Sep 29th 2023
Additional costs when buying a property
In this blog post, we will shed light on the various additional costs involved in buying a property in Austria and provide you with helpful key figures to help you better understand these costs.
Land register entry fee 1.1% of the purchase price
There is also a land register entry fee of 47 euros. If the application is not submitted electronically, the fee is 67 euros. It is possible to defer the land register entry fee for up to one year. In this exceptional case, one speaks of an off-book owner. This is usually done if a resale is planned within this period. A special case exists in the case of inheritances/gifts within the family. The land register entry fee remains unchanged at 1.1%. The assessment basis for such a transfer free of charge is 3 times the unit value (maximum 1/3 of the market value).
Real estate transfer tax 3.5% on the purchase price
When purchasing a flat, 3.5% real estate transfer tax is generally payable on the consideration (usually on the purchase price). There is a sliding scale in the form of a graduated rate for purchases made free of charge, such as gifts within the family circle. For purchases of agricultural and forestry land within the family circle, the real estate transfer tax will always be 2% of the standard value from 1 January 2016. More information: Federal Ministry of Finance.
Contract set-up costs & trustee costs
The contract set-up costs and trustee costs are regulated by the respective chamber tariff. A flat-rate fee is normally agreed. As a general rule, the lower the selling price of the property, the higher the percentage. In Tyrol, the rates are between 1.2% and 2.5% + 20% value added tax (VAT), depending on the effort involved and the amount of the basis of assessment.
Estate agent costs max. 3% + 20% VAT -> 3.6% on the purchase price
The brokerage costs in Austria are capped by law and are therefore limited. In Austria, the estate agent acts as a double agent, i.e. for both the seller and the buyer. On both sides, the brokerage commission is therefore capped at a maximum of 3% + 20% VAT. The maximum total brokerage commission for both sides added together must therefore not exceed 6% + 20% VAT. In exceptional cases, the maximum commission of 3% on one of the two sides may be higher. This would be the case, for example, if one side pays all or part of the costs of the other side. Details on this: Professional Code of Conduct for Estate Agents
ATTENTION: As always, there is an exception to the 3% cap. If the purchase price is up to EUR 36,336.42 (this may be the case in Tyrol for car parking spaces, storage, garage boxes, etc.), the agent's commission is a maximum of 4% of the purchase price + 20% VAT (i.e. 4.8%). Between EUR 36,336.43 and EUR 48,448.50, a flat rate of EUR 1,453.46 is applied. Table overview: up to EUR 36,336.42 4% each from EUR 36,336.43 to EUR 48,448.50 EUR 1,453.46* from EUR 48,448.51 3% each Threshold regulation in accordance with §12 Para. 4 Real Estate Agent Regulation The legal basis for commission in detail: Real Estate Agent Act (MaklerG)
Other costs
Other costs include cash expenses, which can amount to a few hundred euros depending on the property. Such cash expenses include notarisation costs, stamp duties, postage, etc. Ask the contract draftsman or, if he differs from the notary, the notary to make you an offer in advance. Often a lump-sum offer is made for the entire drafting of the contract/trusteeship and handling of the sale. The amount of the lawyer's or notary's fees is approximately 1-3 per cent of the purchase price and is determined by the respective chamber rates. It is also possible to agree a flat fee. However, you should ask for this in advance. This means that the ancillary purchase costs normally amount to approx. 10 per cent gross, i.e. including value added tax (VAT).
Summarised as follows: Costs/fees/taxes Costs (in per cent)
- Land registry fee 1.1%
- Land transfer tax 3.5%
- Conveyancer/trustee 2.4%
- Real estate agent 3.6%
- Total 10.6% Plus cash expenses of a few hundred euros, if not included in the lump sum for contract preparation costs.
If you are financing the purchase of your property through a bank, the bank will want to enter a lien in the land register. This means that an additional one-off 1.2% lien fee will be charged on the amount of the mortgage, i.e. on the lien.
Please note: Not on the borrowed capital but on the lien entered in the land register. Example: Borrowed capital EUR 100,000; lien in the land register EUR 120,000. The 1.2% on the lien of EUR 120,000 is therefore EUR 1,440. There are also additional incidental costs with loan financing.
One-off costs may include valuation costs for the property, which are usually borne by the bank if the loan is taken out with the relevant bank. In addition, there is an entry fee of EUR 47 in the course of registering the mortgage, and a land register extract of approx. EUR 40. Notarisation costs depending on the amount of the lien
Please note: the pledge deed must be notarised and signed by both the customer and the bank -> this fee is therefore incurred twice.
In addition to the repayment instalments affecting liquidity, ongoing charges may be incurred for death insurance, accident insurance, occupational disability for the borrower's loan repayment in the event of a claim and account management charges for the financing account. Some banks merely point out the possible personal risks, but do not oblige the customer to take out any of the insurance policies mentioned. Experience shows that the account management costs are between EUR 30 and EUR 60 per year.
When buying a property in Austria, you should not only consider the purchase price, but also the ancillary costs. The total cost of service charges can vary considerably depending on the region and individual circumstances. It is crucial to plan these costs in advance to avoid financial surprises. Find out thoroughly about the current fees and conditions and, if necessary, seek the assistance of a professional to ensure you understand all costs and include them in your budget.