estate - Single Family Homes in Austria
Foreign buyers do make the purchase of single family homes and dwellings in Austria with some regularity. Far and above, the greatest number of foreign nationals who are purchasing single family residences in Austria are Germans. Italians are coming in at second place with citizens from other EU nations coming in rather far behind. Of course, there are some people from other nations that are also making the purchase of single family residences in Austria.
Most people who are foreign nationals who are purchasing real estate in Austria are doing so to establish second homes. For the most part, these homes are being used as retreats and for holiday purposes.
Residential Real Estate - Apartments for sale in Austria
Some buyers have taken to purchasing apartments in various locations throughout the country of Austria. For the most part, these buyers are purchasing these apartments in the more urban areas in the country. In addition, some overseas buyers are found to be purchasing apartments in some of the resort communities in that country.
Apartments in Austria do not necessarily come cheaply. Indeed, as has been referenced elsewhere, the cost associated with real estate in Austria tends to run far higher than what is found in other countries around the world.
Vacation and Holiday Property in Austria
Austria is a prime holiday spot in the European community in this day and age. Indeed, Austria has been a haven for travellers and tourists for many, many years. With this in mind, a goodly share of the real estate that is trading on the marketplace at this point in time involves property that is intended for vacation and holiday purposes.
Many foreign nationals who are purchasing vacation or holiday real estate in Austria actually are finding these purchases to be rather lucrative. For example, these foreign nationals are buying real estate -- purchasing vacation properties -- that they then utilize in part for their own holiday purposes. However, in addition to using these properties for their own personal holiday purposes, many foreign nationals have commenced the practice of renting or leasing these properties to other people. It is this letting process that has proven profitable over the course of the past couple of decades for an ever growing number of foreign buyers.
Most real estate experts who have spent any time analyzing and considering the market in Austria have concluded that this trend will continue well into the future. Because buying and then renting vacation property has proven to be a solid and profitable investment for so many people, even more foreign nationals are attracted to such real property ownership all of the time. This factor, coupled with the tax benefits to be realized by holding onto real estate for a period of at least ten years, has rendered these investments truly sought after at this point in time.
Specific Steps to Buying Real Property in Austria
There are some restrictions on the manner in which foreign nationals can purchase and possess property in Austria. Indeed, historically there were some more significant steps that a foreign national had to undertake in order to be able to buy and own real estate in the country. However, in recent years, there has been a general relaxation in regard to the laws that govern the foreign ownership of real estate in Austria.
The most significant changes and relaxations in the laws pertain to foreign nationals from the European Union nations. Simply, since the formation of the EU and since Austria's reception into the EU, any foreign national within the EU can purchase real estate in Austria with ease. Indeed, for all practical purposes, at this juncture, a citizen from the EU stands in essentially the same position that a citizen of Austria stands when it comes to the purchase and ownership of real estate in that country.
When it comes to foreign nationals from non-EU nations, there remains one rather significant restriction on the ability of these foreigners to buy and own real estate in Austria. In short, before a foreign national from a non-EU can purchase in Austria, that person must obtain permission from the local authority office in the locality in which the property is situated.
Generally speaking, approval from the local authority is easy to come by and will be granted in the vast majority of instances. Additionally, this approval normally is forthcoming in a very short period of time.
Once a foreign national has identified a piece of real estate that he or she is interested in purchasing, an oral offer is made to the seller. If the seller accepts the offer -- or, if the seller puts forth a counteroffer that is acceptable as such to the buyer -- a purchase agreement is prepared. In Austria, more often than not, a solicitor or lawyer handles the affairs associated with the buying and selling or real estate.
As a matter of normal routine, the buyer will post a deposit in the amount of 10% at the time the purchase agreement is executed. The deposit will be held in escrow, pending the completing of the sales transaction itself. If the sale falls apart through no fault of the buyer, the buyer will have his or her deposit returned.
When the completion date rolls around, the seller will be responsible for making certain that all contract provisions that apply to him or her have been satisfied. More often than not this primarily includes making certain that the property is free from any encumbrances that might interfere or impede the conveyance of the real estate to the buyer.
At the time of the completion date, the buyer will need to have his or her financing or mortgage in place and in order. At the time set for the completion of the transaction, the buyer will pay the remaining balance due and owing on the purchase agreement. Once this payment is made, ownership of the real estate will transfer by operation of Austrian law to the buyer. However, the new ownership of the real estate -- the ownership of the buyer in the real property -- will need to be registered with the Austrian Land Registry.
The process of fully registering the property with Austrian Lad Registry can take up to three or four months in some instances. It is not a quick process.
When it comes to obtaining financing for the purchase of real estate in Austria, Austrian banks generally will lend money to citizens of that country and foreign nationals alike. Alternatively visit our Mortgages section for further details on obtaining a mortgage for property in Austria.
Property Prices in Austria Guide
Range Varies, for example:
From £50,000 / £79,500 for a studio apartment
From around £70,000 / £93,500 for a small apartment
From £80,000 /£111,000 and up for a larger apartment
Detached homes from £180,000 / £250,000
Where to buy Property in Austria
Austria boasts some of the best ski areas in Europe and as such these areas are popular with foreign buyers, especially as holiday homes. The main areas of population in Austria remain around the Innsbruck, Salzburg and Vienna regions which make up about 70% of the total population.
Cost of Living in Austria
Austria has always remained high in the table of cost of living like its neighbour Germany. However with its entry into the EU, the price of imported goods is starting to show a reduction in the countrys frontline costs thus reducing the average cost of living.
Solicitor / Lawyer
An Austrian solicitor/lawyer would normally be employed to handle the sale and buying contracts. Most reputable practices have someone who speaks good English.
Fees
The standard % usually works out at approximately 10% of the sale price, this is made up of property transfer tax of 3.5% and notary fees around 3-4%. Property registration around 1% with stamp duty 0.5-1%, the land registry fees averaging a payment of around £300 / £420.
Property Tax
Will be between 0.5-1% of the properties assessed value and should be lower than the market sale value.
Wealth tax of 1% of your net worth irrespective of your resident status is charged for Austrian property owners.
Mortgages
Can be arranged through either international brokers or from an Austrian banks for both residents and non-residents with variable interest rates and payment terms being available. See our Mortgages Link
For more information on buying property in Austria, please contact the Real Estate Agent in question or visit the
Austrian Government website:
For more information on Austria Property visit our Agents Page
Austrian Embassy
18 Belgrave Mews West
London
SWIX 8HU
Tel: +44 (0)207 235 3731
Fax: +44 (0)207 344 0292
Email: information@austria.org.uk
Website: www.austria.org.uk
