Real Estate Taxes in Austria: Buying, Selling, and Owning
For ten years in a row Vienna has been ranked first in the world ranking of the most comfortable cities for living, as a result of which the acquisition of housing by foreigners both in the Austrian capital and throughout the country is one of today’s trends. Along with the classic questions about the principles of buying local real estate, many want to know about the taxes in Austria that any homeowner will have to face.
When buying real estate, the buyer primarily pays a tax on transfer of ownership in the amount of 3.5% of the cadastral value and 1.1% for registration in the cadastre. In addition, you will have to pay a lawyer in the amount of 1-3%, as well as the work of a realtor, whose fee is 3% of the purchase price, if the price of the object exceeds 48,448 euros. The broker’s fee rises in percentage terms to 4% if the property has a value of up to 36,336 euros. The agent receives a fixed fee of € 1,453, provided that the cost of housing is between the above intervals.
Property Taxes in Austria
The costs of drafting the contract of sale depend on the tariff of the originator, type of real estate and purchase price. They are paid with the addition of overhead costs for certifications and stamp duties in the amount of 1 to 2.5% of the value of the property. The amount of payment for reporting to the authorities and the independent calculation of tax on income from the sale of real estate by representatives of the parties is determined by agreement in the framework of the tariffs of the contractor. The procedural costs and administrative fees for obtaining permission from the supervisor of land turnover are calculated depending on the specific Austrian municipality. If you will get a loan, then you need to lay about 2% of its amount.
Buying a private home
When buying a private house, it will also be necessary to take into account the possible costs of preparing the land according to the instructions of the local municipality (Lands), preparing the land for construction and operation, as well as fees for connecting to utility networks and other fees (electricity, gas, water, sewage , phone, etc.).
Taxes and new buildings
Determining for yourself what kind of real estate will be acquired. It is important to understand that when buying a home in a new building (with all the transparency of this definition, there are still cases when new housing is confused with the one that went through the renovation process), you need to pay 20% on VAT, which is returned after three years, provided that the owner has used real estate itself, and not rented out. But as a rule, VAT is already included in the price.
For many new buildings, there are different price lists: for example, a price list with VAT for ordinary buyers and a price list without VAT for investors. The authorities strictly control how the further use of the apartment meets the stated goals – checks always happen unexpectedly. Inspectors can also monitor this by observing transactions on the landlord’s accounts.
When operating real estate, apartment tax will be included monthly in the rent, and if it is a house, then its size will be calculated based on the cadastral value of the land. Apart from the rent, gas, water, electricity, internet, a telephone and, quite unexpectedly, a TV are paid. Utility costs are usually considered at a rate of 2-3 euros per 1 sq. M per month (depending on federal land, type of house and apartment). Bills for heating and electricity depend on the economy of the owners and the time of year.
Each apartment owner is required by law to pay deductions to ensure future expenses. The amount of regular payments by co-owners depends on future work, and as a measure of ordinary administration, it is usually determined by the management company.
Property Taxes in Austria
Features for Russian citizens
A citizen of Russia (by the way, and citizens of all countries outside the EU zone) does not have the right to register real estate in Austria as an individual, with the exception of special zones in resort regions. Real estate in Austria is acquired by a legal entity, which must pay income tax, which is 25%. However, this tax is not taxed on all rental income, but only the company’s profit. From the tax base are deducted: utility costs, depreciation of the property itself, depreciation of furniture purchased and interest on a mortgage.
When buying a new apartment for investment purposes (that is, for subsequent lease of the object), the investor is entitled to a partial VAT refund. Given all these and other possible benefits and deductions, taxation from renting in some cases can be very small in the end.
When selling real estate, the seller pays value added tax – he bought at a cost of 100,000 euros, sells for 130,000 euros, respectively, income tax is paid from 30,000.