Austrian Buyers’ Guide
Austria is a gateway between east and west Europe and borders Switzerland, Liechtenstein, Germany, the Czech Republic, the Slovak Republic, Hungary, Slovenia and Italy. The country is divided into nine Federal Provinces
and benefits from a diverse landscape ranging from the Eastern Alps to the Bohemian Massif. Because of its ideal location Austria makes a great base from which to explore the whole of Europe.
The River Danube flows approximately 220 miles through Austria on its way from the Black Forest in southern
Germany to the Black Sea.
Austria’s highest mountain is Grossglockner (3,798m)
which lies in the centre of the Hohe Tauern National Park and is part of the largest nature reserve in the Alps. This mountainous country is nearly half covered with forests and has freshwater lakes that clean enough to drink. For many, Austria has the perfect climate; warm summer days with temperatures around 25ºc to 35ºc and sunny, chilly winters that hover around 0ºc. The mountains are
snow-covered in winter but warm and green in summer.
Perfect for dual seasons
Introduction to Austria
Who Can Buy?
Austria has been a member of the EU since 1995. Although EU-citizens are allowed to buy and live permanently in
any house they wish in Austria, these rules do not apply
to EU (or non-EU) citizens when it comes to buying a
holiday home.
Austria is divided into nine self-governing Federal Provinces and each of these Provinces has their own
rules when it comes to buying a holiday home:
EU Citizens
EU citizens can buy a holiday property in any of Austria’s nine Provinces and the process is very straightforward.
EU Companies
If you own an EU company it is also possible to buy in
the company’s name.
If you are a non-EU citizen it is not possible to buy a
holiday home in The Tyrol Province, Salzburg Province or the Vorarlberg Province. It is however possible to buy in the other provinces and to do this you would need to
apply for a foreigner purchase permit which should not be a problem to obtain. If you are the owner of an EU
company then it is possible to buy anywhere in Austria.
The process of buying a property in Austria is very straightforward. The notary, who is a semi-public official, will act on behalf of both the purchaser and the vendor, he will draw up the deed of sale and all the documents required to transfer the legal ownership. The notary has a duty to protect the interests of both parties.
When buying a property, both the purchaser and the
vendor are required to attend the notary’s office to sign the deed of sale in his presence. Alternatively both parties can sign a power of attorney authorising one of the secretaries working in the notary’s office to sign the sales deed on their behalf. In this case the buyer will receive from the notary a copy of the deed of sale in German and a professional English translation along with a power of attorney (also in English) which authorises the notary’s secretary to sign on their behalf.
The buyer will need to take the power of attorney to either a Notary Public (not a solicitor) in their country of residence to have their signature witnessed and (in the UK) the Notary Public will send the document off to the foreign office to have it ‘legalised’. Alternatively,
documents can be signed and legalised at the same time
if taken to the Austrian Embassy. If preferred, buyers can hop on a plane and sign in person at the notary’s office!
What are the Purchase
Costs?
Purchase costs for buying a property in Austria work out about 6.6% of the gross purchase price. The purchaser will be required to pay the notary fees after the contract of sale has been signed.
Fees are calculated as follows:
• Purchase Tax ‘Stamp Duty’ – 3.5% of the gross price • Registration in the Land Registry – 1.1% of gross price • Notary’s fees – between 1.5 and 2% of gross price • Court costs, administration fees – approx. 150 euros
Austrian banks will fund up to 60% of the purchase price and usually the loan period will be between 15 and 25
years.
Some banks charge a set-up fee and this is usually around 2% of the value of the loan. They will also charge an appraisal fee of 0.5% and you will need to pay the notary a fee of 1.5% of the amount of the mortgage to
register the mortgage in the land registry.
Variable interest rates are currently at around 3% and
banks can also offer one year fixed rate or five year fixed
mortgages at very competitive rates. We have several
banks we can recommend. Please contact us for further
details.
New build properties are paid for in stages and all
payments are made through the notary who acts as
trustee for your money. The instalments are made into a client account and the payments for each stage are only released from the client account when an independent surveyor has inspected each stage and officially signed it off with the notary. This gives everyone security as the
developer knows not to start building until the client’s monies are in the notary’s client account and likewise, buyers know that no monies will leave the account until works have been completed.
Purchase payments will typically be something like this:
• 15% at start of building works
• 35% on completion of the shell and roof
• 20% on completion of plumbing and electrical
installations
• 12% on completion of the façade & windows • 12% on completion of the property
• 4% on hand over of keys
• 2% after three years (or after developer providing a
bank guarantee or insurance to the purchaser)
Construction in the Alps takes place in the summer months,
as during the winter months the ground is frozen and
covered in snow so construction is put on hold. Because
of this, Alpine developers optimise their build schedule
and usually build and complete an apartment building or several chalets in one summer season. The advantage to buyers is that during the winter they can sign their purchase contract to secure their property but will not have to start making stage payments until construction starts in the spring.
Building Guarantees
All new build Austrian property are covered by a 30 year building guarantee against all building defects, and developers will usually guarantee building fixtures for
two years.
Furnishings and Finishes
Some of the properties we have available to buy have all the furnishings included in the price. The developers in these projects offer a ‘turn key’ service which means they provide every comfort for owners so that their
property is completely ready to occupy.
Where furnishings are not already included in the purchase price it is possible to purchase optional furniture
packages to enable buyers to move in to their chalet with everything complete and in place. We work closely with these developers and interior designers to provide
an extensive choice to suit every taste ranging from the
ultra-modern to romantic traditional styles.
These furniture options are extremely flexible and affordable and include everything you will need such as sofas, wardrobes, beds, cutlery, crockery, and linen etc. For more information on which properties already include the cost of furniture packages please either contact us
or see individual property brochures. Please note that
although the cost of the furniture packages is included in some of the properties, for mortgage purposes this cost must be deducted as banks will not lend on furniture.
Most of our chalets and apartments are built either to-order or ‘unfitted’ enabling you to personalise your property with a tailor-made finish which is included in the price. You can choose from an extensive range of kitchens, bathroom fittings, flooring, and wall tiles etc.
Running Costs
The expenses of a development of chalets or an apartment
building are usually divided up proportionately between
the owners, according to the size of their property. As a rough guide the running costs for a property usually
work out about 3-5 euros per m2/month and this charge
would cover everything apart from your own personal usage of heating and electricity. It would cover snow clearance, rubbish removal, cleaning and lighting of the communal areas, and maintenance of the gardens etc.
These expenses include building insurance and local property taxes.
Austrian property offers superb rental potential for buyers
who are interested in making their chalet or apartment
available to holiday-makers. Most of our buyers are keen
to rent their property when they are not using it so that it can be earning an income.
There are always lots of exciting things to do or see for
owners and their guests in the mountains, whether it is
Polo in the snow in Kitzbühel, Jazz concerts on the piste
in Bad Gastein, Mozart evenings in Salzburg or simply enjoying live music in a beer garden in the summertime. We work very closely with all the Austrian alpine tourist
boards to produce a twice-yearly diary of events for
owners and their guests outlining the exciting things to
do. For more information on this please contact us
One of the great benefits of buying in the Austrian Alps is that it offers two high-seasons in a year: winter for ski holidays and summer for hiking, cycling and swimming
in the warm lakes.
Depending on which property you buy you have two
rental options. One option is using a large professionally managed tour operator who will efficiently handle all
your rentals when you are not using your property and
then pay you a quarterly income from the rentals as well
as handle all your bookkeeping.
Alternatively you can rent your property yourself with the help of a local tour operator or perhaps even make
your own web site to advertise your property. Whichever
option you decide we have lots of contacts and advice we can offer you regarding the rental of your property. There are also plenty of dedicated management companies we can put you in touch with to deal with the hand-over of keys for your guests and the laundering and cleaning of
your property when guests have departed.
Prefer not to Rent...
If you prefer not to rent your property, we are delighted to be able to offer some properties which have a rare
“second home” permission. This means you can keep your property as a private residence with no obligation to rent.
The majority of properties available to overseas buyers are classified as “rental homes” as opposed to “second homes” and are therefore obliged to be available for
rental when owners are not using them. Although these
properties have rental obligations, many of them have the flexibility to be rented privately just through friends and family if they wish. Owners can even spend up to
six months a year there.
In some other projects the developer’s have made
arrangements for owners to maximise their income
potential and these properties are rented out through a
professional tour operator so everything is taken care of for the owner. You simply need to book-out the weeks for your own private use and the rest of the time your property is being advertised and professionally rented.
As an owner you can relax in the knowledge that your
property is earning an income for everything is being taken care of by a dedicated management company.
There can be some great tax advantages to purchasing in
this way. Please see the chapter below for more details. The tourism industry forms an important part of Austria’s
economy accounting for over 15% of its GDP and as a result Austria endeavours to take good care of its guests offering exciting Alpine events virtually every week in
the villages throughout the year and enjoys undoubtedly the best après-ski in the world.
It is because of this important tourism industry that the Austrian government does not want owners of chalets to leave their properties empty for large parts of the year.
Owners who do not live permanently in the mountains are encouraged to make sure that their property is
regularly visited by holidaymakers as it is important for the infrastructure of the villages to have a good flow of
tourism.
It is also important for the charm and beauty of the
Alpine regions that these chalets are occupied. Locals
and tourists alike enjoy seeing chalets with flowers in
the window-boxes in summertime and the ski pistes busy and buzzing throughout the winter. The advantage
to owners is that they can benefit from their property earning an income for them when they are not using it.
Buying a “rental property” has tax benefits which could save you up to 20% on the build cost of your property. To be eligible for some or all of the VAT discount on your
purchase you would be expected to rent your property
professionally when you are not using it.
In order to become eligible for a VAT refund on
your purchase you will need to rent your property
‘professionally’ and you will need to show an overall profit over a period of 20 years.
To claim back the tax you need to register for VAT
(we can recommend a tax advisors to assist you with this). In some cases to claim the tax back you need to initially pay the gross price and then claim the tax back through your tax advisor which usually takes two to three months and it is possible to obtain a
bridging-loan for this purpose. However, in some of the property
we sell this is not necessary as the developers will have
pre-arranged everything for you so you will only need to
pay the net price.
Buyers have a choice either to claim back all or part of
the VAT. You are permitted to claim back all the VAT, the
full 20%, if you rent your property commercially and do not use it yourself. If you declare in advance that you will be using the property partly for your own private use then the amount of VAT you may reclaim depends on the ratio of personal use to rental use. If you would like further information on this subject please contact us and we will email you our specific Tax-Back Fact Sheet.
If you decide to take advantage of the VAT rebate and
rent your property to holiday-makers you will be required
to pay income tax on your rental income. Much of these taxes can be offset and there are a number of ways to
reduce the tax you pay on your rental income.
For example, the interest you pay on your mortgage can
be written off against rental income profits and you can also write off 10% of the costs of your furniture package
as depreciation against your rental income.
If you rent your property to holiday-makers and pay the income tax for these rentals in Austria then there is an 11,000 euro income tax exemption per person per year, so if two people purchase a property together there is a tax free allowance of up to 22,000 euros per year.
If you claim the VAT back on your purchase you will
also be required to become VAT registered with the tax
authorities for 20 years, but after this time you can
de-register and will no longer be required to make annual tax returns.
You will need to charge VAT at a rate of 10% on your
rentals which can then be reclaimed each quarter upon
the filing of accounts. We always recommend a choice of
local tax advisors to help with your tax returns.
The tax advisor will charge a one off fee to set up your registration (please contact advisors directly for prices) and annual tax returns will cost in the region of 300 – 500 euros per year.
Tourism Tax
When you rent your chalet or apartment you will need to
charge your guests tourism tax for the nights they spend in your property. These rate of tax varies from resort to resort bus as a rough guide it is somewhere between 80 cents and 3 euros per night per person for each guest over the age of 14 years old
Capital Gains Tax
The housing market in Austria has been subject to a
number of controls in order to keep house prices within reach of locals, especially in the tourist areas. Capital Gains Tax of 25% will apply to any profits you have made on your property (effective since April 1, 2012).
Inheritance Tax
Inheritance tax has been abolished in Austria (effective since August 1, 2008).
Contact us for advice or to arrange a visit
Brochure current as of: 23 January 2015
Company Profile
Investors in Property specialise in the sale of ski chalets and apartments in Switzerland, Austria, France & Italy. We have over 20 years’ experience and an unrivalled knowledge of well established and up and coming ski resorts. We will provide expert advice and professional guidance through every step of your purchase. If you
have any questions or need general advice please do not hesitate to contact us.
Viewing
If you are looking to buy a property in Austria, then
Investors in Property can help arrange your visit. We
have a good selection of chalets and apartments for sale
and know the resorts well so whether you are travelling
alone, with a partner, or bringing the whole family we can suggest the perfect place to stay. Simply let us know which dates you have in mind and we will arrange for one of our representatives to meet you and show you around. All you need to do is to book your flight and rent a car and we can help organise everything else for you. Ask us for our visits information and we will recommend
some charming hotels to make sure you get the most out
of your visit.
Contact
Jessica Delaney – Investors in Property Tel: +44 (0)7971 258 440
jessica@investorsinproperty.com
Disclaimer: Whilst we make every attempt to ensure the accuracy and reliability of the information contained in all brochures and the company website, we are reliant upon information provided by third parties and therefore, the company, its employees and agents will not be responsible for any loss, however arising, from the use of, or reliance upon this information. The sales deed prepared by the local Notary will contain all the terms of the sale and no warranty or representation made by an other person which is not specifically included in that deed of sale is legally enforceable. These particulars and the company website do not form part of any offer or contract and must not be relied upon as statements or representations of fact. © Alpine Marketing 2015 Registered Office: 120 West Heath Road, London NW3 7TU, Registered in England. No. 06423236
