Which transactions are subject to real estate transfer tax?
The paid or unpaid acquisition of real estate in Austria is subject to real estate transfer tax. The legally valid conclusion of an act creating an obligation (sales contract, exchange contract etc.) is decisive in establishing liability for real estate transfer tax, the fulfilment of the transaction (registration of ownership rights in the land register) is irrelevant.
These rules also apply to all citizens and entrepreneurs from EU Member States in Austria.
The following facts are listed in the Real Estate Transfer Tax Act:
- Transfer of ownership of real estate
- Through purchase agreements (written and oral) or other legal transactions that establish the claim to transfer of ownership of a property (e.g. exchange agreements, divorce settlements, gifts)
- Acquisition of ownership of real estate without a preceding obligatory transaction (e.g. legal succession, last will and testament, inheritance, bid in compulsory auction proceedings)
- Assignment of the Right of Transfer and Transfer of the Right to Realize the Property
- Assignment of the claim to transfer of ownership, whereby a claim to transfer of ownership or a right from a purchase offer is further transferred; the assignment of the claim to transfer of ownership in a contractual chain also gives rise to the obligation to pay real estate transfer tax
Seller A enters into a sales contract with Buyer B for real estate. This legal process is subject to real estate transfer tax. Even before ownership has been registered to B in the land register, he in turn sells the real estate to C. Although there has been no transfer of ownership between A and B, and ownership has been transferred directly to C through entry in the land register, the sales contract between B and C is also subject to real estate transfer tax.
- Purchasing exploitation rights, including legal transactions, which enable someone to legally or commercially use Austrian real estate for his own account without purchasing the right of ownership (e.g. trust agreements)
Seller A sells his property to B. B does not however buy the property for himself, but on trust for C. Thus B legally acquires the right of ownership from A. As a result of the fiduciary relationship between B and C, C acquires economic power over the real estate. Both the legal acquisition of the right of ownership by B and the acquisition of economic power by C are subject to real estate transfer tax. Real estate transfer tax is thus payable twice over.
Transfer of shares in companies owning real property
- Change of shareholders, if at least 95 per cent of shares in a business partnership whose assets include real estate are transferred to a new shareholder within five years
- Consolidation of shares, if the assets of a business partnership or capital company include real estate and 95 per cent of shares in the partnership or company are held by one shareholder or one company group
- Legal transactions which give rise to the right to transfer at least 95 per cent of all shares in a business partnership or capital company
What is classed as real estate under the Real Estate Transfer Tax Act?
The Real Estate Transfer Tax Act understands real estate to be, first and foremost, real estate within the meaning of civil law, together with fittings. That is:
- the flora and fauna (plants, animals) and fittings (e.g. business facility).
The following are also categorised as real estate:
- The right to build (meaning the right to erect a building on third-party land) and
- buildings on third-party land
The following are not categorised as real estate:
- Machines and other apparatus of all kinds which belong to an operating installation
- Operating installations (e.g. baking ovens, tanks, boilers) are indeed fittings, but are excluded from real estate transfer tax.
Fixtures are movable objects (e.g. furnishings) which are not attached to the building or which can be removed from the building without destruction and in an economically viable manner. The portion of the consideration provided for the fixtures taken over is not included in the tax base.
Responsible for the content: Federal Ministry of Finance