PROPERTY TAX IN AUSTRIA (GRUNDSTEUER “B”)

Under Austrian law, property owners are required to pay an annual tax on their property. That is why the real estate tax (Grundsteuer) is an important factor to consider when buying property in Austria. It should not be confused with the one-off real estate transfer tax (Grunderwerbsteuer). The Grungerwerbsteuer is paid once only when you buy a property, while the Grundsteuer is paid annually. In this article, we will tell you about this tax and the mechanism of its calculation.

What is Grundsteuer?

Grundsteuer is a mandatory tax levied in Austria on owners of real estate such as private houses and apartments. This tax is intended to finance local expenditures, including the maintenance of municipal infrastructure, roads, education, healthcare and other public services.

The amount of Grundsteuer is determined based on various factors, including land value, property type and location.

For private houses and apartments, the Grundsteuer is calculated on the basis of property valuations carried out by local assessment authorities (tax authorities). However, the specific valuation methods and Grundsteuer rates may differ from region to region or municipality to municipality in Austria. Generally, the Grundsteuer for private houses can be higher because the value of the land and the building is considered.

When is the tax paid?

The tax is paid by the owner of the property but can be passed on to the tenant. The decision on the tax comes in a maximum of 3 months. If the property tax exceeds EUR 75 per year, it is paid in four instalments: 15 February, 15 May, 15 August and 15 November. Amounts up to EUR 75 are paid once a year on 15 May.

Formula for calculating Grundsteuer

Einheitswert (assessed value of real estate) x Steuersatz (tax rate) x Hebesatz (coefficient) = Grundsteuer (property tax)

1. Einheitswert(assessed value of real estate) – determined by the tax office.

It is usually much lower than the actual (market) value of the property, as comparable prices from 1973 are used to determine the value of the unit.

2. Steuersatz (tax rate)

Tax rates for single-family homes:

• First 3.650 euros: 0 promille (promille is one thousandth of a value)
• Next 7.300 euros: 1 promille
• Above: 2 promille

Tax rates for all other real estate:

• First 3.650 euros: 1 promille
• Next 3.650 euros: 1.5 promille
• Above: 2 promille

Tax rates for agricultural and forestry enterprises:

• First 3.650 euros: 1.6 promille
• Above: 2 promille

Tax rates for all other property (e.g. real estate used for commercial purposes):

• First 3.650 euros: 1 promille
• Above: 2 promille

3. Hebesatz (coefficient)

The amount of Hebesatz is determined by the local tax office. Each municipality can determine that the above tax amount is multiplied by a certain coefficient (up to a maximum of 5). For example, in Vienna, a coefficient of 5 is applied.

Example. A property owner owns a single-family house with an assessed value of EUR 50,000. The tax amount is EUR 87.23 (see the calculation below). In Vienna, a tax rate of 500 percent is applied. This therefore results in the following annual tax amount: EUR 87,23 x 5 = EUR 436,15.

Table of examples of tax calculation for a single-family house

Is tax exemption possible?

Permanent and temporary tax exemption is possible.

Permanent tax exemption is possible in the following cases:

1. Property used for charitable purposes
2. Property legally owned by recognised religious citizens
3. Sports clubs and grounds

Temporary tax exemption is possible in certain cases, e.g. new buildings, extensions, conversion of state-subsidised property. The period of exemption depends on the Bundesland, for example, in Salzburg the maximum period is 12 years, in Steriermark – up to 20 years.

As you can see, the mechanism for calculating the Grundsteuer is not simple. That is why the VigoImmobilien team will not only help you choose the right property, but also calculate the annual tax for your home correctly and quickly.