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The Austrian Property Market
In considering an overview of real estate in Austria,
the most striking fact associated with real property
in that country is the fact that overall the costs
associated with property in Austria is higher than
any other country in Europe. In addition, the cost
of living in Austria generally is higher than any
other country in Europe at the present time.
With this in mind, it is also important to note that
the tax rate in Austria when it comes to the buying
and selling of real estate in that country also runs
rather high. For example, any capital gains that are
experienced on the sale of real estate is taxed in
Austria as regular income at the significant rate
of 34%. There are exceptions to this taxation. First
of all, a piece of real estate that is used as a primary
residence is exempt from this tax. Additionally, all
real estate that is held for ten yours or more is
exempt from this taxation as well. Therefore, many
people, including foreign nationals, hold on to investment
real estate for at least ten years before turning
around and selling the property for a profit.
Historically, Germans have been the primary group
of foreign nationals that have taken to purchasing real estate in Austria.
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As will be discussed in greater detail later, foreign nationals
have a history of investing in real estate in Austria. In
recent years, significant steps have been taken and made
to streamline and simplify the manner in which foreign nationals
can invest in Austrian property. This particular is
true when it comes to foreign nationals from the countries
that make up the European Union.
A foreign national that is interested in investing in real
estate in Austria needs to keep in mind that the cost of
real estate in that country is higher than in any other
country in Europe. Thus, for the most part, individuals
who find themselves investing in real estate in Austria
tend to be a bit better heeled and tend to have a higher
amount of disposable income.
The tax implications of buying and selling real estate in
Austria also need to be kept in mind when it comes to a
foreign national making an investment in real estate in
that country. These implications are set forth and discussed
previously .
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Residential
Real Estate in Austria - Single Family Properties |
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Foreign nationals do make the purchase of single family
residences and dwellings in Austria with some regularity.
Far and above, the greatest number of foreign nationals
who are purchasing single family residences in Austria are
Germans. Italians are coming in at second place with citizens
from other EU nations coming in rather far behind. Of course,
there are some people from other nations that are also making
the purchase of single family homes in Austria.
Most people who are foreign nationals who are purchasing
real estate in Austria are doing to to establish second
homes. For the most part, these homes are being used as
retreats and for holiday purposes .
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Residential
Real Estate in Austria - Apartments |
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Some foreign nationals have taken to purchasing apartments
in various locations throughout the country of Austria. For
the most part, these foreign nationals are purchasing these
apartments in the more urban areas in the country. In addition,
some foreign nationals are found to be purchasing apartments
in some of the resort communities in that country.
Apartments in Austria do not necessarily come cheaply. Indeed,
as has been referenced elsewhere, the costs associated with
real estate in Austria tends to run far higher than what is
found in other countries around the world .
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Austria is a prime vacation spot in the European community
in this day and age. Indeed, Austria has been a haven for
travelers and tourists for many, many years. With this in
mind, a goodly share of the real estate that is trading on
the marketplace at this point in time involves property that
is intended for vacation and holiday purposes.
Many foreign nationals who are purchasing vacation or holiday
property in Austria actually are finding these purchases
to be rather lucrative. For example, these foreign nationals
are buying real estate -- purchasing vacation properties --
that they then utilize in part for their own holiday purposes.
However, in addition to using these properties for their own
personal holiday purposes, many foreign nationals have commenced
the practice of renting or leasing these properties to other
people. It is this letting process that has proven profitable
over the course of the past couple of decades for an ever
growing number of foreign nationals.
Most real estate experts who have spent any time analyzing
and considering the property market in Austria have concluded that
this trend will continue well into the future. Because buying
and then renting vacation property has proven to be a solid
and profitable investment for so many people, even more foreign
nationals are attracted to such real property ownership all
of the time. This factor, coupled with the tax benefits to
be realized by holding onto real estate for a period of at
least ten years, has rendered these investments truly sought
after at this point in time.
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When considering the options for a mortgage on your overseas
property there are a couple of choices to consider;
- Do you consider raising finance on your existing property
in the UK to cover the whole cost of your purchase abroad?
A good idea if the interest rate in the country in question
is a lot higher than it is here in the UK as you will
pay a lot less in monthly repayments.
- Do you secure a mortgage against the property from a
local bank in the country of purchase? This can be a wise
option especially if the interest rate is lower than our
current UK interest rate. Most overseas mortgage / bank
lenders will require upto 30% deposit on mortgages. However,
you will need to give some thought to how you will service
your mortgage payments each month especially if you are
not living or earning in that country as you may well
lose out on exchanging money each time to cover monthly
expenses. Check out our Foreign
Currency page to see how you can save money in this
example
- Some Builders and developers may well offer their own
mortgage facilities on their properties for sale. This
can be beneficial to both parties depending on the logistics
of the mortgage or loan facility. Always check and compare
with the two options above before making your final descision.
For more details on Mortgages
in Austria visit our Mortgage page in the Austria
section.
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Specific
steps to buying real estate property in Austria |
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There are some restrictions on the manner in which foreign
nationals can purchase and possess real estate in Austria.
Indeed, historically there were some more significant steps
that a foreign national had to undertake in order to be able
to buy and own real estate in the country. However, in recent
years, there has been a general relaxation in regard to the
laws that govern foreign ownership of real estate in Austria.
The most significant changes and relaxations in the laws governing
foreign ownership of real estate pertain to foreign nationals
from the European Union nations. Simply, since the formation
of the EU and since Austria's reception into the EU, any foreign
national within the EU can purchase real estate in Austria
with ease. Indeed, for all practical purposes, at this juncture,
a citizen from the EU stands in essentially the same position
that a citizen of Austria stands when it comes to the purchase
and ownership of real estate in that country.
When it comes to foreign nationals from non-EU nations, there
remains one rather significant restriction on the ability
of these foreigners to buy and own real estate in Austria.
In short, before a foreign national from an non-EU can purchase
real estate in Austria, that person must obtain permission
from the local authority office in the locality in which the
foreign national desires to make the purchase of real estate.
Generally speaking, approval from the local authority is easy
to come by and will be granted in the vast majority of instances.
Additionally, this approval normally is forthcoming in a very
short amount of time.
Once a foreign national has identified a piece of real estate
that he or she is interested in purchasing, an oral offer
is made to the seller. If the seller accepts the offer --
or, if the seller puts forth a counteroffer that is acceptable
as such to the buyer -- a purchase agreement is prepared.
In Austria, more often than not, a solicitor or lawyer handles
the affairs associated with the buying and selling or real
estate.
As a matter of normal routine, the buyer will post a deposit
in the amount of 10% at the time the purchase agreement is
executed. The deposit will be held in escrow, pending the
completing of the sales transaction itself. If the sale falls
apart through no fault of the buyer, the buyer will have his
or her deposit returned.
When the completion date rolls around, the seller will be
responsible for making certain that all contract provisions
that apply to him or her have been satisfied. More often than
not this primarily includes making certain that the property
is free from any encumbrances that might interfere or impede
the conveyance of the real estate to the buyer.
At the time of the completion date, the buyer will need to
have his or her financing in place and in order. At the time
set for the completion of the transaction, the buyer will
pay the remaining balance due and owing on the purchase agreement.
Once this payment is made, ownership of the real estate will
transfer by operation of Austrian law to the buyer. However,
the new ownership of the real estate -- the ownership of the
buyer in the real property -- will need to be registered with
the Austrian Land Registry.
The process of fully registering the real estate with Austrian
Lad Registry can take up to three or four months in some instances.
It is not a quick process, more often than not.
When it comes to obtaining financing for the purchase of real
estate in Austria, Austrian banks generally will lend money
to citizens of that country and foreign nationals alike .
Property Abroad always recommends using a Solicitor
or Lawyer
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AUSTRIA
