Published on and written by Cyril Jarnias
Buying, selling, renting, or transferring property in Austria is not just about signing a contract and transferring funds. The country has a dense legal arsenal, highly protective for the parties involved, but sometimes bewildering for those unfamiliar with local rules. From land register entry to rent ceilings, from inheritance taxes to building energy performance, every step is regulated.
This article provides a structured overview of the main laws and regulations in the Austrian real estate sector, based on data and concrete cases from a research report.
Austrian real estate rests on a central principle: legal certainty. Two major public registers structure this protection and are updated daily to ensure perfect accuracy.
The cadastre, managed by the BEV, establishes legally binding and precise parcel boundaries accurate to the centimeter since 1968, preventing adverse possession. It records technical land data, and its oldest maps from the 19th century are protected as cultural heritage.
The second pillar is the land register, maintained by the district courts. It is organized by cadastral municipality, with each property identified by a folio number. A land register excerpt is structured in three sections. Section A describes the property inventory (parcel number, type of use, address), and a subsection A2 records public law charges (aircraft noise zones, tolerance obligations, easements). Section B indicates who owns the property and in what proportion, referring to the legal act establishing the right (sales contract, inheritance deed). Section C lists private encumbrances: mortgages, prohibitions on alienation, rights of residence, pre-emption rights, servitudes.
The land register is public and has been accessible online since the 1990s. It can be consulted by anyone via a notary, lawyer, or directly at the courts. This transparency allows third parties to rely in good faith on the entries, which significantly reduces the need for title insurance.
Since September 2024, a significant evolution allows public access to certain sensitive documents in the deed file (sales contracts, inheritance deeds, divorce settlements) to be restricted. Upon request, data relating exclusively to private or family life can be obscured, without affecting the transparency of the registered property rights.
Becoming an owner: contract, registration, and ancillary costs
In Austria, signing a purchase agreement and receiving the keys is not enough to become the legal owner. The transfer is based on two inseparable elements: a “title” and a “modus”. The title is the deed (sales contract, deed of gift, inheritance ruling). The modus is the registration of this title in the land register. Until this registration is completed, the seller remains the owner in the eyes of the law, even if the buyer already occupies the property and has paid the price.
Registration is done by filing an application with the competent district court for the property’s location. In current practice, applications are submitted electronically by the notary or lawyer handling the transaction. In simple cases (change of address, minor correction), the application can still be made orally at the court registry to be recorded in the minutes.
The mandatory documents required for property registration.
Signed contract with signatures certified by a court or notary.
Proof of payment of the property transfer tax.
Documents from the bank in case of taking out or releasing a mortgage.
Required for acquisitions by a non-EU/EEA national or for agricultural/forest land.
Proof of citizenship or company registration certificate.
Processing times vary: for a “standard” sale of an existing apartment, registration generally takes four to six weeks. When it comes to creating new properties by subdivision (e.g., condominium in a new building), the procedure can take six to twelve months, while the legal and technical conditions are met.
Property transfer tax applicable to real estate purchases in Germany, calculated on the price or market value.
When the purchase is intended to serve as a primary residence, the legislator has introduced targeted relief. A temporary exemption from the 1.1% and 1.2% registration fees is provided for acquisitions used as a primary residence, subject to conditions regarding signing dates and submission of the registration application, a taxable value ceiling (€500,000 per transaction, doubled to €1,000,000 if two purchasers buy together, no exemption beyond €2 million), and an obligation to reside there for five years, failing which the tax advantage must be repaid.
A cost structure amounting to approximately 10 to 13% of the price
To measure the overall impact of the rules, it is useful to summarize the main mandatory cost items for a standard transaction.
| Cost Item | Basis for Calculation | Indicative Rate or Range |
|---|---|---|
| Real Estate Transfer Tax | Price or Market Value | 3.5% (reduced scale within family) |
| Land Register Entry Fee (Ownership) | Price or Market Value | 1.1% |
| Land Register Entry Fee (Mortgage) | Amount of Secured Loan | 1.2% |
| Notary/Lawyer Fees (Contract, Filing) | Property Price | approx. 1.5% to 3% + 20% VAT |
| Real Estate Agent Commission (Buyer) | Property Price | max. 3% + 20% VAT |
| Miscellaneous Fees (Appraisals, Excerpts, etc.) | Flat Fee or Unit Amounts | a few hundred to a few thousand € |
Depending on the transaction structure (presence of a broker, bank financing, legal complexity), the total acquisition costs are generally between 9% and 13% of the price, or slightly more for non-residents due to additional procedures.
Restrictions for foreigners and transfer controls
Austrian law draws a clear line between citizens of the European Union/EEA, who are assimilated with nationals, and third-country nationals. The former can freely acquire most properties, subject to specific rules for agricultural land and certain tourist areas where restrictions on secondary residences exist. The latter are in principle subject to an authorization procedure.
Each Austrian region (Land) governs property acquisitions by foreigners through its own law (Grundverkehrsgesetz) and a dedicated commission (Grundverkehrsbehörde). The legislation precisely defines who is considered a foreign purchaser, including non-Austrian natural persons, companies headquartered abroad, Austrian entities majority-owned by foreigners, as well as associations or foundations under foreign control. Authorization is only granted if the transaction serves a cultural, social, or macroeconomic interest and does not harm the public interest. Although holding an EU residence permit or having economic ties to the region may facilitate the decision, they do not guarantee authorization.
Practice varies strongly by region: Vienna and Graz are generally open to non-European investors, although administrative approval is still required in the capital. Conversely, Alpine Länder like Tyrol, Vorarlberg, or parts of Salzburg impose strict restrictions, especially for secondary residences in ski resorts, where acquisition by non-residents can be almost impossible, except for rare exceptions explicitly zoned for tourist or vacation use.
Property acquisitions via a company established in the EU/EEA are generally treated as domestic purchases, even with third-country shareholders. However, some German Länder require the company’s business purpose to be related to real estate. Authorities rigorously verify the origin of funds under anti-money laundering rules. Notaries, lawyers, and banks must collect supporting documents, identify beneficial owners, and report any suspicion to the specialized office of the Ministry of the Interior.
Taxes on ownership and disposal: between stability and targeted niches
Beyond transfer taxes, real estate is subject to several recurring or one-time levies that must be mastered to calibrate an investment or estate planning project.
Municipalities levy an annual property tax (“Grundsteuer”) based not on market value, but on a fiscal unit value assessed by the tax administration. The base rate ranges between 0.1% and 0.2% of this value, before applying a municipal multiplier that can reach 500%, leading to an effective cap of about 1% of the fiscal unit value. When the annual amount exceeds €75, the tax is paid in four quarterly installments. In practice, this burden remains moderate compared to other European countries and can be passed on to tenants as recoverable charges.
The real estate capital gains tax (ImmoESt) applies at a proportional rate of 30% on the net gain. For properties acquired before the early 2000s, flat-rate regimes with a reduced effective rate (e.g., 4.2%) may apply. The automatic exemption after 10 years of ownership was abolished for properties purchased after spring 2012. Two major exemptions remain: the sale of a primary residence (occupied for at least 2 consecutive years or 5 years out of the last 10) and the disposal of certain self-built structures.
VAT applies occasionally in real estate. The standard rate is 20% and applies to the sale of new properties by a developer, as well as to intermediary fees (notaries, lawyers, agents). Residential rental housing is generally exempt from VAT, unless the landlord expressly opts in, while commercial premises are in principle subject to VAT on rents when the owner is a taxable person.
Austria no longer applies a wealth tax or classic inheritance taxes since their abolition in 2008. However, gifts or inheritances of real estate are subject to a specific transfer tax, generally calculated on the property’s market value.
Inheritance, gifts, and estate planning
Real estate transfers upon death or by gift is an area where the combination of civil law, tax law, and the land register sometimes produces counter-intuitive effects.
In civil terms, inheritance law distinguishes between legal succession (in the absence of a will) and “testamentary” succession, resulting from a last will and testament, legacy, or inheritance pact. Legal heirs are distributed by order: spouse or registered partner and close relatives, with closer relatives excluding more distant ones. Even with a will, some benefit from a compulsory portion: the spouse/partner and descendants are entitled to a minimum share corresponding to half of what they would have received under the law.
Real estate gifts and contributions to a private foundation, tools for estate planning, require a notarial deed to be valid. Creating a private foundation offers intergenerational stability and allows for tax optimization (such as deferring tax on reinvested capital gains). However, it is subject to an entry tax of 2.5% (which can reach 25% in certain cases) and incurs significant formation and annual management costs.
From a tax perspective, even in the absence of classic inheritance/gift tax, the gratuitous transfer of real estate triggers the property transfer tax. For transfers within the immediate family (children, spouses, grandchildren, sometimes siblings), a progressive scale is applied to the value: 0.5% up to €250,000, 2% between €250,001 and €400,000, then 3.5% beyond. In some cases, notably for agricultural or forest land transferred within the family line, a reduced rate of 2% applies to a specific “standard value.” Outside the family, the rule is generally a rate of 3.5% on the market value.
Gifts exceeding certain thresholds (€50,000 between close relatives or €15,000 between non-relates over five years) must be declared to the tax authorities, under penalty of a fine of up to 10% of the undeclared value. Customary gifts under €1,000 are exempt. For an inherited property, additional costs apply: the 1.1% land register entry fee, notary and lawyer fees, property appraisal, and, in case of multiple heirs, partition costs if the property is sold.
A point often misunderstood concerns subsequent taxation upon resale. If the heir sells the property and realizes a capital gain, a 30% tax applies to the gain, unless they benefit from exemptions related to the primary residence. These can apply by considering the deceased’s use: if the deceased person lived there as their primary residence for at least two consecutive years, or five years out of the last ten, the sale by the heir may be exempt. However, if the property remains in the heir’s estate without being resold, no additional transfer tax is due solely due to the inheritance transfer.
Numerical example: the inherited apartment and the reduced tax
The case of an apartment in Vienna illustrates the mechanics of the rules well. A grandchild inherits a condominium with a market value of €400,000. The fiscal unit value of the property is set at €80,000. As a family heir, the transfer tax is not calculated on €400,000, but on this much lower unit value, at a rate of 2%, i.e., €1,600. Three years later, they sell the apartment. Since their grandmother had lived there for over forty years as her primary residence, the sale is exempt from capital gains tax, despite the increase in value.
Residential leases: a law highly protective of tenants
Austrian tenancy law is known for being particularly protective of tenants, especially for apartments subject to the full scope of the Tenancy Law (“Mietrechtsgesetz”, MRG). It operates on two levels: the general Civil Code (ABGB) provides a foundation of largely suppletive rules, allowing significant contractual freedom when the MRG does not apply or only applies partially; the MRG itself imposes mandatory standards on contract duration, grounds for termination, and especially rent ceilings for a large part of the older housing stock.
The key distinction is based on the nature of the building (old or new, with or without public subsidy) and the date of the building permit. Schematically, old buildings, often constructed before 1945 or 1953 depending on the case, fall under the full scope of application (Vollanwendungsbereich) of the MRG, with rent ceilings and strong regulation. More recent buildings or certain types of properties (commercial premises, single-family houses, condominium units) are subject partially (Teilanwendungsbereich) or solely to the ABGB. For the latter, rent is freely negotiated, the legislator considering that private autonomy should prevail, subject to a few general safeguards.
Within the area of full MRG application, three systems for maximum rent coexist. The “category rent” classifies apartments from A to D based on their size (at least 30 m² for category A), equipment (kitchen, sanitary facilities), and the building’s condition. The “reference value rent” (“Richtwertmietzins”) sets an amount per square meter specific to each Land, revised periodically, then adjusted upwards or downwards based on factors (floor, orientation, building condition, environmental quality). Finally, the “appropriate rent” (“angemessener Mietzins”) applies to certain special cases (large luxury apartments over 130 m², recent or protected buildings, non-residential premises), where the rent must remain appropriate to the size, location, and condition, while being moderate relative to the market.
For fixed-term leases, a mandatory reduction called “Befristungsabschlag” lowers the maximum permitted base rent by 25%, a rule frequently forgotten in contracts but which the tenant can invoke. Recoverable charges, rent structure, and taxes are specified in Articles 14 to 16 of the MRG: rent consists of the base rent, operating costs (“Betriebskosten”), certain supplements, and VAT (10% for housing, 20% for garages, furnishings, etc.). Rent and charges are payable monthly, at the latest on the 5th of each month, with an annual reconciliation of charges by June 30 at the latest.
Contract duration, termination, and protection against eviction
Two main types of leases coexist: fixed-term contracts (“befristeter Mietvertrag”) and indefinite-term leases (“unbefristeter Mietvertrag”). The MRG imposes, for covered apartments, a minimum term of three years for fixed-term leases. These can be renewed as many times as the parties wish, but each renewal must also last at least three years and be documented in writing, with no legal maximum duration.
Even in a fixed-term lease, the law grants the tenant, after the first year, the possibility to terminate the contract early, provided they observe a three-month notice period effective at the end of the month of notification. Practically, the earliest possible departure is therefore at the end of the 16th month. For open-ended leases, the basic rule is a one-month notice period, also running from the end of the month in which termination is notified. Longer notice periods can be contractually agreed.
The landlord’s termination powers are strictly regulated by law. A landlord can only terminate an indefinite-term lease or prematurely terminate a fixed-term lease by invoking an important reason exhaustively listed in Article 30 (e.g., repeated non-payment, seriously damaging use of the dwelling, urgent need of the landlord). Termination must be filed with the district court. The tenant then has four weeks to contest, which can lead to lengthy court proceedings. Immediate eviction is only possible in cases of significant arrears or serious abuse, but court processing times often last months.
The principle of “Kündigungsschutz” – protection against abusive termination – is at the heart of the system. A tenant can only be evicted for legal reasons and according to a formalized procedure. Conversely, repeated non-payment of rent effectively exposes them to termination and eviction proceedings. However, if the tenant pays their debts before the end of the proceedings and has not acted in a seriously wrongful manner, the law gives them a form of second chance by allowing them to avoid termination.
The security deposit (Kaution), typically equivalent to three months’ rent, covers damages and unpaid amounts. It is refunded with interest at the end of the lease if the dwelling is returned in good condition and all obligations are fulfilled. The landlord cannot indefinitely withhold the deposit pending the reconciliation of charges; they have only a few days to assess their legitimate claims.
Regulation of agent commissions in rentals
For a long time, Austrian tenants bore almost alone the real estate agent commissions for renting. Since summer 2023, a major legislative change introduced the “Bestellerprinzip“, or the “client-pays” principle. The new Paragraph 17a of the Real Estate Agents Act stipulates that whoever commissions the agent bears the brokerage fees. In residential leases, this means that when the landlord hires an agency to find a tenant, the commission can only be charged to the landlord, not the tenant.
For a tenant to be liable for a commission, they must have clearly commissioned the agent before any search and a remuneration agreement must have been concluded. The burden of proof lies with the agent, who must document in writing each brokerage contract related to a residential lease. Any attempt to circumvent the rule, by hiding the commission in an artificially increased rent or having the agent paid by the tenant via another service, is prohibited. Close economic ties between landlord and agent (capital participation, decisive influence) also deprive the agency of the right to claim fees from the tenant.
Compliance with these provisions is monitored, and administrative penalties of up to €3,600 per violation can be imposed on both the agent and the landlord. In case of an unduly charged commission, the tenant can claim a refund within three years from becoming aware of the facts, relying on the rules of the Civil Code and the Consumer Protection Act. The Austrian Supreme Court has already confirmed, in a recent ruling, that an agent who fails to disclose an economic tie with the landlord and nevertheless charges fees to the tenant must repay them.
Offices, commercial premises, and other commercial leases
While housing largely falls under the MRG, commercial, industrial, or office premises benefit from greater flexibility. In many cases, only part of the MRG provisions apply, or none at all, and the ABGB serves as the default framework. Parties can then freely agree on durations, termination modalities, distribution of maintenance work, or rent review methods (often indexed to the consumer price index).
A crucial distinction exists between the lease of premises (Geschäftsraummiete), partially subject to the Tenancy Law (MRG) for contracts over six months, and the business lease (Pacht), where the tenant operates an existing business. The latter, often with rent indexed to turnover, completely escapes the MRG and falls under common civil law, offering less protection to the lessee regarding rent ceilings and termination conditions.
For these commercial leases, typical durations range from five to ten years, often with renewal options. Charges and insurance costs are generally passed on to tenants, as is routine maintenance. Major structural works (roof, facade, load-bearing structure) remain the owner’s responsibility, unless otherwise stipulated. Early termination is governed mainly by the contract, with judicial intervention only required when imperative texts (applicable parts of the MRG) demand it.
Austria has long applied, in a coordinated manner between its Länder, European requirements regarding building energy performance. The 2012 law on the presentation of the energy performance certificate (“Energieausweis-Vorlage-Gesetz”, EAVG 2012), which transposes Directive 2010/31/EU, mandates the production and communication of an energy performance certificate whenever a building is constructed, sold, rented, or undergoes major renovation.
This document, valid for ten years, must be provided to any prospective buyer or tenant before the contract is concluded, and a complete copy must be provided within 14 days after signing. It is not just a technical formality: the certificate carries the value of an expert opinion, and the information it contains is deemed to constitute a guaranteed characteristic of the property, integrated into the contract. In case of a significant discrepancy or false declaration, the seller’s or landlord’s liability can be engaged.
The EPC displays four main indicators on two pages: specific heating demand (HWB), primary energy demand (PEB), CO₂ emissions, and the overall energy efficiency factor (fGEE). Each is rated on a scale from A++ (best performance) to G (worst performance). For existing buildings, the report must include recommendations for works aimed at reducing final energy consumption.
Real estate advertisements, whether published online or in print, must mention the HWB value and the fGEE, under penalty of a fine of up to €1,450, for both the seller/landlord and the real estate agent. If an agent requested the data and the owner refused, the agent can be exempt from liability. Failure to present or provide the certificate itself is also penalized by the same fine range.
Some buildings are exempt from the energy certificate obligation: those merely kept frost-free, temporary constructions under two years, seasonal buildings consuming less than a quarter of the energy of a permanent residence, small isolated buildings under 50 m², or those slated for demolition. However, historic or listed buildings are no longer exempt: they must obtain a certificate, even if possibilities for energy adaptation may be limited by conservation constraints.
The data from these certificates are centralized in a national database, the EPCDB, integrated into the building and housing register and managed by Statistik Austria. Certifiers (architects, engineers, energy consultants) can register their reports online, sometimes via Land databases that feed the central register. This database serves not only regulatory monitoring but also the development of public policies, particularly within the framework of the long-term strategy for building stock renovation.
Between party protection and political evolution
The entire set of rules described demonstrates a sought balance between investor security, occupant protection, and public policy objectives (energy transition, rent moderation, preservation of agriculture and landscapes). The Austrian system leaves a large role to contracts but strongly regulates areas deemed sensitive: residential leases, cross-border property transfer, energy performance, register transparency.
Although wealth tax and classic inheritance taxes do not currently exist, the debate remains open. Political proposals aim to reintroduce progressive taxes on large estates and transfers. These plans provide for high allowances for primary residences and favorable regimes for business transfers, subject to maintaining employment. Their future adoption will depend on parliamentary majorities.
In the meantime, some technical mechanisms, such as the recent increase in taxation of inherited real estate by referring to market value rather than a unit base, or the upward revision of family transfer scales, already indicate a trend towards strengthening the contribution of high-value real estate holdings.
For individuals and professionals, it is crucial to anticipate by understanding the property’s legal regime (full or partial MRG, ABGB alone), checking charges and restrictions in the land register, assessing current and potential tax impacts, and integrating energy constraints from the design stage or before renovation. The support of seasoned practitioners (notaries, lawyers, tax advisors, specialized real estate agents) is a worthwhile investment to navigate the Austrian regulatory landscape safely.
A French entrepreneur, around 50 years old, with an already well-structured portfolio in Europe, wanted to diversify part of his capital into residential real estate in Austria to seek rental yield and exposure to the euro in a stable market. Allocated budget: €400,000 to €600,000, without borrowing.
After analyzing several markets (Vienna, Graz, Linz), the chosen strategy involved targeting a residential building or a large apartment in an up-and-coming neighborhood of Vienna or Graz, combining a target gross rental yield of 4–5% — keeping in mind that “the higher the yield, the greater the risk” — and medium-term appreciation potential, with an overall ticket (acquisition + fees + potential renovations) of around €500,000. The mission included: market and neighborhood selection, connection with a local network (real estate agent, lawyer, tax advisor), choice of the most suitable holding structure (direct ownership or Austrian company) and definition of a portfolio diversification plan over time.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
