Rental income and capital gains of Austrian Real Estate
| Taxpayer | Basis of tax | Tax levied | Tax rates (2023) |
|---|---|---|---|
| Resident company | Rental income | Corporate income tax Corporate income tax | 24% |
| Non-Resident company | Rental income Capital gains | Corporate income tax Corporate income tax | 24% 24% |
Resident individual | Rental income Capital gains | Individual income tax Real estate profit tax | 0 – 55% |
Non-resident individual | Rental income Capital gains | Individual income tax Real estate profit tax | 0 – 55% |
Rental income
Companies
Introduction
Rental income is taxed as business income.
Liability to tax
Rental income earned by companies is subject to corporate income tax as business income.
Basis to tax
Business income is subject to a flat corporate income tax of 24% in 2023. The corporate tax rate will be further reduced to 23% from 2024.
Individuals
Introduction
Rental income is taxed as part of the taxpayer’s annual income.
Liability to tax
Rental income received by individuals is subject to individual income tax.
Basis to tax
Generally, expenses can be deducted from rental income. Special rules may apply to depreciation of fixed assets and to renovation and maintenance costs. The taxable result is taxed together with all taxable income at the individual tax rate.
Capital gains
Companies
Introduction
Real estate capital gains are taxed as business income.
Liability to tax
Real estate capital gains realised by companies are subject to corporate income tax as business income.
Basis to tax
Business income, including all capital gains, is subject to a flat corporate income tax of 24%. The corporate tax rate will be reduced to 23% from 2024.
Individuals
Introduction
Real estate capital gains realised by individuals are taxed at a special tax rate, unlike rental income.
Liability to tax
Real estate capital gains realised by individuals are subject to a special real estate gains tax of 30%. However, it is also possible to opt out of this tax and have the capital gains taxed at the standard personal income tax rate.
Basis of tax
The difference between the acquisition cost and the sale price is taxed at a flat rate of 30%. Alternatively, if the property was purchased before 31 March 2002, the tax may be calculated on the basis of 14% of the sale price, resulting in an effective tax rate of 4.2% of the sale proceeds.
Austrian VAT & transfer taxes
| Taxpayer | Basis of tax | Tax levied | Tax rates (2023) |
|---|---|---|---|
| Resident company | Rental income Transfer of real estate Transfer of real estate Transfer of real estate | Value-Added Tax Value-Added Tax STRAIGHT Registration Fee | 0% / 10% / 20% 0% / 20% 0.5% - 3.5% 1.1% |
| Non-Resident company | Rental income Transfer of real estate Transfer of real estate Transfer of real estate | Value-Added Tax Value-Added Tax STRAIGHT Registration Fee | 0% / 10% / 20% 0% / 20% 0.5% - 3.5% 1.1% |
| Resident individual | Rental income Transfer of real estate Transfer of real estate Transfer of real estate | Value-Added Tax Value-Added Tax STRAIGHT Registration Fee | 0% / 10% / 20% 0% / 20% 0.5% - 3.5% 1.1% |
| Non-resident individual | Rental income Transfer of real estate Transfer of real estate Transfer of real estate | Value-Added Tax Value-Added Tax STRAIGHT Registration Fee | 0% / 10% / 20% 0% / 20% 0.5% - 3.5% 1.1% |
Value Added Tax – Rental income
Companies
Introduction
Value added tax (VAT) is a tax based on the added value of a product or service at each stage of the supply chain.
Liabilityto tax
Rental income is subject to Austrian VAT if the rented object is located in Austria.
Basis of tax
As a general rule, business rentals are exempt from VAT. However, it is possible to opt out of this exemption under certain conditions, in which case the VAT rate is 20%.
Residential lettings are always subject to 10% VAT.
Individuals
The same rules apply as for companies.
Value Added Tax – Transfer of real estate
Companies
Introduction
The sale of property is generally a VATable transaction if the property is located in Austria.
Liability to tax
The sale of real estate is generally exempt from VAT. However, it is possible to opt out of this exemption, in which case the VAT rate is 20%.
Individuals
The same rules apply as for companies.
Real Estate Transfer Tax
Companies
The acquisition of Austrian real estate is subject to real estate transfer tax. The rate varies from 0.5% (e.g. contribution of real estate) to 3.5%. The transfer tax is normally payable by the purchaser. The transfer tax is not directly deductible as a business expense. However, it does form part of the acquisition costs.
There is also a registration fee of 1.1%.
A transfer of shares is not normally subject to transfer tax. However, if at least 95% of the shares of a company that owns real estate are transferred to new shareholders, the acquisition is subject to real estate transfer tax. The basis of assessment for the transfer tax is the market value of the immovable property (property valueas defined in the Real Estate Transfer Tax Act) at a rate of 0.5%.
Individuals
Individuals acquiring real estate in Austria are subject to real estate transfer tax. The basis of assessment for the transfer tax is the market value of the property (property valueas defined in the Real Estate Transfer Tax Act) or the value of the consideration for the property (usually the purchase price of the property). The tax rate varies from 0.5% to 3.5%, depending on the relationship between the parties involved and whether or not the transfer is a gift.
There is also a registration fee of 1.1%.
If at least 95% of the shares of a company that owns real estate are transferred to new shareholders, the acquisition is subject to real estate transfer tax. The basis of assessment for the transfer tax is the market value of the immovable property (property valueas defined in the Real Estate Transfer Tax Act). The tax rate on the transfer of shares in a company holding real estate is 0.5%.
Austrian local taxes
| Taxpayer | Basis of tax | Tax levied | Tax rates |
|---|---|---|---|
| Resident company | Unit value* | Property tax | Depend on the municipality |
| Non-Resident company | Unit value | Property tax | Depend on the municipality |
| Resident individual | Unit value | Property tax | Depend on the municipality |
| Non-resident individual | Unit value | Property tax | Depend on the municipality |
* This is a certain value for tax purposes which is determined by the authorities.
Introduction
Every municipality levies an annual property tax on Austrian real estate. This annual municipal tax is deductible from rental income.
Liability to tax
Every owner of residential or commercial buildings in Austria is liable to local property tax.
Basis of tax
The property tax is based on the unit value. This is a certain value for tax purposes that is determined by local authorities. In general, the tax rate is 0.1 – 0.2% annually. However, municipalities are allowed to increase the property tax by up to 500%, which results in a maximum tax rate of 1.0%.
Austrian net wealth/worth taxes
There is no wealth tax for individuals or companies owning property in Austria.
Ownership structures for Austrian real estate
Commonly used ownership structures for Austrian real estate
Limited
A ‘GmbH’ (in German:Limited liability company) is the Austrian version of a limited liability company and is the most common form of property ownership in Austria. The amount of the contribution determines the share (capital contribution) of the shareholder. The shareholders of a GmbH are not personally liable for the debts of the company.
Individuals who hold shares in an Austrian company receive capital income which is taxed at 27.5%. Profits earned by the GmbH itself are subject to corporate income tax at a flat rate of 24% (to be reduced to 23% from 2024).
Partnership & joint ventures
Investments in real estate are also often made on a collective basis by several legal entities and/or individuals. For Austrian tax purposes, there is no distinction between the taxation of partnerships and joint ventures.
Limited partnerships
A typical limited partnership is the KG (in German:limited partnership). A KG has at least one managing partner and one limited partner. The managing partner has unlimited liability, while the limited partner’s liability is limited to the amount of his or her contribution. If all but one partner leave the KG, the company ceases to exist. The KG is treated as transparent for tax purposes and is therefore not subject to income tax. Individual partners in a KG are subject to personal income tax, which ranges from 0% to 55% (see above); partner companies are subject to corporate income tax.
General partnerships
A typical general partnership is the OG (in German:Open Society). The OG has at least two managing partners (individuals/companies) who are fully liable. Liability cannot be limited. The OG is treated as transparent for tax purposes and is therefore not subject to income tax. Individual partners of an OG are subject to personal income tax, which ranges from 0% to 55%, while partner companies are subject to corporate income tax.
Trusts
Trusts are legal instruments which are not known as such in Austrian law and are therefore not specifically recognised in Austrian tax law. In order to qualify a foreign trust as a transparent or non-transparent entity for Austrian income tax purposes, the Austrian tax authorities will generally ask which persons have the legal and effective right to dispose of the trust’s assets and who is able to make the relevant arrangements. If such rights or powers are vested in a beneficiary or other related person, it is likely that the income generated by the trust will be directly attributable to that person and the trust will qualify as a transparent trust.
Private foundation
The Austrian Private Foundation has no shareholders, only beneficiaries. It is treated as non-transparent for tax purposes. Free contributions to the private foundation are taxed at a flat rate of generally 2.5% (input tax). Interest from bank deposits, interest from bonds, income from capital gains and derivates, and income from the private sale of real estate are taxed at 24%interim tax(to be reduced to 23% from 2024). Rental income and capital gains from the sale of real estate that are business assets are taxed at 24% (to be reduced to 23% from 2024). Contributions to beneficiaries are taxed at 27.5% capital gains tax. There is a credit for theinterim taxwhen contributions are made to beneficiaries, resulting in a total tax liability of 27.5% of the income generated and distributed to beneficiaries.
Foreign partnership
The residence of a partnership is determined by the place where important business decisions are usually made. Generally, this will be the place where all the partners meet regularly.
If a foreign partnership has a permanent establishment in Austria, the partners are subject to Austrian income tax as business income. Austrian real estate will usually give rise to a permanent establishment in Austria, but this is not the only possibility.
Specific real estate vehicles for Austrian real estate
Real Estate Investment Trusts
Real Estate Investment Trusts are regulated by the Real Estate Investment Trust Act (Real Estate Mutual Funds Act), which governs the determination of profits and taxation. An investment company holds the assets of the real estate investment trust as trustee for the investors. A Real Estate Investment Trust is treated as transparent for tax purposes. Therefore, the beneficiaries of the trust are subject to capital gains tax at a rate of 27.5%. If the beneficiary is a corporation, the corporate income tax is 24% (to be reduced to 23% from 2024). The Real Estate Investment Trust can be used for a wide range of public investors (open trust) or for a limited number of beneficiaries (closed trust).
FAQs
Can American citizen buy property in Austria? ›
Yes, foreigners are allowed to buy real estate in Austria. If they don't have a residence permit in Austria, they need to obtain a permit for buying real estate. A resident of the country — a foreigner with a residence permit or permanent residency — can purchase real estate to live in.
Why are houses in Austria so expensive? ›A big reason for this is the increasing cost of building materials, which are rising sharply amidst higher inflation and cost of living. Construction wages are also rising by around nine percent, partly due to cost of living and partly due to Austria's current shortage of skilled labour.
What is the best real estate website in Austria? ›immobilienscout24.at ranked number 1 and is the most visited Real Estate website in Austria in May 2023, followed by immowelt.at as the runner up, and wg-gesucht.de ranking at 3rd place as the leaders of the Real Estate websites in Austria.
How much does it cost to build a house in Austria? ›Currently, a new house in Austria costs an average of €359,000. New-build properties are increasing in cost with the average in Styria sitting just over €300,000, while Lower Austria is up at €338.000.
Can a US citizen retire to Austria? ›Austria offers several visas to Americans, but the most popular one for retirees is a settlement permit. To qualify for a settlement permit, a person must prove that he or she has sufficient funds, health insurance and a place to live.
Is it cheaper to live in Austria than the US? ›One would be safe in stating that the cost of living is generally more expensive in Austria than in the United States. As in most European countries, the cost of living in Austria is rising steadily. Food prices are probably somewhat higher than those in the United States.
What are the disadvantages of living in Austria? ›Con: Taxes
Austria uses a progressive tax rate system like in the U.S., but the tax percentages are greater. You can expect to pay more than double the taxes in Austria. For example, if you have an average salary of €60,000 in 2022, you will pay 48% of that income in taxes in Austria.
Living costs
The cost of living in Austria is just slightly above that in Germany. In Austria, the living cost is estimated at around €1,100 per month. While in Germany, it is estimated to be €861 per month. However, the cost of rental properties is lower in Austria than in Germany.
A family of four estimated monthly costs are 3,604.9$ (3,300.3€) without rent. A single person estimated monthly costs are 1,051.6$ (962.8€) without rent. Cost of living in Austria is, on average, 8.1% lower than in United States. Rent in Austria is, on average, 49.6% lower than in United States.
Where is the hottest Real Estate market in the country? ›That's the takeaway from a new Bankrate analysis of nearly 200 housing markets around the country. The personal finance website ranked the top most attractive and active housing markets and found that Gainesville, Georgia, was No. 1.
What is the biggest marketplace in Austria? ›
amazon.de ranked number 1 and is the most visited Marketplace website in Austria in May 2023, followed by willhaben.at as the runner up, and etsy.com ranking at 3rd place as the leaders of the Marketplace websites in Austria.
Where is the best Real Estate market in Europe? ›Some of the best European countries for property investments are Paris, Limassol, and Lagos. If your main search is to buy property in Europe under 100k, it may not be as easy as Europe is a popular tourist and economic destination, which means that the property market there is in high demand.
What is Austria main source of income? ›Austria is a highly developed industrialized country with an important service sector. The most important industries are food and luxury commodities, mechanical engineering and steel construction, chemicals, and vehicle manufacturing.
Is healthcare free in Austria? ›Healthcare in Austria is completely free for those with low or no income; others have to pay a small amount in social contributions to be eligible for state-funded health insurance.
What's the average salary in Austria? ›The average median salary in Austria, according to Statistik Austria, is €31,407. This is an estimated net income of 23 617 (after taxes) which works out to around €1,968 per month. Separating the genders, we find that men earn an average of €37,707 while women earn slightly less at €24,309.
How hard is it to move to Austria as an American? ›Requirements for obtaining a residence permit include proof of income and accommodation in Austria, health insurance, and proof that there are no legal impediments for an American citizen to relocate to Austria.
Does the US allow dual citizenship with Austria? ›General information. Generally speaking, Austrian citizenship law does not allow dual or multiple citizenships. This principle is only waived in certain special cases.
Where do most Austrian Americans live? ›Austrian-American Communities in the United States
The U.S. communities where born Austrians make up more than 1% of the total population are: Hillside Lake, New York 1.4% Redway, California 1.3% Black Diamond, Florida 1.2%
It has been estimated that there are 11,000 Americans living in Austria. Living in Austria is an incredible experience for a variety of reasons, including the culture, the people, the architecture, the parks, and the skiing.
How long can an American live in Austria? ›Non-EU/EEA/Swiss citizens need a type to get a long-stay visa and a residence permit if they plan to stay for longer than six months in the Austrian territory.
What is it like to live in Austria as an American? ›
Living in Austria means enjoying easy access to world-class museums, opera houses, theaters, and concerts. Furthermore, you will find yourself constantly surrounded by stunning architecture, stately churches, and quaint coffee shops.
What health issues does Austria have? ›The top five common diseases in Austria that cause the most deaths are Alzheimer's, lung cancer, ischemic heart disease, COPD and cerebrovascular disease — all of which are noncommunicable. Statistics prove that Austrians drink a substantial amount more than their European peers.
Does Austria have high quality of life? ›It is the only German-speaking city rated among the 15 most liveable cities in the world, as concluded by the Expat Insider 2021 survey report.
Is homelessness a problem in Austria? ›Source: Statistics Austria; BMASGK indicators on social inclusion (BMASGK 2018, 29). The total number of registered homeless people amounted to 21,567 people in 2017, an increase of 21% since 2008. It consisted of 13,926 people who had registered as roofless, and 8,688 who were living in institutions for the homeless.
Is Austria a good place to retire? ›Austria is known for the high-quality lifestyle it offers its citizens and is placed in second place for life quality. Many Austrian cities rank among the top most livable cities in the world due to freedom, women's and human rights, and green spaces. Healthcare.
What is the cheapest city to live in Austria? ›The cost of living in Austria varies significantly between different provinces and cities. In general, Vienna and Innsbruck are consistently ranked the most expensive cities in Austria, while the cheapest, or most affordable, cities include Graz and Klagenfurt.
Is it cheaper to live in Austria or Switzerland? ›While Austria has been historically less expensive to live in than Switzerland, its much higher inflation level means the current cost of living disparity is not as great. According to Numbeo, consumer prices are 69 percent higher in Switzerland than in Austria.
What is the average retirement age in Austria? ›The extent to which Austrians have taken early retire- ment is remarkable: 85 percent of men and 70 percent of women retire before the statutory retirement age of 65/60 years. The average retirement age has fallen to 58.5 years for men and 57.1 years for women.
How much tax do you pay in Austria? ›If your annual salary in 2022 was less than €11,000, you won't pay any income tax at all. This will increase in 2023 to €11,693. For a yearly income up to €18,000, you'll pay a 20% income tax rate in Austria — 700 euros more than in Germany. This will also increase to €19,234 for 2023.
How much is the average apartment in Austria? ›In the second quarter of 2019, average rent in Austria, including running costs, was 530 EUR (590 USD) per month per property, and 8 EUR (9 USD) per square meter (10.76 square feet) of living space. The average rent in Austria in 2018, without running costs, was 385 EUR (425 USD).
Where is real estate growing the fastest? ›
| Metro area | Growth | |
|---|---|---|
| 1. | FarmingtonNew Mexico | 20.3% |
| 2. | North Port-Sarasota-BradentonFlorida | 19.5% |
| 3. | Naples-Immokalee-Marco IslandFlorida | 17.2% |
| 4. | Greensboro-High PointNorth Carolina | 17% |
| Price Growth Rank | Country / Region | Real Year-over-Year Change (%) |
|---|---|---|
| 1 | 🇹🇷 Türkiye | 51.0 |
| 2 | 🇷🇸 Serbia | 7.0 |
| 3 | 🇷🇺 Russia | 9.7 |
| 4 | 🇲🇰 North Macedonia | 1.0 |
Guests find most beautiful mountain and lake landscapes, numerous cultural institutions, vibrant cities, exquisite delights and friendly people. Austria's attractive cities with rich history and the international well known “Austrian cuisine” have been shaped by the Habsburg Empire.
What item is Austria known for? ›Porcelain is one of the most famous and significant Austrian traditions and heirlooms. It is also a very common gift at weddings. Original porcelain is being made in Austria since 1718 for the royal court.
What is the main business in Austria? ›The most important industrial sectors in Austria are: Food and Drink industry. Mechanical and Steel Engineering. Chemical and Automotive industry.
What is the fastest growing real estate market in Europe? ›Sweden -- long one of Europe's hottest housing markets -- shows the largest increase, with average prices skyrocketing 176% between 2021 and 1996.
Can a US citizen buy property in Europe? ›There is no limit on US citizens buying or selling properties in Italy thanks to something called mutual agreements. These apply between Italy and foreign citizens meaning that you don't need any special documents or pay higher taxation on property when compared to citizens from within the EU.
Is Austria more rich than Germany? ›I exaggerate: no question that Austria, in terms of GDP per capita, is one of the wealthiest countries, wealthier than Germany. Nevertheless, Switzerland plays in an entirely different league.
Is Austria an affluent? ›If this is calculated per inhabitant, taking purchasing power parity into account, then Austria ranks 17th in the list of the richest countries. Inflation in Austria in 2022 was around 8.55%. Within the EU, the average in the same year was 9.22 percent. In the United States, it was most recently 8.00%.
What is Austria's number one export? ›The major export commodity in Austria is the automobile and its components, machinery and paper products. Austria's largest exports markets are European Union, United Sates and Switzerland.
Is dental free in Austria? ›
The basic dental treatments covered by state care include check-ups, cleaning, and fillings. For most other things, you will have to pay.
Is healthcare free for Americans in Europe? ›Almost all the countries in Europe have a universal healthcare system. There are people who call it a “free healthcare” system but it is actually not free. Each nation has its own variation; however, a common feature is that everyone has to pay for healthcare as a society.
Are prescriptions free in Austria? ›The Pharmaceutical Benefits Scheme (PBS) lets Australians use lots of prescribed medicines without paying full price. The PBS is part of the Australian Government's National Medicines Policy. The National Medicines Policy aims to balance the need for medicines with good health results and economic limits.
What is the best paying job in Austria? ›What is the best-paid profession in Austria? The best-paid job in Austria is not a complete surprise: “medical doctor” tops the list of Austrian occupations with good salaries, with an average wage of €72,000 annually.
What is the highest paid job in Austria? ›Surgeons are medical professionals that perform advanced procedures. Surgeons work during office hours and operative hours. This is why they are paid quite well in Austria and other parts of the world. As a surgeon, a person can earn around 7,890 EURO.
Does Austria allow dual citizenship with US? ›General information. Generally speaking, Austrian citizenship law does not allow dual or multiple citizenships.
Is a US license valid in Austria? ›The U.S. driver's license must be accompanied by an international driver's permit (obtainable in the U.S. from AAA) or by an official translation of the U.S. driver's license, which can be obtained at one of the Austrian automobile clubs (ÖAMTC or ARBÖ ).
How long can an American stay in Austria? ›Entry, Exit and Visa Requirements
Prospective residents or anyone intending to stay longer than 90 days must obtain the appropriate visa. Visit the Embassy of Austria's website for current visa information or the Government of Austria's website on migration.
Austria has entered into DTTs with all major trading countries. Some of the treaties provide for elimination or partial elimination of double taxation by foreign tax credit (e.g. Canada, Japan, United Kingdom, United States).
Can a US citizen become an Austrian citizen? ›It is possible to apply for Austrian citizenship by naturalization generally after 10 years of continuous residence in Austria. However, in certain cases it is possible to apply earlier. Additional requirements include: knowledge of the German language 'having due regard to the alien's personal circumstances'
How hard is it to get Austrian citizenship? ›
They must have resided in Austria for at least six years, and been married and living in a common household for at least five years. Those who have lived in Austria for 30 years may also be granted Austrian citizenship.
Can you claim Austrian citizenship by descent? ›Children acquire citizenship at the time of their birth if their mother is an Austrian citizen. The same applies if the parents are married and only the father is an Austrian citizen.
Do they drive on the left or right in Austria? ›Unlike in the UK, motorists drive on the right-hand side of the road in Austria and overtake on the left – which can take some adjustment if you're used to driving on the left.
Is it difficult to drive in Austria? ›Driving in Austria is made quite easy by very simple traffic rules, respectful drivers and generally good road conditions.
Can an American rent a car in Austria? ›Requirements to rent a car in Austria include: A valid driver's license that has been held for at least one year. A valid passport. If your license is written in non-Latin characters, you will also need to present an international driver's license.
Can we drink tap water in Austria? ›The water reaches consumers mostly in a natural state and with excellent quality. Comprehensive monitoring - from source to tap - ensures a high level of protection for drinking water supplies in Austria. Drinking water suppliers must have the water they supply tested at regular intervals.
How many American expats live in Austria? ›It has been estimated that there are 11,000 Americans living in Austria. Living in Austria is an incredible experience for a variety of reasons, including the culture, the people, the architecture, the parks, and the skiing.
How much bank balance is required for Austria tourist visa? ›As such, the requirement of the bank balance you need for an Austria visa is regulated on an individual or case-by-case basis. However, you are generally advised to account for at least EUR 100 (equivalent to INR 9,012.81)* per day, as this is the average amount of money a tourist spends in Austria.
Do expats pay taxes in Austria? ›Who Has to File Taxes in Austria? In Austria, tax laws require anyone who earns income in the country to file a tax return. This applies to both residents and non-residents, including foreign nationals.
What is the retirement tax in Austria? ›Pensions in Austria. Austria offers two types of pensions – contributory and non-contributory. Employers subtract 10.25% of the gross income as the employee's contribution. Then, they add 12.55% as the employer's contribution.