Jun 10th 2024 Buying property as an EU citizen in Austria

As Austria is one of the countries that offers a wide variety of properties that serve as very good investments, more and more private individuals and investors from other EU countries are investing in them. Austria is particularly popular among EU citizens as a primary and secondary residence.

For example, around 200,000 Germans have registered their main or secondary residence in Austria. As Austria is still one of the most popular holiday destinations for Germans, we are not surprised that so many have a main or secondary residence here.

Legal framework

Acquisition of property for EU citizens

As an EU citizen, you have the same rights when buying property in Austria as Austrian citizens. There are no special restrictions or authorisation requirements. This makes the purchase considerably easier and provides a secure legal basis for investment.

The only exceptions are agricultural properties. In the first step, the purchase contract is concluded and in the second step the acquisition of ownership is entered in the land register. This requires the corresponding deed, on which all parties, including the notary, must sign.

Incidental purchase costs When buying a property in Austria, you should budget around 10-12% of the purchase price for incidental costs. These are made up of

• Land transfer tax: 3.5% of the purchase price
• Land register entry fee: 1.1% of the purchase price
• Notary fees: variable depending on scope
• Estate agent's commission: up to 3% of the purchase price plus 20% VAT
• Costs for processing the purchase contract

Another important point is the appropriate financing or equity/financial assets available. Since 1 August 2022, stricter regulations have been in place for lending for real estate in Austria - you can read our blog The New Residential Loan Regulation 2022 - Tirol Real Estate.

What licences are required?

If you are planning to buy a building plot, you as the future owner must confirm in writing that you also plan to use it for the construction of a property in the near future. If a building plot has already been built on, a written declaration is required from you stating that you do not wish to use this property as a holiday home. Depending on the federal state and region, EU citizens may be subject to further requirements.

The property purchase process

Property search
The search for a suitable property can be carried out via reputable property portals or with the help of an experienced estate agent. The latter offer the advantage of market knowledge and legal certainty.

Purchase offer and contract
Once a suitable property has been selected, a purchase offer is submitted. The purchase contract is usually drawn up by a notary or lawyer and contains all the important details such as the purchase price, payment terms and transfer date.

Due diligence
A thorough inspection of the property is essential. This includes inspecting the land register, checking any encumbrances and assessing the structural condition of the property. These steps ensure that no unexpected problems arise.

Financing
Many Austrian banks offer mortgage loans for EU citizens. It is advisable to compare different offers and seek detailed advice in order to find the best conditions.

Completion and registration
Once the purchase contract has been signed, it is notarised and entered in the land register. Only then are you officially the owner of the property.

Advantages of buying property in Austria

Stable economy and legal certainty 
Austria offers a stable economy and a high level of legal certainty, making it an attractive location for property investments.

High quality of life 
With its excellent infrastructure and beautiful landscapes, Austria offers a high quality of life. This makes the country not only a desirable place to live, but also an attractive investment location.

Tax advantages 
Tax advantages can be utilised, especially when using the property as an investment object. This can significantly increase profitability.

Should it be a primary or secondary residence?

If you want to use your new property as your main residence, no authorisation is required. However, the situation is differentfor your second or holiday home, for which you need a corresponding permit, which must then be entered in the land register. This authorisation is called a "leisure residence permit".

In general, since the 1970s, people from other countries have been prevented from buying holiday flats and houses in touristically attractive regions throughout Austria, making it increasingly difficult from a legal perspective to buy a property in such areas.

Each federal state decides for itself in the property market

The federal states are responsible for the respective regional planning and holiday homes. Accordingly, there are nine different laws that must be observed if you want to buy a property there. The rules in Tyrol, Vorarlberg and Salzburg are particularly strict. The proximity to Germany makes these three regions particularly attractive, especially for German citizens, and so there is already a very high proportion of holiday flats and holiday homes there.

New holiday residences are only created in certain exceptional cases, which can be associated with major bureaucratic obstacles. As a German interested party, you may have to wait many years for the necessary authorisations, as the responsible authorities now know exactly how to obtain certain details in order to delay processing.

If you violate the regulations by registering a property as a private property and as your main residence, but only use it as a second or holiday home, then you are breaking the law. The consequence of this is that the property can be foreclosed on in court. We therefore recommend that you always clarify the future use of the property in advance and have everything confirmed in writing.

Tips for a successful property purchase

Choose an attractive location 
Choosing a property in an attractive location ensures long-term benefits, both in terms of quality of life and appreciation in value.

Professional help 
An experienced estate agent can help you not only with the search, but also with the legal process and avoiding pitfalls. This saves time and reduces the risk of mistakes.

Careful planning 
Plan the purchase carefully and calculate all the costs involved to avoid unpleasant surprises. Thorough preparation is the key to a successful property purchase.

^Source:

^{https://www.oesterreich.gv.at/themen/bauen_wohnen_und_umwelt/grundstueckskauf/1/Seite.200041.html
https://www.law-experts.at/rechtswissen-rechtsartikel-rechtsprechung/rechtsartikel/425-auslaendergrunderwerb-eu-drittstaatsangehoerige}