The acquisition of domestic real property by natural and legal persons is basically subject to the Austrian tax on real property purchases (Austrian Real Property Acquisition Tax Act). Liability for the tax is created at the time of the legally enforceable formation of the binding transaction (for example, the contract of purchase); and is not dependent on the actual transfer of the right to the property (disposition: as a rule, entry into the land register)
Generally, the Austrian tax on real property purchases applies to:
- Purchase contracts and other legal transactions which form the basis for a claim on a conveyance
- Purchase of property if it has not been preceded by a binding transaction (for example, purchase in a judicial sale)
- Assignment contracts through which the claim on a conveyance based on contract or tort is transferred on
- Purchase of the right to representation: Joinder of all shares in a corporation with real properties held in one hand (so called joinder of shares).
The Austrian tax on real estate purchases is determined from the value of the consideration (which as a rule is the purchase price) and, where there is no consideration or its value cannot be ascertained, from the value of the real property (as a rule three times the unit value or the common value if the former is too low) and as a matter of principle amounts to 3.5% of the assessment basis. The preferential tax rate of 2% applies between individuals who are related through kinship, marriage, affinity, or acceptance on behalf of a child who is closely related to the individual.
Details regarding Tax Liabilities when Purchasing Real Property