Authored by the expert who managed and guided the team behind the Austria Property Pack
Everything you need to know before buying real estate is included in our Austria Property Pack
Are you considering investing in Austria’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Research local trends and plans in Austria, as the property market varies by region
Austria's property market is shaped by regional factors, making it unique.
In Vienna, the capital, property prices are the highest, with central areas reaching up to EUR 14,000 per square meter, while outer districts start at about EUR 5,000 to EUR 6,000 per square meter. This contrasts with Salzburg, where central areas charge about EUR 9,900 per square meter, and rural areas start at EUR 5,900 per square meter. If you're eyeing Vienna, know that its robust economy often drives demand and prices up.
Rental yields also differ between city and rural areas. In 2023, the average rent in Austria rose by 8.2% year-over-year, with city centers seeing the highest increases. This means rental income can vary greatly depending on the location, a crucial point for investors. Vienna's strong economy can make it a hotspot for property demand, unlike some quieter regions.
Population trends are another key factor. Vienna's population is steadily increasing, pushing property prices up, while other regions might see a decline, leading to lower prices. Infrastructure projects, like public transportation investments, can boost property values in certain areas. Government initiatives aimed at regional development can also sway property markets by affecting prices and demand.
For instance, if a new train line is planned, properties nearby might see a price hike. In contrast, areas without such developments might not experience the same growth. Understanding these dynamics can help you make informed decisions when buying property in Austria.
Sources: Global Property Guide, Engel & Völkers, European Commission, Aparthotel
2) Focus on long-term investments in Austria, as the property market is stable but slow-growing
Austria's property market is stable but slow-growing, making it ideal for long-term investments.
This stability comes from Austria's strong economic fundamentals and solid legal protections for property owners. These factors help keep the market steady, even when other European markets might experience more volatility. If you're considering buying property here, think of it as a marathon, not a sprint.
In recent years, particularly in 2023 and 2024, house prices in Austria have shown steady but modest growth. For instance, in Vienna, the yearly change in house prices was around -1.99% to -2.43%. This slow growth means the market isn't prone to the rapid price increases seen in other countries, making it less suitable for quick flips.
Government statistics highlight a preference for long-term ownership in Austria. The steady transaction volumes and lack of speculative buying and selling activity suggest that the market aligns more with long-term investment strategies. This focus is on stable returns over time rather than quick profits.
For those looking to invest, it's worth noting that Austria's property market is more about consistency and reliability than making a quick buck. The market's slow and steady nature is a reflection of the country's overall economic stability.
Sources: CEIC Data, OeNB Property Market Review, Airbtics
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Austria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Focus on residential or commercial properties in Austria, as foreigners need special permission to buy agricultural land
In Austria, foreigners can't easily buy agricultural land due to strict laws.
These laws are in place to keep land under local control and protect national interests. If you're thinking about investing in Austria, it's important to know that getting permission to buy agricultural land is tough. The process is complicated and can be denied if it goes against public policy.
Because of these hurdles, many foreign investors are turning their attention to residential and commercial properties. These types of properties are much easier to purchase and don't come with the same level of restrictions. This shift is not unique to Austria; it's a common trend in countries with similar regulations.
Investing in residential or commercial real estate in Austria can be a smart move. These markets are more accessible and offer a range of opportunities. Whether you're looking for a cozy apartment in Vienna or a bustling commercial space, the options are plentiful and the process is more straightforward.
So, if you're considering a property investment in Austria, focus on the residential or commercial sectors. These areas provide a smoother path for foreign investors and can be a rewarding venture.
Sources: Law Library of Congress
4) Consider short-term rental properties in Salzburg and Tyrol, as tourism drives property prices and profitability in these regions
Tourism is a major factor driving property prices in Salzburg and Tyrol, making short-term rentals a lucrative investment.
In Salzburg, Airbnb hosts enjoy a 78% median occupancy rate, reflecting the strong demand from tourists. This high rate shows just how popular these rentals are among visitors.
The 2023/24 winter season was a hit in Austria, with Tyrol and Salzburg making up 58.5% of all overnight stays. This surge in tourism boosts the demand for short-term rentals even more.
For those considering investing in Salzburg, the numbers are promising. A typical Airbnb listing here brings in an average annual revenue of €33,000, with guests paying around €122 per night.
These figures highlight the profitability of short-term rentals in Salzburg, driven by the steady influx of tourists eager to explore the region.
With tourism continuing to thrive, investors can expect strong returns from properties in these popular Austrian regions.
Sources: Snow Industry News, Airbtics
5) Consider Vienna’s outer districts for investment, as urban expansion and better infrastructure are driving up property prices
Investing in Vienna's outer districts is a smart move because property prices are rising there.
In 2023 and 2024, real estate costs in these areas were much lower than in the city center. For example, while the starting price per square meter in the central city was EUR 14,000, it was only EUR 5,000 in Favoriten and EUR 6,000 in the 21st, 22nd, and 23rd districts.
These outer districts are seeing above-average growth in property prices. This is due to increased demand for housing, as these areas are expected to experience significant population growth over the next 20 years. For instance, Favoriten is projected to grow by 20.5%, and Floridsdorf by 16.9%, naturally leading to higher demand and rising property prices.
The government is also investing in urban expansion and infrastructure in these districts. Projects like Aspern Seestadt, one of Europe's largest urban expansion projects, are boosting the appeal of these areas. This project alone is set to accommodate over 11,000 homes and 20,000 workplaces, with improved transport links and smart city initiatives.
These developments make the outer districts more attractive to both residents and investors. The combination of urban expansion and infrastructure improvements is a key factor driving the increase in property values.
Sources: Luxury Vienna, The B1M, City of Vienna
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6) Build a strong relationship with a reputable "Makler" in Austria for valuable market insights, as locals often use real estate agents for transactions
In Austria, real estate agents, or "Makler," are key players in property transactions.
With a market size of €16.8 billion in 2024, the real estate industry in Austria is booming, involving 13,930 businesses. This shows how much people rely on agents for buying and selling properties. Locals often use "Makler" for transactions, so building a good relationship with a reputable agent can provide valuable market insights.
Trust in these agents is generally high among Austrian buyers. Many reputable agents are part of professional organizations and follow strict ethical standards, which boosts confidence in their services. You'll often hear success stories from satisfied clients who have benefited from the expertise and personal advice of these agents.
The Austrian property market can be tricky, with rising construction and energy costs, high inflation, and new interest rate levels all playing a part. Real estate agents are crucial in navigating these challenges, ensuring transactions are smooth and secure. They have in-depth knowledge of local markets, including specific neighborhoods and market trends, which is hard to find on your own.
Agents also understand the legal nuances of buying property in Austria, offering insights that can save you time and money. Their insider knowledge is invaluable, especially when dealing with complex market conditions. This makes them an essential part of the buying process.
So, if you're considering buying property in Austria, partnering with a trusted "Makler" can make all the difference. They not only help you find the right property but also guide you through the entire process, making it less stressful and more efficient.
Sources: Austria Real GmbH, European Real Estate, IBISWorld
7) Consider investing in co-living spaces in urban areas, as they are gaining popularity and can offer higher rental yields
In Austria, urban areas are buzzing with growth, and the population is on the rise.
With more people flocking to cities, there's a big push for affordable housing solutions. Co-living spaces are stepping up as a trendy option, especially for millennials and young professionals who crave a modern, community vibe. These spaces aren't just about living; they're about creating a lifestyle that feels flexible and connected.
What's catching investors' eyes is the higher occupancy rates in co-living setups compared to traditional rentals. This means more people are choosing co-living, which can lead to higher rental yields. It's a win-win for both residents and investors.
Investors are particularly interested because co-living properties can offer yield premiums of 20 to 30% over traditional rentals. This makes them a hot ticket in the real estate market. The buzz around co-living is growing, with new startups jumping in and expanding the market.
As the co-living trend gains momentum, it's clear there's a strong demand. The industry is not just growing; it's evolving, with more companies entering the scene and offering fresh, innovative solutions.
Sources: Colivi, REWBCon, Property Forum
8) Factor in the real estate agent's commission in Austria, as buyers usually pay this fee
In Austria, buyers usually pay the real estate agent's commission, which might surprise some folks.
Back in 2023, the Austrian Brokers Act introduced the "buyer's principle," meaning whoever hires the broker first pays the commission. So, if a landlord hires the broker, they foot the bill, not the tenant.
Despite this, real estate agents in Austria confirm that buyers typically cover the commission. This practice is now part of the law, ensuring buyers are aware of these costs.
Financial advice articles stress the importance of including commission costs in your budget when purchasing property in Austria. It's a crucial part of planning your finances.
When you're looking to buy, remember that this commission is a standard expense in the Austrian property market. It's something to keep in mind as you calculate your total costs.
Sources: Haslinger / Nagele Rechtsanwälte GmbH
We have made this infographic to give you a quick and clear snapshot of the property market in Austria. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Ensure all terms are clear before signing Austria’s legally binding “Anbot” preliminary purchase agreement
In Austria, the "Kaufanbot" is a legally binding preliminary purchase agreement, so make sure you understand all the terms before signing.
Once you sign the Kaufanbot, you're locked into the deal, and any changes can lead to legal headaches. Real estate agents in Austria often stress the importance of fully grasping the Kaufanbot to avoid disputes. It's not just a formality; it's a commitment.
Legal experts, like those on the Wise blog, highlight the Kaufanbot's binding nature. They advise potential buyers to be cautious and informed. The Austrian Constitutional Court's 2023 decision further emphasizes the strict adherence to these agreements, showing how seriously they're taken.
In Austria, the real estate market is unique, and understanding local practices is key. For instance, the Kaufanbot is more than just a preliminary step; it's a crucial part of the buying process. Skipping the fine print can lead to unexpected consequences.
Many buyers are surprised by how binding the Kaufanbot is. It's not like in some other countries where preliminary agreements are more flexible. In Austria, once you sign, you're committed, so it's essential to be thorough and informed.
Before diving into the Austrian property market, take the time to understand the Kaufanbot. It's a small step that can save you from big problems later. Remember, knowledge is your best tool when navigating these waters.
Sources: Wise Blog, Climate Case Chart, Geuer Real Estate
10) Avoid properties with "Altlasten" in Austria, as cleanup costs can be high and impact profitability
When buying property in Austria, be wary of contaminated sites, known as "Altlasten", due to potential high cleanup costs.
Back in the 1980s, Austria faced several high-profile contamination cases that highlighted the need for strict environmental measures. This led to the introduction of the Contaminated Sites Remediation Act in 1989, which provides a framework for financial support and systematic evaluation of these sites. The act emphasizes the importance of significant cleanup efforts, which can be quite costly.
Even though Austria boasts high recycling rates, not all waste is recyclable, and treating contaminated materials in an environmentally friendly way can be expensive. This is something to keep in mind when considering properties with potential contamination issues.
Contaminated sites can also impact property prices in Austria. These sites often lower property values, which can affect land transfer taxes and overall profitability. Legal disputes over contaminated property sales have shown that financial losses can be significant, making thorough due diligence essential.
When purchasing property, it's crucial to conduct a detailed investigation to avoid unexpected costs. The presence of contamination can lead to substantial financial burdens if not properly addressed beforehand.
In summary, while Austria offers many attractive real estate opportunities, potential buyers should be aware of the risks associated with contaminated sites. The financial implications of cleanup and legal disputes can be considerable, so it's wise to proceed with caution.
Sources: Contaminated Sites Remediation Act (1989), Property Prices, Expert Analyses and Remediation Costs
11) Understand Austria’s “Grunderwerbsteuer” (property transfer tax) to better assess your total investment cost
When buying property in Austria, understanding the "Grunderwerbsteuer" (property transfer tax) is essential.
This tax is a key part of your purchase costs, with a standard rate of 3.5% of the property's price. So, if you're eyeing a €500,000 home, expect to pay €17,500 just for this tax. It's a hefty sum that can influence your buying decisions, especially if your budget is tight.
Interestingly, Austria's rate is lower than some neighbors, like Germany, where it can hit up to 6.5%. Yet, it's crucial to include this tax in your financial planning. Real estate experts often emphasize the need to account for the "Grunderwerbsteuer" early on to prevent any budget shocks.
In Austria, the property market is competitive, and understanding these costs can give you an edge. Many buyers overlook the impact of this tax, but being informed means you can make smarter choices. It's not just about the purchase price; it's about the total investment.
Local real estate advisors can offer insights into how this tax fits into the broader market trends. They often suggest that knowing these details can help you negotiate better deals or find properties that offer more value for your money.
So, as you explore the Austrian property market, keep the "Grunderwerbsteuer" in mind. It’s a small detail that can make a big difference in your investment strategy.
Sources: Bundesministerium für Finanzen, ifo Institute, Grant Thornton International
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Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Check Austria’s strict zoning laws to ensure the property suits your intended use before purchasing
When buying property in Austria, be aware that strict zoning laws can affect your plans.
In 2023, it was noted that 45% of Austria's land is either protected or designated for agriculture. This means a lot of land comes with specific rules that might limit your options. For instance, if you're eyeing a picturesque spot in the countryside, you might find it's part of a protected area where building is restricted.
Vienna, in particular, has detailed regulations on building heights and styles. The Vienna Building Code ensures new constructions blend with the city's historic charm. So, if you're planning to build in Vienna, expect to follow these guidelines closely. A 2023 case highlighted a buyer who faced legal troubles for not checking zoning laws, which turned into a costly mistake.
However, zoning laws aren't the same everywhere in Austria. While Vienna is known for its strictness, regions like Burgenland might offer more flexibility. This means you could have more freedom in how you use your property there. But remember, regional differences require you to do thorough research before making a purchase.
It's crucial to understand these zoning laws because they can vary significantly. In some areas, you might find that what you can do with your property is quite limited, while in others, you might have more leeway. This variation is why it's essential to check the zoning status of any property you're interested in.
So, whether you're looking at a city apartment or a rural retreat, always verify the zoning laws. This step can save you from potential legal headaches and ensure your property plans align with local regulations.
Sources: Austrian Federal Ministry of Agriculture, Regions, and Tourism, Vienna City Council, Austrian Chamber of Commerce, Regional Variations in Zoning Laws
13) Avoid areas with high "Zweitwohnsitz" restrictions, as they can limit rental opportunities
When buying a property, think about how you might use it in the future.
In some places, like Austria, high "Zweitwohnsitz" restrictions can be a real headache. These rules can limit how often you rent out your property, which is a big deal if you're counting on rental income. For instance, local governments in certain Austrian regions have strict rules that cap short-term rentals. This means you might only rent out your place for a limited number of nights each year.
Imagine you're banking on short-term rentals to make some cash. These restrictions could seriously cut into your earnings. Even though tourism was booming in 2023, areas with these rules had fewer properties available for short-term rentals, according to Statistics Austria. So, if you're eyeing rental income, these areas might not be your best bet.
Investors often steer clear of these restricted areas. Surveys show they prefer places with fewer rules because flexible areas attract more tourists, leading to better earnings. Real estate agents also suggest avoiding areas with strict regulations to hit your rental income goals.
In the end, if you're looking to maximize rental income, choose areas with fewer restrictions. This way, you can attract more tourists and boost your earnings. It's all about finding the right spot where the rules won't hold you back.
Sources: ETIAS, Domus Global, Airbnb Tax Guide 2024
14) Be prepared for long-term tenant commitments in Austria due to strong tenant protection laws if buying to rent
Austria is famous for its strong tenant protection laws.
In 2023, a big change came with the Maklergesetz amendment, which means that now the estate agent's fee is paid by the party hiring the agent, not the tenant. This is called the Bestellerprinzip, and it ensures tenants only pay commission fees if they hire the agent themselves.
Looking ahead, the Renters (Reform) Bill 2024 is set to make eviction rules even stricter. For instance, landlords must now give a four-week notice period for rent arrears evictions, and tenants can only be evicted if they owe two months' rent at the time of notice. This gives tenants a fair chance to catch up on payments and stay in their homes.
In Vienna, groups like the Mieter*innen-Initiative are very active in supporting tenant rights. They help tenants understand housing laws and fight for their rights, showing how strong the advocacy for tenant rights is in Austria.
All these factors create a solid tenant protection framework, so if you're thinking of buying property to rent out, be ready for long-term tenant commitments. It's not just about owning a property; it's about understanding the responsibilities that come with it.
Austria's tenant laws are designed to ensure stability and fairness, making it a unique place for landlords. The focus is on providing security for tenants, which is something to keep in mind if you're entering the rental market here.
Sources: British in Austria, Letting a Property, Mieter*innen-Initiative
We made this infographic to show you how property prices in Austria compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Be aware of Austria’s “Mietzins” system, as rent control can limit rental income in some areas
In 2023 and 2024, Austria's rental market saw a significant rise in costs, with the Rent Price Index hitting a record high.
While these rising costs might catch your attention, you might not realize that Austria has a "Mietzins" (rent control) system in place, which can limit rental income in certain areas. The Austrian Ministry of Justice sets recommended rental rates, known as Richtwertmiete, acting as a benchmark for rent prices. This system, updated in 2022 and 2023, plays a crucial role in regulating rental income, yet its impact might not be immediately apparent to those unfamiliar with the local market.
In Vienna, the housing market is notably affected by the Mietzins system, leading to housing scarcity and complex negotiations for affordable housing. This scarcity can obscure the understanding of how rent control limits rental income in certain areas.
Austria's rent control systems, including adequate rent, category rent, and standard value rent, impose limitations based on various factors. These systems are designed to prevent excessive rent increases, but their nuanced application might not be obvious to those outside the Austrian housing market.
For potential property buyers, understanding these systems is key. The Mietzins system, for instance, can significantly impact your rental income if you're considering investing in Austrian real estate. It's not just about the rising costs; it's about how these controls shape the market.
So, if you're eyeing a property in Austria, remember that local regulations can affect your investment more than you might expect. It's a unique market with its own set of rules that can be both a challenge and an opportunity.
Sources: Vigo Immobilien, CEIC Data, Austriaca, IUT, Trading Economics
16) Avoid properties with unresolved “Baurecht” issues, as they can complicate ownership and future sales
When buying a property, watch out for unresolved "Baurecht" issues.
These building rights can make owning and selling a property tricky. In recent years, especially in 2023 and 2024, many properties got tangled in legal battles over these rights. Take Linz, for example, where a case dragged on in court, showing just how complex these issues can be.
Properties with these unresolved issues often see lower resale values. Buyers tend to shy away from such complications, making these properties less appealing. Real estate lawyers point out that "Baurecht" agreements can last anywhere from 10 to 100 years, which makes it tough to figure out the property's market value over time.
Another headache is that these issues can delay property sales. If there's a dispute over building rights, the sale might be on hold until everything is sorted out, leading to long waits and extra costs. This is a big downside for owners eager to sell.
In some regions, unresolved "Baurecht" issues are more common, so it's wise to do your homework. Consulting with a local real estate expert can help you navigate these waters and avoid potential pitfalls.
Remember, properties with clear building rights are generally more attractive to buyers and can save you a lot of hassle in the long run. So, it's worth investing time to ensure everything is in order before making a purchase.
Sources: Eur-Lex, Cerha Hempel, Kunz Wallentin
17) Act quickly on desirable properties in Austria, as they follow a "first come, first served" policy for offers
You might find it surprising that Austria has a "first come, first served" policy for property offers, so act quickly if you find a desirable property.
In bustling cities like Vienna and Innsbruck, the demand for properties is sky-high, but the supply just can't keep up. This creates a competitive atmosphere where properties are snapped up almost as soon as they hit the market. If you’re eyeing a property, be ready to move fast because the competition is fierce.
Real estate agents in Vienna have noticed that properties are selling at lightning speed. The reason? New housing developments are lagging behind the demand, and this trend is likely to continue for a while. So, even without a formal "first come, first served" rule, the market's fast pace makes quick action a must.
In Innsbruck, the situation is similar. The city is a magnet for buyers, and the limited availability of properties fuels the urgency. If you’re considering buying here, it’s crucial to stay ahead of the game and be prepared to make swift decisions.
Interestingly, this dynamic is not common in other European countries, where property markets often have more structured processes. But in Austria, the unique market conditions dictate a different approach. It’s all about being the first to act when a property catches your eye.
So, if you're thinking about investing in Austrian real estate, remember that timing is everything. The market waits for no one, and being proactive is your best strategy.
Sources: Global Property Guide, Engel & Völkers, Amazing Austria Property
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18) Invest in energy-efficient properties in Austria to benefit from subsidies and incentives that boost property value
Investing in energy-efficient properties in Austria is a smart move right now.
In recent years, there's been a noticeable uptick in demand for these properties, driven by sustainability trends and the rise of remote work. Cities like Vienna and Graz are seeing a surge in interest for tech-smart, energy-efficient apartments. This shift is not just about being eco-friendly; it's about future-proofing your investment.
The Austrian government is making it easier for you to go green. They've launched the "Away from Oil and Gas" campaign, which started in 2023, and it's a game-changer. With €2,445 million allocated, this initiative covers about 75% of the costs for switching to renewable heating systems. It's a financially attractive option that can significantly boost your property's value.
Another key player is the UFI (Umweltförderungsgesetz) program, which has been a major source of funding for eco-friendly projects. Back in 2021, it provided €274 million for 33,675 projects, leading to big energy savings and CO2 reductions. These efforts not only support environmental goals but also make properties with low carbon footprints more appealing to buyers.
Austria's commitment to green living is evident, and it's paying off. Properties that align with these eco-friendly initiatives are becoming increasingly popular. Buyers are looking for homes that not only meet their needs but also contribute to a sustainable future.
So, if you're considering buying property in Austria, think about the long-term benefits of investing in energy-efficient homes. The government's support and the growing demand for sustainable living make it a wise choice.
Source: BMK.gv.at
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.