Buying A Home In The Austrian Alps: Is It Possible?

Dreaming of owning a home in the Austrian Alps? You're not alone. With its charming mountain villages, imposing snow-capped peaks, and friendly people, Austria is a desirable place to invest in a second home. But is it possible to buy property in the Austrian Alps as a foreigner?

The short answer is yes, but there are some important things to consider. Firstly, while EU and EEA citizens can buy property in Austria without restrictions, citizens of third countries (non-EU and non-EEA) need a special permit, and the regulations for obtaining this permit vary by region. For example, in the popular alpine regions of Tyrol and Vorarlberg, only EU citizens or those registering a purchase for a European company can buy property. British citizens, now classified as third-country nationals post-Brexit, face significant challenges when trying to purchase property in these areas.

If you are eligible to buy, the next step is to research the various regions within the Austrian Alps, such as Salzburg, Tyrol, and Carinthia, and decide which area best suits your needs and preferences. The property market in the Austrian Alps offers a range of options, from quaint chalets to luxurious penthouses and apartments, with prices varying depending on the region and the specific amenities offered.

To navigate the complexities of purchasing property in the Austrian Alps, it is recommended to work with a local expert who can guide you through the legal and financial requirements, ensuring a smooth and successful transaction.

Foreigners buying property in the Austrian Alps

Foreigners can buy property in Austria, but there are some important considerations to be aware of. Firstly, if you are not an EU citizen, Swiss, or a resident of Norway, Iceland, or Liechtenstein, you will need to obtain a residence permit to buy real estate in Austria. This requires living in the country for at least 183 days per year, after which you can apply for permanent residence and then citizenship after a total of eight years.

Secondly, the sale of real estate to foreigners is limited and subject to the approval of the municipality in which the property is located. The conditions of purchase also depend on the region. For example, in the Alpine federal states of Tyrol and Vorarlberg, you must be an EU citizen or register the purchase under a European company.

For EU citizens, buying property in Austria is relatively straightforward, although there are some strict rules regarding the use of certain types of properties, which apply equally to Austrians and other EU citizens.

Since Brexit, British citizens have found it nearly impossible to buy property in many popular alpine regions of Austria. However, there are some exceptions, such as properties with "second home status" or "Zweitwohnsitz", although these are rare and usually located in small villages in the Salzburg province. It is also possible to buy property held in a UK Ltd or another EU company structure, or by creating a new company with at least 50% EU citizen shareholders.

The process of purchasing property in Austria involves making an offer (Kaufanbot), which, once signed, is legally binding. The next step is to instruct a local notary or lawyer to draft the purchase contract (Kaufvertrag). The same notary or lawyer typically acts for both the buyer and the seller. Once the draft contract is approved by both parties, it must be signed and legalized, which can be done at a notary's office in Austria or at an Austrian embassy or consulate.

The average real estate price in Austria is €4,611 per square meter, with the lowest prices found in Burgenland and Styria, and the highest in Vorarlberg and Vienna.

The buying process

The first step in the buying process is to select the optimal Austrian resort for you. Austria is divided into nine federal provinces, each with its unique characteristics, from language dialects to culinary specialties, customs, and local laws. Most ski areas are located in Salzburgerland, Styria, Tyrol, Vorarlberg, and Carinthia. Consider the size of the ski area, the distance to airports, and the seasonality of the resort.

Once you have chosen a region, you can start researching properties. If you are a non-EU citizen, you may need to obtain a special permit to purchase property, so it is advisable to apply for this before starting your property search.

When you have found a property you wish to make an offer on, a 'Kaufanbot' or buying offer is drawn up, detailing the buyers and sellers, the purchase price, and any special conditions. Once both parties have signed the 'Kaufanbot' agreement, it is legally binding.

At this point, your agent will instruct a local notary or lawyer to draft the purchase contract or 'Kaufvertrag'. The notary or lawyer acts for both the buyer and the seller in the purchase process. Once the draft purchase contract is approved by both parties, the seller and buyer will need to sign the same official version of the purchase contract, legalizing their signatures. This can be done at a Notary's office in Austria, your local Austrian embassy or consulate, or with a non-Austrian notary.

You become the legal owner of the property once the contract and all the additional paperwork have been signed and returned to the notary or lawyer, and the financial stipulations in the contract are met. If you are purchasing off-plan, payments will be made in stages, corresponding to the progression of the build, and will be independently certified.

Payments are always made into an escrow account and will be released by the notary or lawyer as each stage of the construction is completed. The purchase costs typically include notary fees (2% + VAT), land registry fees (1.1%), and agency fees (3% + VAT, waived in some new developments).

It is worth noting that there are strict rules governing how certain types of properties can and cannot be used, and these rules are the same for Austrians and EU citizens. Each property in Austria has a defined legal status, such as "Permanent Residence," "Tourist Residence," or "Second Home," which determines how the owners are allowed to use the property.

Overall, the property purchase process in Austria tends to be straightforward and quick, especially in new-build projects. However, there are regional variations that buyers may find confusing, so it is essential to understand the regulations of the specific area you are interested in.

The cost of buying property in the Austrian Alps

The Austrian Alps cover several regions, including Tyrol and Vorarlberg, and the federal state of Salzburg. The cost of buying a property in the Austrian Alps varies depending on the region and the type of property.

Tyrol and Vorarlberg

Tyrol and Vorarlberg are home to some of the most famous ski resorts in Austria, including Kitzbühel, Lech, St. Anton am Arlberg, and Sölden. Properties in these regions tend to be on the higher end of the price spectrum, with luxury homes commanding high prices.

Salzburg

The Salzburg region, known for its ski resorts such as Zell am See, Kaprun, and Saalbach-Hinterglemm, offers a range of property options. Prices in this region can vary, with some areas, like Bramberg, starting at €450,000 for apartments, while more exclusive resorts like Lech-Zurs have properties starting at €765,000.

Other Regions

Other regions in the Austrian Alps include Carinthia, Styria, and Innsbruck. Carinthia offers new family townhouses with gardens and parking, with prices starting at €130,000. Styria is known for having some of the lowest property prices in Austria.

Costs and Fees

In addition to the purchase price, there are several costs and fees associated with buying a property in Austria. These include:

• Purchase tax or 'stamp duty': 3.5% of the gross price
• Registration in the Land Registry: 1.1% of the gross price
• Notary fees: 1.5% to 2% of the gross price
• Court costs and administration fees: approximately €150
• Real estate agent's fee: 1.5% to 2% (+20% VAT)
• Property transfer tax: €120 per signature (+20% VAT)

Overall, the purchase costs for buying a property in Austria are roughly 6.6% of the gross purchase price.

Financing options

If you are an EU citizen, buying property in Austria is relatively straightforward. You can buy anywhere in the country, and there are no restrictions on homeownership, regardless of whether you wish to purchase to live in the property, rent it out, or use it as a second or holiday home. Citizens of other countries that belong to the EEA (European Economic Area) and Swiss citizens can also buy property in Austria, although additional paperwork is required.

Non-EU citizens cannot buy property in several provinces, including Vorarlberg, Tyrol, and Salzburgerland. In other 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 more complex. For non-EU nationals, a consultation with a lawyer is helpful to understand the specific requirements in each case.

It is possible to finance your Austrian property via a mortgage. Banks in your home country may or may not be able to provide a mortgage against a property located in Austria. Alternatively, you can take a mortgage from an Austrian bank against your new Austrian property. Sometimes, developers have a financing partner to assist buyers—usually a local bank that is familiar with the project and can offer attractive terms and speed of process.

Mortgage terms are typically up to 60% of the gross property price (excluding ancillary purchase costs and fees) and up to 20 years of principal and interest repayment. The bank will typically charge you a mortgage arrangement fee and a property appraisal fee. You will also have to pay a fee of around 1.2% for the registration of the mortgage in the Land Registry. Interest rates tend to be around 2-3% per annum.

If you are buying high-value property in Austria, it is advisable to think about property financing early. At this level, you are unlikely to secure the best deals on the high street, and the more expensive the property, the more you will benefit from a financing package that is tailored to your needs.

If you are buying property in Austria as a non-resident, things can be more complicated. Austrian lenders tend to prefer lending to EU citizens; if you are a citizen of a third country, getting a mortgage from a domestic lender is rarely straightforward. Domestic lenders will generally offer finance to anyone buying property in Austria as a foreigner, although most of this will be mainstream property at middle-market prices.

In the past, Swiss private banks were the first port of call for high-value Austrian mortgages. The Swiss franc is stable, and interest rates were often lower than those offered by Austrian domestic banks. However, these mortgage products are no longer offered to middle-market borrowers. With the ECB offering 0% interest rates, cheap finance is now available more widely.

If you want to borrow from a private bank when buying property in Austria, you will likely get the best rates and terms when you opt for an individually negotiated offer. In many cases, you may get the best finance if you place assets under management with a private bank. That said, this is not the only route to competitive mortgage rates. If you have diverse assets and are highly liquid, your broker may be able to negotiate a mortgage with a private bank that doesn't require you to place assets under management.

Property types

There are several types of properties available in the Austrian Alps, catering to different preferences and needs. Here are some of the common property types you may consider:

• Apartments: Apartments in the Austrian Alps offer a convenient option for those seeking a modern living space. They can range from affordable studio apartments to luxurious penthouses with stunning views of the mountains and lakes. Apartments are typically sold with a parking space, which can be crucial in the snowy Alpine regions.
• Chalets: If you're looking for a traditional Alpine experience, chalets are an ideal choice. These are often located in mountain villages and offer a cosy and charming atmosphere. Chalets can vary in size, from small, quaint chalets to larger chalet hotels that can accommodate multiple guests.
• Villas: For those seeking a more spacious and luxurious option, villas in the Austrian Alps provide an excellent choice. These properties often come with multiple bedrooms, scenic views, and spacious living areas. They may also include additional features such as swimming pools or large gardens.
• Mountain Lodges: For a rustic and authentic experience, consider a mountain lodge. These properties are typically located in remote areas, offering peace and tranquillity surrounded by nature. Mountain lodges can vary in size and may include modern amenities while still retaining their rustic charm.
• Houses: Detached and semi-detached houses are also available in the Austrian Alps. These properties offer a more permanent residence option and often come with spacious living areas, gardens, and scenic views. Some houses may be located near ski resorts or lakes, providing easy access to outdoor activities.
• Holiday Homes: If you're looking for a property specifically for vacations, holiday homes in the Austrian Alps offer a great solution. These properties are often located in scenic locations and can accommodate larger groups or families. Many holiday homes are pet-friendly, allowing your furry friends to join in on the fun.

When considering a property in the Austrian Alps, it's important to familiarise yourself with the different regions, such as Tyrol, Salzburg, and Carinthia, as each area has its unique characteristics, attractions, and regulations for foreign buyers. Additionally, properties in the Austrian Alps can vary in terms of their legal status and intended use, so be sure to understand the differences between "Permanent Residence", "Tourist Residence", and "Second Home" properties.

Frequently asked questions