Buying an apartment at the construction stage (Kauf vom Plan, Vorverkauf, or in English off-plan or pre-sale) in Vienna and other cities of Austria is a fairly common practice, especially among investors and people who aim to acquire modern housing at a favorable price. This method of purchase allows not only to save on the cost per square meter but also to influence the layout and choose the optimal floor, view from the window, or interior finishing of the apartment. At the same time, it carries certain risks related to finances, construction deadlines, and legal aspects.
Previously, we wrote about how investors in new buildings are protected in Austria, but in this article, we will examine the practical nuances of buying “off-plan,” contract standards, tax and legal aspects, as well as provide specific advice on how to minimize risks.
Share of Apartment Sales at the Construction Stage in Vienna and Austria
Every year, thousands of new apartments are commissioned in Austria. Vienna holds a significant market share because the city is constantly expanding and actively under construction. Unfortunately, there is no official statistic that clearly shows the share of apartments sold at the construction stage. However, analytical reports from developers and real estate companies such as EHL and BUWOG show that a significant portion of new apartments in Vienna is sold through pre-sales.
This is especially true for the Vorsorgewohnung segment, i.e., investment apartments sold for the purpose of rental. Here, demand exceeds supply, and many projects are almost completely sold even before the completion of construction.
For example, the company VigoImmobilien currently has the Park Flats project in its portfolio, part of which is sold specifically for investment purposes at a reduced price.
Advantages of Buying an Apartment at the Construction Stage
1. Savings on Price
One of the main advantages of buying “off-plan” is the lower price of the apartment compared to completed properties. Developers often offer discounts at early stages of sales, which can range from 5 to 15% of the final market value of the apartment. In Vienna, where housing prices steadily rise, such savings can be significant.
2. Ability to Influence Layout and Finishing
The buyer obtains the right to choose the layout, finishing materials, room arrangement, as well as kitchen and bathroom options. This is especially important for those planning to use the apartment as an investment object, since modern layouts and high-quality finishing increase its attractiveness for tenants.
3. Modern Construction Standards
New buildings in Vienna are constructed according to high energy efficiency standards, with modern heating, ventilation, and security systems. This allows saving on utility costs and increases the comfort of living or renting.
4. Potential for Value Growth
If construction takes place in a promising area, the price of the apartment can increase significantly by the time the property is commissioned. This makes such a purchase attractive both for personal use and for investment purposes.
Risks of Buying at the Construction Stage
1. Delay or Suspension of Construction
One of the main risks is delays in construction or even a complete project halt. This situation can occur due to the financial problems of the developer, changes in market conditions, or technical difficulties. Therefore, before purchasing, it is important to check the financial stability of the developer and the conditions of guarantees for the funds paid.
In Vienna and Austria, in recent years, there has been an increase in the number of frozen or unfinished construction projects. This phenomenon is the result of several factors, including economic difficulties, changes in financing, and decreased demand for new housing. According to data, in 2024, about 4,700 new residential units were completed in Austria, which is a significant decrease compared to 2023, when this figure was approximately 7,600 units.
For example, in Vienna, the company Colindo Immobilien GmbH declared bankruptcy due to financial difficulties, including rising financing costs and a decline in market demand. The company’s debt amounted to approximately €22.8 million, which significantly exceeded its assets. This led to the freezing of several construction projects in the city center.
2. Legal Risks
Buying an “off-plan” apartment requires careful verification of legal documents: the existence of a construction permit (Baugenehmigung), registration of the developer, and absence of encumbrances on the land plot. It is also necessary to ensure that payment and ownership transfer conditions comply with Austrian law.
3. Risk of Object Not Meeting Expectations
Sometimes the final construction result may differ from marketing materials: changes in layout, quality of finishing or materials may not meet the promises. Therefore, it is important to include in the contract a mechanism for agreeing on changes and compensating the buyer.
Standard Conditions of the Purchase Agreement for Apartments at the Construction Stage (“off-plan”)
If you decide to buy an apartment at the construction stage, we recommend checking whether the following points are included in the contract (or in the preliminary contract — Kaufanbot / Kaufvertrag):
1. Description of the Object and Specifications (Project Accuracy)
- Exact name of the apartment (address, floor, area according to plan), finishing specifications, materials, technical equipment; reference to graphical plans and renders; mechanism for making changes to the plan.
2. Deadlines (Implementation Schedule) and Penalties for Delay
- Clear deadlines: start of work, expected completion/transfer date; penalties or compensation for the buyer in case of missed deadlines; force majeure conditions.
Note: To protect the buyer, the contract usually specifies concrete penalties and compensation mechanisms in case of missed deadlines, in particular:
- Fixed penalty per day of delay
- For example: for each day of delay beyond the agreed transfer date, the developer must pay €50compensation to the buyer.
- The maximum penalty for delay can be limited, for example, 3% of the apartment price.
- Compensation of buyer’s expenses
- If the buyer planned relocation or rental, additional expenses (e.g., rent of another property) must be compensated by the developer.
- The contract specifies the mechanism for verifying expenses: receipts, lease agreements, and other documents.
- Percentage price reduction
- In the case of significant delays (e.g., more than six months), the buyer may demand a price reduction of 5–10% or, alternatively, contract termination with refund of paid funds.
Example of contract wording for penalties in case of the developer missing deadlines:
“The developer undertakes to complete construction and transfer the apartment to the buyer no later than 30.06.2026. In case of delay beyond the specified date, the developer shall pay the buyer compensation of €50 for each day of delay, but not exceeding 3% of the total apartment price. Force majeure circumstances that delay construction, including natural disasters, pandemics, military actions, or delays from government authorities, release the developer from liability for delays. In case of delay exceeding six months, the buyer has the right to demand a 5% price reduction or terminate the contract with refund of paid funds.”
3. Payment Stages and Guarantee Mechanism
- Stage payments (stage payments) linked to acts of completed work; distribution of advance/reserve (retention) for defect elimination; recommended use of escrow/trust account or notarial payment control.
4. Transfer of Ownership and Entry in the Land Register (Grundbuch)
- Ownership in Austria is acquired after the entry in the Grundbuch — the contract must clearly describe when and under what conditions the buyer’s rights are submitted for registration. Payments should not automatically mean transfer of ownership before the entry in the register.
5. Warranty Periods and Liability for Defects (Gewährleistung / Haftung)
- Warranty periods for structure and equipment (usually two to three years for minor defects, longer for structural defects), procedure for acceptance and comments upon transfer.
6. Conditions for Refusal / Contract Termination
- Cases when the buyer may refuse (material discrepancy, lack of permits, developer bankruptcy), procedure for refund or alternative compensation. Since in Austria the purchase offer (Kaufanbot) can have legal force upon acceptance, it is important to specify the exit mechanism very thoroughly.
7. Developer Financing Guarantee / Construction Insurance
- Availability of bank guarantee / insurance guarantee for paid amounts in case of developer insolvency; requirement for transparent accounts on construction expenses.
8. Grounds for Changing Technical Specifications — Compensation
- Mechanism for agreeing on project changes, rights to adjust the price or withdraw from the deal in case of significant deviations.
9. Taxes and Additional Costs (Detailing)
- The contract must list the expenses borne by the buyer: registration fee in Grundbuch (~1.1% of the value), real estate transfer tax (usually 3.5% or other rates in specific cases), notary/legal fees, agent commission. These amounts should be discussed separately.
Practical Advice for the Buyer
- Check the developer: verify registration, financial condition, other projects, and reviews.
- Payment schedule: require stage payments through a trust account or notary.
- Contract and guarantees: the contract must clearly describe deadlines, buyer’s rights, and retention of part of the payment.
- Project verification: ensure construction complies with permits and urban planning regulations.
- Budget all expenses: consider taxes, notary fees, and commissions.
- Evaluate location: choose areas with development potential, good transport connections, and infrastructure.
- Legal consultation: involve a lawyer or notary to review the contract.
- Contingency plan: create a backup scenario in case of construction delays or changes in the developer’s financial situation.
Conclusion
Buying an apartment at the construction stage in Vienna or other cities of Austria is a profitable and promising strategy that allows you to save, acquire modern housing, and invest with profit. At the same time, this option requires a careful approach: checking the developer, analyzing the market, having a detailed contract, proper budgeting, and legal support. By weighing all advantages and risks, following practical advice, and observing standard contract conditions, you can make a safe and profitable purchase.
