Taxes in Austria when purchasing real estate
When purchasing an apartment or house in Austria, the buyer pays tax on the transfer (3.5% of the cost) and registration (1.1% of the cost) of property rights.
When purchasing a new building, its price also includes VAT of 20%. However, if the owner plans to rent out the property rather than live in it independently, he is exempt from paying VAT and can purchase an apartment at a lower price.
Taxes in Austria when owning real estate
Property owners in Austria pay land tax. The tax rate is calculated based on the assessed value of the property, which is much less than its market value. The estimated value is determined by the financial departments of municipalities.
For apartment owners, land tax is already included in the rent, while house owners pay it separately. The amount of tax for a house is determined based on the cadastral purpose and the actual use of the site. Municipalities apply a multiplying factor to the calculated rate, which can increase the final amount payable by 3-5 times. The tax amount depends on many factors and can range from 50 to 250 euros per year.
If the property is rented out, its owner pays income tax on the income received. Tax rates are the same for residents and non-residents. The tax is levied on a progressive scale and ranges from 25% to 50% depending on the amount of income received. For non-residents, the minimum tax base is 2 thousand euros per year.
Taxes on the sale of real estate in Austria
Capital gains tax is payable when selling real estate. Its rate is 30%, and the tax base is calculated as the difference between the proceeds from the sale and the purchase price. No tax is payable if the property being sold served as the seller’s primary residence for two years immediately before the sale or for any five of the last ten years preceding the sale.
In Austria there is no separate tax on inheritance or gift of real estate, the recipient only pays standard taxes on the transfer and registration of property rights.
You can learn more about the real estate market in Austria from our articles.