AUSTRIA Law and Practice Contributed by: Clemens Philipp Schindler and Katharina Schindler, Schindler Attorneys
An acquirer group exists if the acquirers are grouped together for economic purposes under uniform man - agement or are, by virtue of shareholdings or other - wise, directly or indirectly under the controlling influ - ence of a single person. Persons who exercise such uniform management or controlling influence are also considered part of the acquirer group. In addition, under the new Austrian RETT regime, the scope of the share acquisition or consolidation test is extended to include indirect share transfers. This means, for example, that acquiring a parent company whose subsidiary holds Austrian real estate may trig - ger RETT if at least 75% of the shares in the parent company (which itself does not own real estate) are transferred. However, intra-group restructurings are exempt under the Austrian Reorganisation Tax Act. Consequently, the RETT rate differs depending on whether real estate is acquired directly or shares in corporations or partnerships that directly hold real estate are acquired, as follows. • For the direct acquisition of real estate: up to 3.5% of the purchase price (standard rate). • For the acquisition of shares in corporations or interests in partnerships that hold real estate: 0.5% of the value of the real estate. • If Austrian real estate is transferred in the course of a reorganisation under the Austrian Reorganisa - tion Tax Act, the RETT will likewise be 0.5% of the value of the real estate. • However, under the new Austrian RETT regime there is a new tax rate if the entity involved is a so-called real estate entity ( Immobiliengesellschaf- ten ): in the case of share transfers, reorganisations or changes in shareholders, RETT is now levied at 3.5% of the fair market value of the real estate (resulting in a higher tax base), rather than 0.5% of the real estate value as previously applied. For other corporations or partnerships that hold real estate but do not qualify as real estate entities, the RETT rate remains at 0.5%. In respect of capital assets subject to capital gains tax, a step up to the fair market value is granted upon the establishment of the right of taxation in Austria – ie, the relocation to Austria. Special planning tools are
not required in this respect but it is advisable to keep records regarding the fair market value at the time of relocation. Additional income tax benefits may be granted to certain groups of persons whose relocation to Austria is in the public interest, provided there is a timely application. However, gifting an asset to a private foundation does not lead to a step-up. In the case of shares in a corpo - ration, the hidden reserves from a sale may be trans- ferred to a reserve and thus taxation may be deferred by the private foundation. 1.4 Taxation of Real Estate Owned by Non- Residents In Austria, each municipality levies an annual prop - erty tax on Austrian real estate, which is deductible from rental income. Property tax is based on the unit value (which is generally significantly below market value) and is decided upon by the local authorities. Generally, the tax rate varies between 0.1% and 0.2% annually. Non-residents are subject to limited tax liability in Aus - tria on income from the sale of Austrian real estate, at a rate of 30%. In addition, real estate transfer tax is typically levied at a flat rate of up to 3.5% of the prop - erty 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. 1.5 Stability of Tax Laws Austrian tax provisions concerning estate and transfer tax laws have remained relatively stable over recent years, but the 2025 Budget Accompanying Act ( Budg- etbegleitgesetz 2025 ) introduced several significant changes in the area of real estate transfer tax (see 1.3 Income Tax Planning ). Estate transfers involving real estate continue to incur real estate transfer tax rather than inheritance tax. There are concerns and discus - sions – albeit not confirmed – that inheritance tax might be reintroduced, but it is rather unlikely under the current government. The top income tax rate of 55% has been extended to apply until the 2029 fiscal year, while the entry-level rate has been reduced from 25% to 20%, providing
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