A Guide To Buying Apartments In Vienna, Austria

If you're considering buying an apartment in Vienna, Austria, there are a few things to keep in mind. Firstly, real estate in Austria, particularly in Vienna, is considered affordable compared to other parts of Europe. The high quality of life, excellent medical care, breathtaking scenery, and stunning architecture make it an attractive place to invest in property. When purchasing an apartment, you'll need to be aware of the additional costs, which can range from 5% to 11% of the purchase price, including taxes, legal fees, and real estate agent fees. It's also important to note that as a buyer, you will need to obtain permission from the municipality and ensure that your purchase does not negatively affect national interests.

Understanding the property market

Austria's housing market is currently slowing, with the residential property price index falling by 2.35% in Q4 2023, marking the third consecutive quarter of year-on-year decline. This is in contrast to previous years, which saw strong increases in property prices. Vienna, in particular, saw a decline in house prices, with a 3.01% drop in Q4 2023 compared to the previous year.

Despite this recent dip, Vienna's property market remains dynamic. The average real estate price in Austria is €4,611 per square meter, with the highest prices found in Vorarlberg and Vienna. In January 2024, apartments in the First District, also known as "Innere Stadt" or "Inner City", cost on average around €19,907 (US$21,453) per square meter. This area, a UNESCO World Heritage Site, is the center of Vienna's luxury and secondary home market.

The luxury apartment market in Vienna is highly exclusive, with a limited supply of properties in prime locations, resulting in surging prices. In 2023-2024, some properties were listed between €3 million and €8 million, while the average price sat at €1.5 million.

Apartment prices in Vienna experienced a slight dip in 2024, with costs ranging between €6,100 and €6,310 per square meter. However, the overall market remains lively, with increasing transaction volumes for both apartments and single-family homes. The mortgage market in Austria is also showing a slight uptick, with the average price per square meter rising by 1.1% in the first quarter of 2023 compared to the previous year.

In terms of the broader market, there is a high demand for rental properties in Austria, with about 75% of homes rented in Vienna and 41.2% rented nationwide. This is due to several factors, including the large proportion of subsidized low-rent apartments and limited tax incentives for homeownership.

When considering a property purchase in Vienna, it's important to understand the impact of location on apartment size and pricing. Additionally, the availability of skilled labor can affect renovation costs, as high demand for craftsmen can lead to increased labor charges.

For those looking to buy property in Austria, it's worth noting that the sale of real estate to foreigners is limited, and permission from a municipality is required. The possibility and conditions of purchase vary depending on the region. While EU citizens can generally buy property without restrictions, non-citizens will need to obtain a residence permit, which requires living in the country for at least 183 days per year.

Mortgages, refinancing, and insurance

When it comes to buying an apartment in Vienna, Austria, there are a few things you should know about mortgages, refinancing, and insurance.

Firstly, mortgages in Austria typically finance up to 70% of the property value, with fixed-rate mortgages being the most popular. The interest rates offered by Austrian banks range from 2% to 4%, which is favourable compared to other countries. The loan term usually lasts between 15 and 30 years, with 20 years being the most common. It is worth noting that if you are not an EU citizen, obtaining a mortgage in Austria can be more challenging. Lenders may view you as a higher risk borrower and will carefully assess your financial profile and ability to make future payments. Additionally, you must obtain a special permit from the local Land Committee (Grundverkehrskommission) for property acquisition, indicating your intended use for the property.

In terms of refinancing, it is possible to refinance property in your home country and use the proceeds to purchase Austrian property. This can be a viable option if you are from outside the EU and face a more complex and lengthy mortgage application process in Austria.

Home insurance is mandatory for real estate in Austria and is a condition of your mortgage. This insurance will cover any damage to your apartment, as well as liability. Additionally, you may want to consider Haushaltsversicherung (household insurance) for more comprehensive coverage.

It is also important to be aware of the associated costs when purchasing an apartment in Vienna. On top of the purchase price, you can expect to pay between 5% and 11% in additional fees, which include transfer taxes and special fees. Don't forget to factor in the cost of lawyers, real estate agents, and financing, which can add up to approximately 10% of the purchase price.

Planning permission and local authority requirements

When buying an apartment in Vienna, Austria, there are several planning permissions and local authority requirements that you should be aware of. Here is a detailed overview:

Planning Permissions:

• As a buyer, you have the right to make minor changes to your property without seeking approval. This could include removing freestanding walls or installing an oven.
• For more significant alterations, such as installing a second entrance door or constructing a terrace on a flat roof, you will need the approval of other owners in the building, especially if their interests or safety are concerned, or if the changes could potentially damage the building or alter its external appearance.
• In some cases, you may also need the approval of the respective building authority for certain types of work.
• If you intend to reclassify your apartment, such as converting it into a doctor's practice, you will need the agreement of the other owners in the building.
• If you plan to use your apartment as a permanent residence, you must inform the authorities before making the purchase. Failure to comply with this regulation can result in a fine of up to EUR 25,000.
• If you are considering building your own home, you will need to obtain a permit, which can take up to six months. The regulations for obtaining a permit vary depending on the Austrian province. However, if your country has a bilateral agreement with Austria, you may not need a permit.

Local Authority Requirements:

• To finalise the purchase of a property in Austria, you will need to involve a notary public or lawyer. They will assist in drafting the purchase contract and ensuring that all the necessary documents are in order.
• When purchasing an apartment, you will need to register the transaction in the land registry (Grundbuch). This process is administered by the local district court (Bezirksgericht).
• Along with the application for the land registry, you will need to submit several documents, including the purchase agreement with all the necessary signatures, a clearance certificate (Unbedenklichkeitsbescheinigung) from the tax authority (Finanzamt), proof of citizenship or approval from the Municipal Office MA 35 if you are a third-country national, and a statement by the building authority or an expert report on the existence of independent freehold apartment units.
• If you are a non-EU national, you may need to obtain a special permit for property purchase from the local land committee, indicating whether the property will be used for residential or commercial purposes.
• If you are purchasing a new property as your permanent residence, you will be subject to a 20% Value Added Tax (VAT). However, if you plan to rent out the property, you will not be charged this tax.
• As a foreign buyer, you should be prepared for some hurdles and varying regulations depending on your nationality. The Austrian government approves purchases by individuals from third-party countries if they are of cultural, social, or macroeconomic interest and do not negatively affect national interests. Therefore, consulting local authorities on a case-by-case basis is essential.

Additional costs and fees

When buying an apartment in Vienna, Austria, there are several additional costs and fees to consider beyond the purchase price. Here is an overview of the potential additional costs and fees:

Notary Fees

The services of a notary public are necessary for finalizing the purchase of a property in Austria. The notary fees amount to approximately 1-3% of the purchase price, with some sources specifying 1.5-2% plus 20% VAT. These fees are typically paid by the purchaser after the contract of sale has been signed.

Land Registry Fees

Entering the ownership title in the land register incurs additional costs. There is a fee of 1.1% of the purchase price for registering the ownership title. If you are mortgaging the property, there is an additional fee of 1.2% of the value of the right of pledge for its entry in the land register. There is also a registration fee of €47 or €66 if the application is not submitted electronically.

Transfer Tax

Real estate transfer tax in Austria is typically 3.5% of the purchase price. This is sometimes referred to as "Purchase Tax" or "Stamp Duty".

Agency Commission

Real estate agencies in Austria typically work on a commission basis. The agency commission is usually 3% net plus 20% VAT, resulting in a total of approximately 10%.

Legal Fees

Legal fees can amount to approximately 10-11% of the offer. It is recommended to consult a lawyer or notary public to ensure the purchase agreement is properly prepared and registered.

Utilities

As the owner of an apartment in a multi-apartment building, you will be responsible for paying land tax for the plot on which the building stands. This tax is included in your monthly utility bills and is approximately €10 per month for an 80 m² apartment. Water, electricity, and gas are paid by meters. If your apartment has individual heating, you will only be charged for the energy source (e.g., gas or electricity) used by the boiler.

Other Costs

Other potential costs to consider include court costs and administration fees, which can reach approximately €400-€550. Additionally, if you are a foreign citizen, it is recommended to seek specialized legal services, which may incur additional fees.

The purchase process

Research and Consult Professionals:

Before starting your search, it is essential to understand the market and the purchasing process. Consult a legal professional and a financial advisor to guide you through the complexities of buying property in Vienna. A good financial advisor can help you navigate the banking system and provide valuable insights into billable payments and associated costs.

Understand the Market and Costs:

Study the real estate market in Vienna to identify the right locations and prices. Compare asking prices with similar listings and the current real estate index, which provides average prices for different districts in Vienna. Be aware of the additional costs involved in the purchase, which can range from 10% to 15% of the purchase price. These costs include lawyer or notary fees, taxes, real estate agent commissions, and financing charges.

Obtain Necessary Permits:

If you are a foreigner, it is important to note that there are restrictions on the sale of real estate to non-Austrians. You may need to obtain permission from the municipality and meet specific conditions, which can vary by region. In some cases, you might be required to have an Austria residence permit, which entails living in the country for at least 183 days a year.

Draft and Review the Contract:

Engage a notary or lawyer to draw up the purchase contract. Ensure that the contract includes all the necessary details, such as the exact size of the apartment and common areas, as outlined in the land register (*Grundbuch*). Understand your rights and duties as specified in the joint contract (*Gemeinschaftsvertrag*), which outlines cost responsibilities for repairs and your voting rights within the housing community.

Finalize the Purchase:

After finalizing the contract, proceed with the payment, taking into account the associated costs mentioned earlier. Remember to register your purchase in the land register (*Grundbuch*) to officially become the owner of the apartment.

It is important to stay informed throughout the process and be aware of any regulations or requirements that may apply to your specific situation.

Frequently asked questions