Leslie Massey
Austria is divided into nine federal provinces, each with its own unique landscape, language dialects, culinary delicacies, customs, and local laws. Before purchasing land in Austria, it is important to understand the legal requirements, rights, and restrictions associated with the acquisition and loss of citizen rights. Citizens of the European Union (EU) or the European Economic Area (EEA) are granted equal rights as Austrians and are exempt from the approval procedure, which is mandatory for third-country citizens. The process of purchasing land involves obtaining a current extract from the government land register, commissioning a notary public or lawyer to draw up the contract, and registering the land. Additionally, home insurance is mandatory when buying land in Austria, and there are high costs associated with fees, taxes, and mortgages.
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What You'll Learn
Understanding the legal requirements, rights and restrictions
Austria is divided into nine federal provinces, each with its own distinct landscape and set of regional laws. Before purchasing land or property in Austria, it is essential to understand the legal requirements, rights, and restrictions that apply to the acquisition of real estate. Here are some key considerations:
Citizenship and Residency
Austria's federal regulations include specific real estate purchase terms and conditions for foreigners. Citizens of the European Union (EU) or the European Economic Area (EEA) are generally granted equal rights as Austrian citizens when purchasing property. They are exempt from the approval procedure, which is mandatory for third-country citizens. Additionally, non-residents can easily buy real estate in certain areas, such as Graz, without requiring special permission. However, in popular tourist destinations like Vorarlberg, Salzburg, and Tirol, the requirements for real estate acquisition are more complicated and strict.
Land Commission Approval
Citizens of third countries intending to buy real estate in Austria must first apply for approval from the Land Commission (Grundverkehrskommission). This process can take several weeks or even months, and it is done to prevent real estate pre-emption as "the second home" by foreigners. When applying, purchasers must ratify that they are acquiring real estate for permanent residence. Failure to comply with this rule can result in a significant penalty.
Building Permissions
If you intend to construct buildings on your land, ensure you have Baurecht, a specific property right that grants owners the right to build. Additionally, there is a registration fee of 1.1% of the property value for obtaining permission to build.
Home Insurance
Home insurance is mandatory when buying a home in Austria and is a condition of your mortgage. This insurance covers damage to your property, liability, and other risks. It is also recommended to purchase household insurance (Haushaltsversicherung), which covers theft, third-party liability, window breakage, and fire or water damage.
Land Registry
To officially become the owner of a property in Austria, you must register in the land register (Modus) as the new proprietor. This process is separate from signing the purchase contract and paying the purchase price. The registration fee for the land registry is €40 if paid electronically and €56 if paid by other means. Additionally, there is a 1.2% fee for registering the mortgage in the land registry.
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The role of a notary
In Austria, notaries play a significant role in property transactions, handling legal checks and the transfer process. A notary acts as an intermediary between the buyer and the seller and is responsible for drawing up the buying contract, also known as the Titel. This contract outlines the terms of the sale, including the details of when the transfer will take place and when the purchase price is due. The notary will also submit a transfer application to the land registry, which confirms the change of ownership.
For foreign investors, payment can be made through the notary, who will release it once the entry to the land registry is made. This service costs around 4.5% of the property's value and can take between 9 and 32 days. Notary fees can vary, but they are generally required when purchasing property in Austria.
Before or after signing the purchase agreement and escrow agreement, the purchase price is transferred to an escrow account held by the Notartreuhandbank, which is opened exclusively for the business transaction. The notary then calculates the real estate transfer tax, property rights registration fee, and real estate income tax, transferring these fees to the relevant tax authority. Once the purchase price has been paid into the escrow account, the notary takes the necessary steps to process the purchase agreement in the Land Register.
It is important to note that the actual time of registration is not within the notary's control, as it is handled by the competent land register court upon the notary's application. The completion time can vary, but registration is typically expected within a period of 14 days.
Overall, the role of a notary in the process of purchasing land in Austria is crucial, as they facilitate the transaction, ensure the legality of the process, and protect the interests of both the buyer and the seller.
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Mortgages and financing
When it comes to purchasing land in Austria, it is important to be aware of the various costs involved, including mortgage fees, taxes, and other ancillary charges. Here is a detailed overview of mortgages and financing:
Before initiating the process of purchasing land or property in Austria, it is crucial to have your finances in order. This includes setting a budget, securing a mortgage offer, and determining your specific requirements. Mortgages in Austria are generally straightforward to obtain, particularly for EU citizens. However, for non-EU citizens, the process can be more challenging and may involve additional requirements and complexities. It is recommended to consult a financial advisor or mortgage specialist to explore your options and determine the most suitable financing solution for your needs.
When considering a mortgage in Austria, you have the option of approaching Austrian banks or private banks, including those from Switzerland. Austrian high-street lenders often provide package deals with standardised terms, which may not be the most competitive or flexible. On the other hand, private banks can offer more personalised financing with individually negotiated offers, potentially resulting in better rates and terms. It is worth noting that Swiss private banks, which were once popular for Austrian mortgages due to their stable currency and attractive interest rates, are no longer the primary choice for middle-market borrowers as cheap finance is now more widely available.
Mortgage terms from Austrian banks typically cover up to 60% of the gross property price, excluding additional costs and fees, and can be repaid over a period of up to 20 years. The interest rates are currently very low, usually ranging from 2% to 3% per annum. Additionally, there are various fees associated with mortgages in Austria. These include mortgage arrangement fees, property appraisal fees, and a registration fee of approximately 1.2% for entering the mortgage into the Land Register.
It is worth noting that the costs of buying property in Austria can amount to around 10% of the purchase price, excluding the mortgage offer. These costs include various taxes, such as the Real Estate Transfer Tax, notary fees, and capital gains tax on the sale of private domestic property, which is taxed at a flat rate of 30%. Commercial renting income is taxed at 25% of the capital gain. Additionally, there is a transfer tax of 3.5%, reduced to 2% if the property is passed to a next of kin or sibling.
If you are a non-EU citizen, you may need to obtain special approval from the local government to purchase real estate in Austria. This requirement stems from the country's desire to regulate foreign investment in land and property. Each state has its own regulations, and the approval process can vary significantly. It is advisable to consult a legal professional to guide you through the specific requirements and permissions needed for your purchase.
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Foreigner status and restrictions
Foreigners looking to purchase land in Austria should be aware of several factors that may impact their ability to do so. The process and requirements for buying property in Austria vary depending on the foreigner's nationality and the type of property they are interested in. Here is an overview of the key points regarding foreigner status and restrictions when purchasing land in Austria:
EU and EEA citizens: Citizens of the European Union (EU) and European Economic Area (EEA) member states generally enjoy the same rights as Austrian natives when it comes to buying property. They can acquire real estate in Austria without any restrictions and are treated the same as locals during the purchasing process. This includes citizens of Switzerland, which has a strong connection to the EEA.
Non-EU/EEA citizens: Individuals who are not residents of the EU or EEA may face additional requirements and restrictions when seeking to purchase land in Austria. In most cases, a special permit or approval is needed before they can acquire property. The regulations for obtaining this permit vary across different regions of Austria, so it is important to research the specific requirements of the desired location. Some areas, such as Graz, do not require special permission for foreigners to buy property. However, other popular tourist destinations like Vorarlberg, Salzburg, and Tirol have more complicated and strict requirements.
Residence requirements: While there is no general requirement to reside in Austria to purchase property, certain restrictions apply to non-residents. For example, in some cases, non-residents may be required to demonstrate their intention to reside permanently on the land before being allowed to purchase it. Additionally, obtaining an Austrian residence permit or citizenship is not directly connected to purchasing real estate. However, a residence permit may be a prerequisite for some foreigners wishing to buy property, and it requires living in the country for at least 183 days per year.
Agricultural land and farmlands: Purchasing agricultural land or farmlands in Austria as a foreigner may be subject to stricter controls and regulations. These types of properties often have usage restrictions that apply to all persons, regardless of their nationality. Therefore, foreigners should be aware of the specific rules pertaining to the type of land they intend to purchase.
Overall, it is important for foreigners to understand the unique considerations and regulations that apply to their specific situation when seeking to purchase land in Austria. Consulting with legal professionals or experts in Austrian real estate is highly recommended to navigate the complex legal landscape and ensure compliance with all applicable rules and requirements.
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The land registry
A land registry entry typically consists of three parts: the A Sheet (Property Sheet), the B Sheet (Title Sheet), and the C Sheet (Charges Sheet). The A Sheet contains details about the property itself, such as its location and dimensions. The B Sheet relates to the title and ownership of the property, including any associated rights, such as building rights or easements. Finally, the C Sheet outlines any charges, pre-emptive rights, or liens held by banks or other entities.
The entry to the land registry is typically handled by a lawyer or notary, who acts as an intermediary between the buyer and the seller. This process usually costs around 4.5% of the property's value and can take between 9 and 32 days to complete. Once the entry is made, the buyer's payment is released to the seller, and the transaction is officially finalised.
It is worth noting that, in Austria, home insurance is mandatory when purchasing a property, and this is also a requirement to secure a mortgage. Additionally, for those interested in developing the land, it is important to obtain Baurecht, which grants the owner the right to construct buildings.
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Frequently asked questions
First, you must find the land you want to buy. Then, you should inspect the government land register for any legal requirements, rights, and restrictions. Next, you will need to draw up a contract, which will be done by a notary. Once the contract is signed, you will need to pay the deposit and enter the property into the land register.
You will need to apply for registration in the land register and pay a fee of €40 if paid electronically, or €56 if not. The timeline for registration varies between 2 weeks to 3 months.
Yes, there are certain restrictions for non-EU citizens buying land in Austria. Citizens of third countries must apply for approval from the Land Commission, and they cannot buy property for part-time living (less than 6 months a year).
There are various costs to consider, including the purchase price of the land, notary fees, registration fees, and home insurance. Mortgage arrangement fees and property appraisal fees may also apply.
You can obtain a mortgage from a bank in your home country or an Austrian bank. Mortgage terms typically cover up to 60% of the gross property price and have repayment periods of up to 20 years.
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