Mietkaufvertrag in Austria: What It Is, How It Works, and Who It’s For

In Austria, purchasing real estate through the classic model requires significant capital: 20–30% of personal funds, bank financing, and additional expenses for taxes and notarial services. For many, this becomes a barrier to home ownership. However, there is an alternative — the so-called Mietkaufvertrag, or rent-to-own agreement. This model combines long-term rental with the option to purchase the property after a certain period. We have previously discussed the legal aspects of lease agreements in earlier articles.

What is a Mietkaufvertrag?

A Mietkaufvertrag is a hybrid form of contract that combines a traditional lease with the subsequent purchase of real estate under pre-agreed terms. During the rental period, the tenant pays rent, which often includes contributions toward a future purchase. At the end of the term (usually 5–10 years), the tenant can exercise their right to purchase the property — either taking into account previously paid amounts or with a specified discount.

Legal Basis

The Mietkaufvertrag is not regulated as a separate contract type in the ABGB (Allgemeines Bürgerliches Gesetzbuch – Austrian Civil Code); rather, it is based on a combination of the provisions on rental (§ 1090 ff.) and purchase contracts (§ 1053 ff.).

In practice, the Wohnungsgemeinnützigkeitsgesetz (WGG) — the Non-Profit Housing Act — also plays a key role, as many Mietkauf models are implemented through non-profit housing associations, especially in new construction projects.

Types of Mietkauf

Generally, the tenant is not obliged to purchase the property — it is a right, not a duty. However, some contracts may include a purchase obligation. Thus, two main types of Mietkauf are distinguished:

1. Mandatory Mietkauf (verpflichtender Mietkauf): The buyer is obliged to purchase the property after a specified rental period. This is usually stipulated in the main lease agreement (Hauptmietvertrag) plus a purchase agreement with deferred transfer of ownership.
2. Optional Mietkauf (optionaler Mietkauf): The buyer has the right, but not the obligation, to purchase the property. This form requires a clearly defined Kaufoption (purchase option) in the rental contract or a separate agreement.

How Does a Typical Mietkauf Model Work?

1. Initial Contribution (Eigenmittelanteil): At the beginning, the tenant makes an upfront payment (e.g. 10–15% of the property’s value). These funds are either credited toward the future purchase or retained by the developer as a guarantee.
2. Monthly Rent Payments: These include:
   • Standard rental payment,
   • Payment of operating costs (Betriebskosten),
   • Contribution counted toward the purchase price of the property.
3. Purchase Option: After the agreed period, the tenant may exercise the right to buy. The price can be:
   • Fixed (as stated in the contract),
   • Based on market value at the time of purchase (assessed by an independent expert),
   • Calculated with consideration of previously paid amounts.

Is an Initial Contribution (Eigenmittel) Required When Concluding a Mietkaufvertrag?

In most cases, an initial contribution (Eigenmittel) is required when entering into a Mietkaufvertrag in Austria, because it:

• Demonstrates the buyer’s serious intent;
• Serves as a financial guarantee for the seller (landlord);
• Reduces the total amount subject to financing or final purchase;
• Often influences the terms of the future purchase, such as a discount or fixed price.

Typically, the initial contribution amounts to 10–15% of the property value, although this is not mandated by law and is determined individually in the contract.

It is also possible to enter into a Mietkaufvertrag without an upfront payment, but:

• The seller must agree to it;
• Higher monthly rent or less favorable purchase terms are likely.

In social or subsidized housing projects (e.g. through Wohnbaugesellschaft), preferential terms may be available — such as a reduced or deferred initial contribution — but this depends on the specific contract.

What Should You Pay Attention to When Concluding a Mietkaufvertrag?

1. Clearly Defined Purchase Conditions, particularly:
   • When exactly the tenant may (or must) exercise the purchase: a specific date or time range (e.g., “no later than 5 years after contract conclusion”);
   • The purchase price should be fixed or at least calculable — it may be constant or tied to the market value at the time the purchase right is exercised;
   • The procedure for executing the purchase must be set out, including how to submit the declaration, conclusion of the main purchase contract, payment deadlines, and notarization.
2. Legal Status of the Property:
   For new or unfinished buildings, it is crucial to verify whether the developer has:
   • A valid construction permit (Baubewilligung);
   • Proper registration of land rights;
   • Secured financing.

For existing properties, check the Grundbuch (Land Register) for ownership status, encumbrances, and mortgages.

3. Contract Termination Provisions:
   This is important due to the long rental period before actual ownership transfer. If the future buyer withdraws from the purchase or cannot fulfill their obligations, it is essential to know:
   • Whether previously paid amounts (including the initial contribution and purchase-related portions of rent) will be refunded or forfeited;
   • Some contracts provide for partial refunds, others do not;
   • Penalties or compensatory payments may also apply.
4. Taxation:
   A notable feature of Mietkauf is that the real estate transfer tax (Grunderwerbsteuer, typically 3.5%) applies only at the time of actual ownership transfer. This means:
   • Throughout the rental period, the future buyer does not pay this tax, even if part of the purchase price is already being paid within the rent;
   • However, the full tax is levied on the entire purchase price at the time of exercising the option — not just on the outstanding amount.

How Broker Services Are Paid in the Context of a Mietkaufvertrag

When entering into a Mietkaufvertrag (rent-to-own agreement) in Austria, broker (Immobilienmakler) services are remunerated in accordance with the current legislation on brokerage activities — specifically, the Maklergesetz(Brokerage Act) and Maklerverordnung (Brokerage Commission Regulation).

Depending on the circumstances, the broker’s commission may be paid by:

• The tenant / future buyer, if they concluded the brokerage agreement with the agent;
• The landlord / property owner, if the broker is acting on their behalf.

Commission fees are set separately for rental and purchase contracts:

• Up to 2 months of gross rent for residential property rentals.
• In the case of purchase (if the Mietkauf leads to a sales contract), the standard fee is 3% of the purchase price + 20% VAT.

If the Mietkaufvertrag includes a binding obligation to purchase (rather than just an option), the agreement may be legally classified as a deferred purchase. In such cases, the full sales commission applies.

Example: The tenant signs a Mietkaufvertrag with a right to purchase after 5 years. If the broker represents both parties, they are entitled to:

• 2 months’ rent upon conclusion of the rental contract;
• 3% of the purchase price if they also handle the purchase phase.

Examples of Mietkaufvertrag in Practice

Case 1: Ms. Karina from Graz
A young mother from Graz rented a flat in a new residential development through a Mietkauf scheme. She made a €25,000 upfront payment and paid €950 per month, of which €300 was credited toward the future purchase price. After 8 years, she had the opportunity to buy the apartment, paying a remaining balance of €120,000. In this way, she avoided the need for a full mortgage and retained better control over her finances.

Case 2: Ms. Maria in Vienna
Ms. Maria signed a Mietkaufvertrag for an apartment in Vienna for 5 years. She pays €1,000 rent per month, with €400 counted as a prepayment toward the future purchase. After 5 years, she pays the outstanding amount(€120,000 minus €24,000 already paid) and becomes the legal owner of the flat.

Advantages of a Mietkaufvertrag

• Access to homeownership without a large initial capital.
• Time to make a final decision about the purchase.
• Opportunity to “test” the property and neighborhood.
• Gradual accumulation of the purchase price during the rental phase.
• Reduced dependence on bank financing.

Drawbacks and Risks

• Often higher monthly rent than under a standard lease.
• If the tenant decides not to buy, the upfront payment may not be refunded.
• The right to buy is time-limited — once the contract expires, terms may change.
• Dependence on the developer or owner, especially if they experience financial difficulties.
• Legal complexity — the contract must be clearly formulated, ideally with legal counsel.

Who Is a Mietkaufvertrag Suitable For?

• Young families who do not yet qualify for mortgage financing.
• Individuals with limited initial capital.
• Foreign nationals planning to live long-term in Austria.
• Those seeking to gradually invest in real estate.

Conclusion
The Mietkaufvertrag is a viable alternative to traditional property purchase, especially relevant in times of high interest rates and rising real estate prices. It allows individuals to gradually take ownership of a home without immediate financial pressure or dependence on banks. However, such an arrangement requires attention to contractual detailsandprofessional advice.