Private Wealth 2025

AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Katharina Schindler, Schindler Attorneys

1.2 Exemptions There are exemptions from the obligation to file a gift notification for gifts (one or several gifts) between close relatives, not exceeding EUR50,000 in total per year. Gifts between third parties trigger a notification if the value of gifts made exceeds EUR15,000 during a period of five years. Gratuitous transfers to private foundations and of real estate are also exempt from the notification obligation. There is an exemption from real estate transfer tax for family homes under Austrian tax law, under which the first 150 sq m of the family home may be transferred free of real estate transfer tax between living spous - es. The same applies for the transfer mortis causa to the surviving spouse if the family home served as the principal residence of the spouses (at the time of death). There are also certain exemptions regarding real estate capital gains taxation in case of the sale of a principal residence. 1.3 Income Tax Planning Most importantly, Austria has no inheritance or gift tax (only notification obligations, as mentioned in 1.1 Tax Regimes ), which provides several opportunities to arrange for a tax-efficient planning of asset transac - tions between individuals. In order to avoid real estate transfer tax (RETT) and land register duties when real estate properties locat - ed in Austria are to be transferred, it could be tax- efficient to use corporate entities as property owners, since RETT would only be triggered if at least 75% (or 95% for share deals before 1 July 2025) of the shares in real estate-owning corporations or interests in partnerships are transferred to a single acquirer or an acquirer group. It should be noted that, under the recently amended Austrian RETT regime, which came into effect on 1 July 2025, RETT is also triggered if at least 75% of the shares in a corporation or the interests in a partnership are consolidated in the hands of a single acquirer or an acquirer group within seven years (for share deals before 1 July 2025: if at least 95% of the interests are transferred within five years, with this consolidation test applying only to partnerships).

( Stiftungseingangssteuergesetz ). The tax rate is gen - erally 2.5% (scheduled to increase to 3.5% as of 1 January 2026), with a higher rate of 25% applying in special cases. Such tax is triggered if the transferor and/or the transferee at the time of transfer have a domicile, their habitual abode, their legal seat or their place of (effective) management in Austria. Certain exemptions apply in cases of transfers mor - tis causa of financial assets within the meaning of Section 27 (3) and (4) of the Austrian Income Tax Act (except for participations in corporations) if income from such financial assets is subject to tax at the flat rate of 27.5%, pursuant to Section 27a(1) of the Aus - trian Income Tax Act. The tax basis is the fair market value of the assets transferred minus any debts, cal - culated at the time of transfer. In addition to Austrian foundations, Liechtenstein foundations are also popular. Pursuant to a special agreement between Austria and Liechtenstein, gratui - tous transfers of assets from a person or entity with unlimited tax liability in Austria to a foundation under the laws of Liechtenstein would be subject to founda - tion transfer tax in Austria at rates between 5% (if all relevant documents of the foundation are disclosed to the Austrian tax authorities) and 10%. Real Estate Transfer Tax Real estate transfer tax is typically charged at a flat rate of up to 3.5% of the property value, but generally 2% for a transfer between close relatives in the case of agricultural and forest land. For reorganisations, a reduced rate of 0.5% applies. A registration tax of 1.1% also applies if the new owner is registered in the land register (see also 1.3 Income Tax Planning ). Exit Taxation Generally, any circumstances resulting in a restric - tion of Austria’s right to tax certain (financial) assets (or, under certain circumstances, profit potential) may give rise to exit taxation of unrealised capital gains in Austria. There is no exit tax on other types of assets, such as real estate or art. Special rules apply within the EU and according to certain tax treaties, and there are tax exemptions for assets acquired before 2011.

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