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The main problems in purchasing real estate in Austria


 

 

In Austria, the real estate market stagnated for a long time but since 2006, the construction work continuously increases.

 

Purchasing real estate by a foreigner:

Since 1996, the federal states are vested with the legislative competence.

 

Purchasing real estate is regulated by state law. Therefore, in Austria exist nine different state laws. Generally, the state laws only provide for free purchasing for Austrians. Purchasing by a foreigner mostly depends on approval whereby lack state law has its own requirements. Their law is mostly determined by social interests. As a rule, sales contracts require approval of the land transfer authority.

 

For example, purchasing of real estate by a foreigner in Vienna depends on approval of the magistrate after a hearing of the respective interests.

 


No approval has to be obtained in the case of a married couple, if both are buyers and one of them is of Austrian nationality. Citizens of the European Economic Area (EEA), when a treaty manages that citizens in other states may purchase real estate like citizens in this state, but citizens of the European Union are generally exempted too.

 

How to manage purchasing real estate in Austria:

 

The transfer of real estate requires title and modus. The sales contract obliges the seller to sell and transfer the real estate. The buyer is committed to pay the purchase price.

 

Such contract only constitutes the title for the transfer of real estate. A valid transfer also requires the entry of such in the land register (modus).

 

In principle, the contract of sale would not require a specific form, but to fulfill the formalities for the entry of the property in the land register the sales contract including the notice of assent to registration needs to be notarized.

 

Purchasing real estate, registered with the land register requires following steps:

  • Upon inspection of the land register, conclude the agreement. Inevitable terms of the sales contract are the exact description of the real estate, the purchase price and assent to registration with the land register, which has to be attested by a notary, for the entry in the register.
  • Signing the escrow by the parties and verification of the signatures.
  • Sending an announcement of transfer to the financial authority within the statutory period of time.
  • Obtaining a special declaration for the clearance of encumbrances, if any.
  • Obtaining approval of the last transfer authority if a foreigner buys a real estate.
  • To file an application with the authority where the real estate is located for the entry of the property in the land register.
  • Purchasing agricultural land, second home houses or real estate by a foreigner depends on the approval of the competent authorities.
  • Tax aspects:

A contract of sale concerning Austrian real estate incurs a tax liability. The tax for purchasing real estate amounts to 3,5 % of the purchase price.


The financial authority has to be notified of the purchase price.


After payment of the real estate transfer tax, the financial authority issues a tax clearance certificate (“Unbedenklichkeitsbescheinigung”) which is a prerequisite for entry with the land register.


Supplementary to the tax on the purchase of real estate an entry tax with the land register of 1 % of the purchase price is to be paid.

Mag. Philipp Scheuba (partner) BLS Rechtsanwälte
Boller Langhammer Schubert KG
Kärntnerstrasse 10
A- 1010 Wien


Phone: +43 1 512 14 27

Fax: +43 1 513 86 04

E-mail: austria1@avrio.net