Buying A House In Austria: What You Need To Know

Austria is a popular destination for foreigners looking to invest in real estate. The country boasts stunning mountain views, a vibrant cultural scene, and a high quality of life. However, purchasing property in a foreign country can be a complex process, especially when it comes to navigating the legal landscape and local regulations.

In Austria, the ability of foreigners to buy property depends largely on their nationality and the type of property they wish to acquire. EU citizens, for instance, face a relatively straightforward process, similar to that of Austrian citizens. On the other hand, non-EU citizens encounter more stringent rules and often require special approval from local governments.

Additionally, each Austrian state enforces its own regulations, and the approval process can vary significantly. This guide will explore the key considerations and procedures for those interested in purchasing real estate in Austria, ensuring a well-informed and smooth transaction process.

Can I buy a house in Austria?

EU citizens can buy property in Austria without restrictions

Firstly, it's important to note that each municipality has different laws, so it's worth checking with the individual local authority for any unique requirements. For example, in the Tyrol and Vorarlberg ski regions, only EU citizens can purchase real estate.

The process of buying property in Austria is generally quick and straightforward. It typically involves the following steps:

• Find the property you want to purchase. Online property agencies such as Rightmove, Amazing Austria, Engel and Voelkers, Savills, and Tranio are a good place to start your search.
• Make a formal offer in writing via a real estate agent.
• If your offer is accepted, organise a surveyor to check the property for any issues.
• If the property is as described, an Austrian notary will draw up a purchase agreement or sale contract.
• Once the contract is signed, the buyer may be expected to pay a 10% deposit, which is held in escrow until completion.
• The buyer will then need to pay any transfer taxes and make changes to the land registry.
• After the changes are made, the notary will release the payment from escrow and the property will be officially yours!

There are also some costs associated with buying property in Austria that you should be aware of. These typically amount to around 10% of the purchase price and include:

• Real estate transfer tax (3.5%)
• Land registration fee (1%)
• Solicitor and notary fees (2% + VAT)
• Estate agent's fee (3% + VAT)

So, if you're an EU citizen looking to buy property in Austria, the process is relatively straightforward. Just be sure to familiarise yourself with the local laws and regulations, and you'll be well on your way to becoming a property owner in this beautiful country!

Non-EU citizens need a special permit to buy property

While expats can generally buy property in Austria, there are some restrictions in place. Each municipality has different laws, and some areas are very difficult to buy property in. For example, only EU citizens can purchase real estate in the beautiful Tyrol and Vorarlberg ski regions of Austria.

The Permit

The Austrian government states that individuals from third-party countries will be approved if the purchase is of cultural, social, or macroeconomic interest. Additionally, the government adds that there must be no negative effects on national interests. Therefore, it’s best to check with the local authorities on a case-by-case basis.

Citizens of the third country intending to buy real estate should apply for approval from the Land Commission (Grundverkehrskommission). The documents can be sent online, and the application can take from 3-4 weeks to several months.

Other Requirements

Non-EU citizens will also need a residence permit in Austria to buy property. This requires living in the country for at least 183 days a year. After five years, a resident can get a permanent residence permit and apply for Austrian citizenship after another three years.

In some provinces, non-EU nationals may have to purchase a foreigner's purchase permit or the property needs to be advertised for a specific period before it can be sold to a non-EU national, so the process is complex. For non-EU nationals, a consultation with a lawyer is helpful to understand the specific requirements in each case.

You must get a residence permit to buy property in Austria

Austria is a desirable place to buy property, with its high quality of life, excellent medical care, affordable property prices, ski resorts, breathtaking scenery, and stunning architecture.

However, if you are a non-EU citizen, you must obtain a residence permit to buy property in Austria. This is because the Austrian government wants to protect its state land from speculation, and there are certain restrictions in place for non-residents.

How to get a residence permit in Austria

Firstly, it is important to note that Austria is divided into nine federal states, and each state has its own laws regarding property acquisition.

To obtain a residence permit in Austria, you must fulfil the following conditions:

• Have confirmation of financial solvency, including a bank statement from an Austrian or another internationally recognized bank.
• Have medical availability and an insurance policy for each family member.
• Have a lease agreement or certificate of ownership.
• Have a certificate of absence and a clean criminal record (none of the family members should pose a danger to the country or disrupt public order).
• Have basic knowledge of the German language (this is not necessary for children under 14 years old).

The process of obtaining a residence permit can take between 3-4 weeks and several months, and it is important to note that there is a quota for the number of residence permits issued.

Property ownership regulations in Austria

In addition to obtaining a residence permit, there are several other regulations regarding property ownership in Austria that you should be aware of:

• You must inform the authorities before the purchase if you plan to use the property as your permanent residence. Failure to comply with this regulation can result in a fine of EUR 25,000.
• There are three main forms of property ownership in Austria: Main residence/ Hauptwohnsitz, Holiday home/ Nebenwohnsit, and Tourist use/ Touristische nutzu. Each type has different regulations regarding usage and rental.
• If you are a non-EU citizen, you must obtain permission from a territorial commission (Grundverkehrsbehörde) of the municipality before purchasing property in almost every Austrian province. This process can take around 6-8 weeks.
• There are restrictions on property ownership for non-EU citizens in certain areas of Austria, such as Tyrol, Salzburg, and Vienna.
• If you are a third-country national and decide to sell your property within 10 years of the purchase date, the transaction income will be subject to income tax at a special rate.

The costs of buying property in Austria are approximately 10% of the purchase price

The costs of buying property in Austria can vary depending on the property's location and other factors. However, the costs typically amount to approximately 10% of the purchase price. Here are the costs you can expect to incur when buying a property in Austria:

Legal Fees

Legal fees for setting up the contract by a lawyer or notary can range from 1% to 3% of the purchase price, plus 20% VAT. These fees depend on the complexity and liability risk of the contract.

Property Transfer Tax

The property transfer tax in Austria is typically a flat rate of 3.5% of the property value. However, if the property is being transferred between relatives, the rate is usually reduced to 2%.

Value-Added Tax (VAT)

VAT is applicable only for newly built properties. It can be claimed back if the property is leased out, but the rental income will then be liable for VAT, plus a tourist tax of around €0.10 per person per night.

Registration Duty

The registration duty is paid to the Land Register when registering the property.

Notary Fee

The notary fee typically amounts to 2% of the property value, plus 20% VAT. The exact amount depends on the size of the property.

Real Estate Agent's Fee

In Austria, the real estate agent's fee is set by law at 3% to 4% of the property's purchase price or market value, plus 20% VAT. Both the buyer and the seller are responsible for paying this fee. Interestingly, agents receive a higher commission for properties costing less than €50,000.

Stamp Duty

The government tax on the purchase, also known as the stamp duty, ranges from 0.5% to 1% of the purchase price.

Property Registration

The property registration fee is set at 1.1% of the property value.

Mortgage Fees

Mortgage fees include a bank fee of around 1% of the loan amount and a court registration fee of 1.2% of the loan amount.

It's important to note that these costs are in addition to the purchase price of the property and can significantly impact the overall cost of buying a property in Austria. It is recommended to seek professional advice and carefully consider all the associated costs before making a purchase decision.

The average real estate price in Austria is €4,611 per square metre

Anyone can buy a house in Austria, but there are some restrictions in place and each municipality has different laws. For example, only EU citizens can purchase real estate in the beautiful Tyrol and Vorarlberg ski regions of Austria.

In 2020, there was a particularly large rise in demand for houses in green locations, especially in the areas surrounding the country's major cities. Parishes with good connections to cities such as Vienna, Graz, Linz and Salzburg have attracted greater attention. Young families with children, in particular, prefer detached houses in green locations to urban apartments.

The Austrian real estate market has been on an upward trajectory, marked by growing demand. Property prices are influenced by various factors such as location, type, and whether it is a primary or secondary unit. In 2024, people are prioritising environmentally friendly living options, including properties with solar panels and other green features. Developers are responding by using eco-friendly materials in their projects and making primary real estate that adheres to the latest eco-standards.

Frequently asked questions