Copying and distributing are prohibited without permission of the publisher

Austria abolishes tax exemption for gains on long-term real estate holdings

06 June 2012

Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.


Previously, capital gains, realised by resident and non-resident individuals on transfer of privately-held Austrian real estate sold after a 10-year holding period, were exempt from Austrian taxation.

Effective April 1 2012, this exemption was abolished. Capital gains from the transfer of real estate in Austria will now be taxed, at a special tax rate of 25% (after December 31 2012, the notary public formalising the transfer will withhold the tax). An option exists for taxation at marginal income tax rates.

The taxable income (loss) will be the difference between the sale price and the acquisition cost. Expenses are not, generally, deductible. To avoid the taxation of paper profits, the taxable income is reduced by an inflation allowance of 2% per year up to a maximum of 50%, beginning with the eleventh year after acquisition.

Where Austrian real estate was acquired before April 1 2002, a reduced rate of tax will apply through reduction of the taxable income to 14% of the sale price (an effective rate of 3.5%) or – if a rezoning into construction land has occurred after December 31 1987 – of the taxable income to 60% of the sale price (an effective rate of 15%). The vendor may elect out of this method of calculating tax, if it is not advantageous.

Exemptions from the new tax regime apply for the sale of self-constructed buildings (unless they have been used for earning income within the last 10 years) and for principal residences (used either two years continuously since acquisition or five years continuously within the last 10 years).

Losses from the sale of real estate may be offset against corresponding gains, but not against other income. The new tax regime also applies to capital gains on real estate held as a business asset.

Niklas Schmidt (niklas.schmidt@wolftheiss.com)
Wolf Theiss
Tel: +43 1 515 10 5410
Website: www.wolftheiss.com






International Tax Review Profile

RT @KPMGSingapore: Congratulations to @HongBengTay, Warrick Cleine, Khoon Ming Ho on being shortlisted for @IntlTaxReview Asia awards. http…

Apr 28 2016 10:22 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @BLPTax: We are delighted to have been shortlisted for "UK Tax Firm of the Year" by @IntlTaxReview in the 2016 European Tax Awards.

Apr 28 2016 10:21 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @KPMGSingapore: Tax Partner, Geoffrey Soh has been shortlisted for Transfer Pricing Practice Leader of the Yr in @IntlTaxReview Asia Tax…

Apr 28 2016 10:21 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @IoDIreland: Read more about our joint 'Tax in the Boardroom' event with @TaxInstituteIrl held yesterday https://t.co/x3nBLNVu1x https:/…

Apr 28 2016 10:06 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @JP_Lieb: And It will give nice competitive opportunities to some continental countries #Brexit https://t.co/NjvUjI86Af

Apr 28 2016 09:50 ·  reply ·  retweet ·  favourite
International Correspondents