The following information will give you a general overview about purchasing a poperty.

Making a Proposal

After having seen and walked through the property one or more times, the agent will ask the prospective buyer to submit a written offer.

When signing a bid, the client must be aware that he is making a binding offer to purchase the property in question at a certain price.

The prospective buyer has to be aware that by submitting an offer, only the prospective buyer but not the seller is committed to the offer. The seller may continue to show the property to other potential buyers to receive additional offers and finally select the most attractive offer. In this case, an offer merely binds the prospective buyer, not the seller.

The offer, however, is not perpetual. Except as otherwise stated in the offer, an offer typically expires after a reasonable time period (two weeks). During this period the prospective buyer is committed to his offer.

If the seller accepts the offer within reasonable period, the parties have entered into a formal agreement. Drafting the purchase agreement will be only a formality.

From this point on the seller cannot back out of the contract, for example if another prospective buyer makes a better offer. After the offer has been accepted, both parties will have a lawyer or notary to set up the contract and settle the transaction.

The Purchase Agreement

The payment has to be made after the purchase agreement including payment terms, has been fully executed and notarized and purchase price funds have been secured (mortgage approval by bank).

The attorney or notary typically will assume the role of a trustee: He will hold the payment in escrow and transfer funds to the seller after title transfer in the land register or if the seller submits a "Rangordnungsbescheid" (which guarantees such title transfer in the land register).

A trusteeship should ensure the seller that he transfers his right to the property after having received the purchasing price. On the contrary the buyer should be assured that the seller only receives the purchasing price after the buyer has been entered into the land register.

Purchase by a foreigner

  • individuals holding a non-Austrian citizenship
  • legal entities and partnerships whose principal place of business or headquarters (according to the by-laws of such entity) is outside of Austria.
  • legal entities and partnerships whose principal place of business (according to the by-laws of such entity) is in Austria but non-Austrian majority ownership.
  • associations whose principal place of business (according to the by-laws of such association) is in Austria but the majority of voting members or the management board are non-Austrian [foreign]
  • foundations, trust or similar legal entities benefiting mostly (according to the by-laws of such entity) non-Austrian [foreign] individuals.

Citizens of Non-EU Countries

A citizen of a country not being a member of the European Union (EU) and not party to the European Economic Area treaty (EEA).

A citizen of a Non-EU country who wants to purchase property must file a petition including a statement as to whether the legal transaction will have any economic, social or cultural impact (designated use of the acquired property)

  • Social Interest
    Social interest is primarily evident if the person submitting the petition is buying the property for personal use. This also includes the bestowment of such property to the person submitting the petition, receiving the property in the form of a gift pre-empting the last will of a close relative.
  • Economic Interest
    Economic interest is evident if the acquiring entity is using the property for expansion purposes or if the acquisition ensures continuation of an existing business.
  • Cultural Interest
    Cultural interest is evident if a scientist is relocating to Austria for scientific or academic purposes. This must be approved in writing by the respective institution (ministery, university etc.)
  • Concerned Parties
    Foreigners are non-Austrian citizens. Concerned parties are legal entities whose principal place of business is outside of Austria and legal entities whose principal place of business is in Austria having a majority of non-Austrian ownership (i.e. the majority shareholder is either a foreign individual or a foreign legal entity).

Exceptions

The following applicants will receive confirmation of exception of their legal obligation to request a permit in accordance with the real estate regulations concerning foreign buyers.

  • Individuals and legal entities of an EU member country and Individuals and legal entities of an EEA member country. - These special arrangements are valid for people who are married to someone with European Union or EEA nationality, if the legal transaction is performed together. Consultation with a public official is advised.
  • Favoured by state-contractual obligations (these are persons who are employed by the following institutions:) UNO, CTBTO, ICMPD, UNIDO, OSZE, Joint Vienna Institute, OPEC Fonds, WASSENAAR ARRANGEMENTS, EU Patent-organisation, IAEA. For spouses these special arrangements are not valid. The only exception are people who are employed with the CTBTO.
     
  • Other: Iranian citizens, who are not employed; Swiss citizens and legal entities

Filing application is not necessary

  • When married couples purchase together and one of the spouses is in possession of an Austrian citizinship
  • For legal transactions of inheritance (acquisition of property due to a will or a Certificate of inheritance)
  • For real estate properties outside of Vienna the "Grundverkehrsgesetz" (Real Property Transactions Act) of the respective province is valid.

Expenses upon Purchase

When purchasing property there will be numerous additional expenses which usually are debited to the buyer. The basis for additional expenses forms the purchase price of the property.

The following additional expenses are to be considered:

  • 3,5% Property transfer tax
  • 1,1% Registration fee (land register)
  • between 1% and 3% excl. VAT to the notary or lawyer for drafting purchase agreement
  • Authentication fees and cash expenditures to the notary
  • 3% Broker's Commission fee excl. 20 % VAT
  • 1,2% Pledge registration fee