Property taxes in Austria: is it expensive to buy property?

If you are planning to purchase a home in the Alpine nation, you should budget for total closing costs between 10% and 15% of the purchase price.

These expenses cover taxes, registration fees, and legal costs, making the initial acquisition quite costly compared to other European markets. However, recurring ownership taxes remain relatively low.

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What are the main property taxes in Austria?

Property owners in Austria encounter three primary tax categories:

• Real Estate Transfer Tax (Grunderwerbsteuer): A one-off payment due upon the purchase or transfer of property.
• Land Registry Fee (Grundbucheintragungsgebühr): A fee required to register your ownership in the official land registry.
• Real Estate Tax (Grundsteuer): A recurring annual tax levied by municipalities.

Who is subject to these taxes?

Anyone who acquires or owns real estate in Austria is generally liable for property taxes, regardless of their residency status.

• Residents: Pay standard rates on domestic property and are subject to unlimited tax liability on global income, including foreign rental returns.
• Non-residents: Liable for taxes on Austrian-sourced property income and transfers.
• Corporations: Pay corporate income tax (lowered to 23% in 2025) on property-related gains instead of progressive individual rates.

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Taxes on buyers

When purchasing a property, you must settle several one-off costs to legalize the transfer of ownership.

Real Estate Transfer Tax (Grunderwerbsteuer)

The standard rate is 3.5% of the purchase price for typical sales. If you acquire property within a family circle or through a donation, a sliding scale often applies, ranging from 0.5% to 3.5% based on the property value.

Land Registry Fee (Grundbucheintragungsgebühr)

To be recognized as the legal owner, you must pay a fee of 1.1% of the purchase price to enter your name in the land registry.

Value-Added Tax (VAT)

VAT of 20% typically applies to the purchase of new-build properties or commercial real estate. In some cases, if the property is intended for holiday rental, you may be able to reclaim this VAT, though strict rules apply.

Exemptions:

• Transfers with an assessment basis below €1,100.
• A temporary exemption (valid until early 2026) for primary residences up to a value of €500,000, aimed at helping first-time buyers.
• Transfers to non-profit or charitable institutions.

Taxes on sellers

Selling property in Austria triggers a specific tax on the profit made from the sale.

Real Estate Capital Gains Tax (Immobilienertragsteuer)

The standard rate for individuals is 30% of the net profit (sale price minus acquisition and deductible costs). For properties acquired before 2002, different “old case” rules may allow for a lower effective rate.

Exemptions:

• Primary Residence Exemption: No tax is due if you lived in the property as your main home for at least two consecutive years before the sale, or for five years within the last ten.
• Self-built Buildings: Gains on buildings you constructed yourself are often exempt, though the gain on the underlying land remains taxable.

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Taxes on homeowners: recurring payments

Once you own the property, the ongoing tax burden is generally modest compared to the initial purchase costs.

Annual Real Estate Tax (Grundsteuer)

This is a municipal tax calculated by multiplying a basic federal rate (usually 0.1% to 0.2%) by a municipal coefficient that can reach up to 500%. The final amount is usually less than 1% of the property’s assessed value.

Exemptions:

• Newly constructed residential buildings may receive a temporary exemption from Grundsteuer for several years, depending on the province and municipality.
• Properties used for public service, such as hospitals or schools.

Is rental income taxed?

Yes, rental income is treated as part of your total taxable income and is subject to progressive income tax rates.

For 2025, individual income tax rates range from 0% to 55%:

• Up to €13,308: 0%
• €13,308 – €21,617: 20%
• €21,617 – €35,836: 30%

Non-residents may face a slightly higher effective tax because the first €10,888 of income is often subject to a “fictitious” increase, effectively reducing the tax-free threshold.

You can deduct expenses such as maintenance, insurance, and mortgage interest from your gross rental income before calculating tax.

First vs second home: tax implications

Austria prioritizes primary homeownership through various reliefs.

• First Home: Buyers can often access the temporary RETT and Land Registry fee exemption for their main residence (up to €500k). They also benefit from capital gains exemptions upon sale if they meet residence requirements.
• Second/Investment Home: These do not qualify for the main residence transfer tax relief. Furthermore, income from short-term holiday rentals may be subject to additional municipal tourism taxes.

How to save money on your property purchase

Buying a house often involves moving large sums of money across borders.

You can use Wise to move money between your international account and your Austrian bank account, potentially saving on the high exchange rate markups often charged by banks.

With Wise, you get the mid-market exchange rate and transparent upfront fees.

You can also use Wise to pay the seller or your notary directly, avoiding some of the hidden costs associated with traditional international wire transfers.

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Wealth taxes in Austria

Austria does not currently levy a general net wealth tax or an inheritance/gift tax. Property falls under the standard transfer and income tax regimes rather than a separate wealth-based levy.

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How to pay your taxes

The main tax authority in the country is the Austrian Tax Office (Finanzamt Österreich).

• One-off purchase taxes: Usually handled and paid by your notary or lawyer during the closing process via the FinanzOnline portal.
• Recurring property tax: Typically paid in quarterly installments to the local municipality on 15 February, 15 May, 15 August, and 15 November.
• Income tax: Filed annually by 30 April (paper) or 30 June (online) of the following year.

When to speak to a tax professional

Given that Austrian property law involves complex assessment bases and temporary exemptions, it is usually a good idea to speak to a tax professional before signing a contract.

A specialist can help you determine if you qualify for the primary residence RETT relief and ensure your rental income deductions are optimized.

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