A Guide To Buying A Home In Austria

If you're considering buying a home in Austria, there are a few things you should know. First, Austria has a stable housing market with a range of property options, from cosy apartments to wooden cabins. Second, while foreigners can buy property in Austria, the process may be more complex if you're not an Austrian citizen or a citizen of the EU, EEA, or Switzerland. In that case, you'll need to obtain an official permit, which can take up to six months. Third, be prepared for substantial closing costs, which can range from 10% to 15% of the purchase price, including taxes, fees, and other associated costs. Finally, when you've found your dream home, be ready to make a competitive offer in writing, as verbal expressions of intent to purchase are legally binding in Austria.

Requirements for foreigners

The requirements for foreigners looking to buy property in Austria vary depending on their nationality and the type of property they are interested in. EU and EEA citizens are generally granted the same rights as Austrian citizens and can obtain property without restrictions. However, non-EU citizens typically require special approval from the local government of the state in which the property is located. This is because each Austrian state has its own regulations, and the approval process can vary significantly.

In addition, foreigners seeking a property loan in Austria will generally need a valid residence permit, proof of income, and a good credit history. They may also be required to make a down payment on a certain percentage of the property's value. It is worth noting that Austrian banks do offer mortgage loans to foreigners, but the conditions, requirements, and rates may differ from those for locals. For example, you may be asked to provide more extensive documentation as part of your application, such as valid ID, proof of salary/employment, and the details of the property you are buying.

It is also important to note that the purchase of agricultural land by foreigners is often subject to stricter controls and can be more challenging to obtain approval for. Residential properties are usually more accessible for foreigners to purchase.

Before entering into any agreements, it is essential to familiarise yourself with the local customs, regulations, and legal requirements. It is recommended to seek legal advice and thoroughly research property laws and tax regulations in Austria.

When a property has been selected, a formal offer is made in writing via a real estate agent. If the property is as described, a purchase agreement or sale contract is drawn up by an Austrian notary. The buyer may then be expected to pay a deposit, typically around 10% of the purchase price, which is held in a trustee or escrow account until completion. Upon completion, changes will be made to the land registry, and any transfer taxes and final sales prices must be paid.

Property prices

When purchasing property in Austria, there are additional costs to consider, including closing costs, which can range from 10% to 15% of the purchase price. These costs include the land registry fee (1.1% to 2.3% of the purchase price), taxes on the purchase of real estate (3.5% of the purchase price), and the commission for the real estate agent's fee (3% to 4% of the purchase price). It's also important to note that Austrian banks may require a down payment of around 40% of the purchasing price when providing a loan for a home purchase.

Before making an offer on a property, it is essential to compare the asking price to the current real estate index and similar listings in the area. When a property has been selected, a competitive offer or bid must be made in writing, either directly to the seller or through a real estate agent. It is important to be committed to buying before expressing interest, as a verbal expression of intent to purchase can be legally binding in Austria.

Additional costs

When purchasing a home in Austria, there are several additional costs to consider on top of the property's purchase price. These can amount to substantial closing costs, typically ranging from 10% to 15% of the purchase price. Here is a breakdown of the potential additional costs:

Transfer Tax and Special Fees

Buyers of real estate in Austria are subject to a transfer tax, which is typically around 3.5% of the property's purchase price. However, the associated costs, including special fees, can range between 5% and 11% of the purchase agreement value.

Land Registry Fee

To enter your new home into the land registry, you will need to pay a fee. This fee is typically calculated as a percentage of the purchase price and can range from 1.1% to 2.3%.

Taxes on the Purchase of Real Estate

In addition to the transfer tax, you will also need to pay taxes on the purchase of real estate. These taxes are typically set at 3.5% of the property's purchase price when working with a real estate agent. However, this rate may vary if you are buying the property directly from a family member.

Real Estate Agent's Commission

The commission for the real estate agent is usually split between the buyer and the seller. By law, the agent's fee is set at 3% to 4% of the property's purchase price or market value.

Notary Fee

You will also need to factor in the cost of a notary, who will prepare the title deeds and enter them into the Land Registry. This fee can vary depending on the complexity of the transaction.

Legal Fees

There may be additional legal fees associated with the property purchase, such as the cost of hiring a lawyer to review contracts and handle the transfer of ownership.

Down Payment

Most banks in Austria will require a down payment on the property, typically around 40% of the purchase price.

It is important to note that these costs may vary depending on the specific circumstances of your property purchase and the region in which you are buying. Additionally, if you are a foreigner, there may be additional costs and requirements, such as obtaining a residence permit or providing more extensive documentation for a mortgage application.

Making an offer

When you've found your dream home in Austria, it's time to make an offer. This is done by submitting a competitive bid or offer in writing, either to the real estate agent or directly to the seller. It's important to remember that in Austria, a verbal expression of intent to purchase can be legally binding, so make sure you're committed to buying before expressing interest or submitting an offer.

Before your offer can be considered, you may be asked to provide evidence of how you'll finance the purchase. This means sharing your mortgage agreement or a letter from your bank or lender. If your offer is accepted, the next step is for both parties to sign a pre-sales contract, known in Austria as the Kaufanbot, which is legally binding. At this point, you may want to finalise the financing for your purchase with your mortgage provider.

The pre-sales contract will include an itemised list (Kostenaufstellung) of related transaction costs, such as legal fees, property transfer tax, registration duty, notary fees, and the real estate agent's fee. The real estate agent's fee is set by law at 3-4% of the property's purchase price or market value, and it is typically split between the buyer and the seller.

In addition to the property's purchase price, there are substantial closing costs, which can range from 5% to 15% of the purchase price. These costs include the land registry fee (1.1-2.3% of the purchase price), taxes on the purchase of real estate (3.5% of the purchase price), and the commission for the real estate agent.

Once the contract is signed, the buyer may be expected to pay a deposit, usually around 10% of the purchase price, which is held in a trustee or escrow account until completion.

Finalising the sale

Once you have found a property you like, you will need to make a competitive offer or bid in writing, either to the real estate agent or directly to the seller. It is important to remember that in Austria, a verbal expression of intent to purchase is considered legally binding. Therefore, you should be sure of your commitment to buying before expressing interest or submitting an offer.

Before your offer can be considered, you may be asked to provide evidence of how you will finance the purchase. This will mean producing evidence of your mortgage agreement or a letter from your bank or lender. If your offer is accepted, the next step is for both parties to sign the pre-sales contract, known as the Kaufanbot, which is legally binding. At this stage, you may wish to contact your mortgage provider to finalise the financing for your purchase.

Once your offer has been accepted and the pre-sales contract signed, the final sales contract should be signed by both parties in the presence of a notary. If you are not in Austria, you can sign it in front of official witnesses at an Austrian Embassy or Consulate. This contract will include an itemized list of related transaction costs such as legal fees, property transfer tax, registration duty, notary fees, and real estate agent's fees. The real estate agent's fee is set by law at 3-4% of the property's purchase price or market value and is payable by both the buyer and the seller.

At this stage, you will also need to arrange the transfer of the remaining balance. Once both the buyer and seller have signed the contract, the notary will prepare the title deeds and enter them into the Land Registry. The buyer may be expected to pay around 10% of the purchase price as a deposit, which will be put in a trustee or escrow account until the completion takes place. The Land Registry fee is typically 1.1% of the purchase price but can be up to 2.3%.

Upon completion, your lawyer will register the transfer details at the local registry office and pay the transfer and registration duties. Property registration costs around 4.5% of the property value. It takes an average of 9-32 days to complete all three procedures needed to register a property in Austria.

Frequently asked questions