Purchasing Real Estate in Austria by Foreigners: Procedure for Obtaining a Permit

Austria has been one of the most attractive countries in Europe for real estate investment for many years. Its stable economy, high standard of living, and advantageous geographical location make residential and commercial properties desirable not only for local residents but also for foreigners. However, the process of purchasing real estate in Austria differs from other EU countries, as specific rules apply to citizens of third countries (i.e., those who do not hold an EU or EEA passport), established under the Grundverkehrsgesetz – the laws regulating real estate transactions.

In a previous article, we briefly mentioned the procedure for obtaining a permit to purchase real estate. In this article, we will examine in detail how this process takes place, which documents are required, and provide practical examples to help understand the specifics of the Austrian system.

Legal Framework: Grundverkehrsgesetz

The key regulatory act governing the purchase of real estate by foreigners in Austria is the Grundverkehrsgesetz. This is not a single federal law but rather a set of regional laws, as each federal state of Austria has its specific rules. For example, in Vienna, the Wiener Ausländergrunderwerbsgesetz applies.

In regions such as Tyrol and Salzburg, very strict restrictions exist, particularly regarding the purchase of land plots, whereas the rules in Vienna are more flexible, making the capital more attractive to foreign investors.

The main principle of the law is that the purchase of real estate by foreigners is possible only with a special permit from the competent regional authority (Grundverkehrsbehörde). Without this permit, any transaction is considered invalid.

Who is considered a foreigner under the law?

1. Citizens of the EU and EEA
   Citizens of EU and EEA countries are equated to Austrian citizens and do not require additional permits. From the perspective of real estate purchase laws, they are not considered foreigners. Therefore, citizens of Germany, Romania, or Bulgaria, for example, can purchase an apartment in Austria without special procedures or approvals.
2. Citizens of third countries
   Citizens of third countries (e.g., Ukraine, the USA, Canada, Turkey, China) are considered “foreigners” and are therefore required to obtain a permit to purchase real estate.

Procedure for obtaining a permit

The procedure may differ depending on the federal state, but the general steps are as follows:

1. Signing the purchase agreement
   • The agreement is formalized by a notary.
   • The agreement specifies that it comes into effect only after the permit is granted.
2. Submitting an application to the Grundverkehrsbehörde
3. The application is usually submitted by the buyer’s notary or lawyer.
4. The application includes:
   • a copy of the buyer’s passport;
   • proof of residence (Meldezettel);
   • documents confirming the purpose of the purchase (exclusively for personal residence – this is crucial!);
   • a copy of the purchase agreement;
   • a certificate of no criminal record;confirmation of financial capacity;
   • additional documents if required.
5. Review of the applicatio
   • The review process can take from 3 to 9 months.
   • In certain cases, the authority may request additional documents, such as a business plan or justification for the necessity of purchasing the property.
6. Obtaining the permit and registering the transaction. Only after obtaining the permit is the agreement registered in the Land Register (Grundbuch).

Practical examples

• Example 1: Vienna
  A Ukrainian entrepreneur purchased an apartment in central Vienna for his family. Due to having a permanent residence permit in Austria for all family members, as well as the family’s connection to Vienna (adults employed in an Austrian company, children attending Austrian schools), the permit was obtained relatively quickly – approximately 12 weeks.
• Example 2: Tyrol
  A Canadian citizen wanted to purchase a vacation home. In Tyrol, strict rules apply: foreigners are prohibited from purchasing vacation homes (Freizeitwohnsitz). As a result, the buyer was denied, as the purchase violated local restrictions.
• Example 3: Carinthia
  A US citizen planned to purchase property for investment, i.e., to generate income from renting the apartment. The magistrate denied the permit because it contradicted the principle of “social need,” which means foreigners can purchase property only for personal residence and not for commercial purposes.

Important nuances

• Having a residence permit in Austria is a mandatory prerequisite for submitting documents for a permit to purchase property. Austria differs fundamentally from many other European countries where one can purchase real estate above a certain value (e.g., €500,000 and above) and obtain a residence permit (so-called Golden Visa). This is possible in Portugal, Spain, Greece, Malta, and Croatia, but not in Austria.
• Regulations depend on the federal state: In Salzburg and Tyrol, the purchase of land plots is strictly controlled to prevent speculation in the tourist market. In Vienna, authorities ensure that the property is genuinely for personal residence and not for further rental purposes.
• Without a permit, the transaction is invalid: Registration in the Grundbuch is impossible without obtaining the permit first.
• Possibility of refusal: Authorities may deny the permit if the property purchase is not intended to meet private residential needs or poses a risk of speculation.

Features of purchasing residential real estate in Vienna

Vienna has always attracted investors from around the world. To prevent speculation in the real estate market, and considering that demand for apartments in Vienna has traditionally exceeded supply, Magistrate 35 (the responsible city authority) has always scrutinized documents carefully and was often reluctant to grant permits for purchases.

Magistrate 35 usually checks:

1. Presence of “social need” for the purchase
   The potential buyer must demonstrate why they need to purchase the property rather than rent. Key arguments include having a temporary or permanent residence permit (permanent is preferable) and strong social ties to Vienna.
2. Presence of a “financial connection” to Vienna
   The authority needs to ensure that the person pays taxes, or at least part of them, in Vienna. Important arguments include employment in an Austrian company or establishing a business in Austria. Ideally, the person is already employed or owns a registered company at the time of application.

To confirm this, Magistrate 35 may request:

• proof of residence in Vienna for a certain period (Meldezettel);
• contacts with acquaintances, friends, or partners who are Austrian citizens and with whom the buyer has been in contact;
• children’s attendance at a Viennese kindergarten, school, or university;confirmation of German language proficiency by the buyer or family members, or evidence of participation in courses or private tutoring;
• other proofs of social integration in Vienna.

Example: A Ukrainian citizen, who neither had official employment nor a business in Austria, obtained a permit because he provided Magistrate 35 with evidence of future intentions to open a company. He also presented letters from Austrian partners and a clear business plan for the future company.

It is worth noting that before the war, it was very difficult for Ukrainian citizens to obtain a permit to purchase property. In most cases, the Vienna Magistrate refused, reasoning that the person could live in a rented property. Since the beginning of the war, Austrian authorities have become more lenient toward Ukrainians, making it fully possible to obtain such a permit with the necessary documents.