AUSTRIA Law and Practice Contributed by: Christoph Urbanek, Irena Gogl-Hassanin and Mario Schiavon, Urbanek Law
for the entire duration of the contract. However, if no indexation clause or adjustment clause is specified in the lease, the rent will usually remain constant for the entire duration of the lease. 6.6 Determination of New Rent If the rent in Austria is to be changed or increased, the determination of the new rent is based on the rules agreed in the lease and the relevant legal provisions, such as the Tenancy Act ( Mie- trechtsgesetz – MRG). In the case of residential leases, a rent increase is generally only possible within the framework of value adjustment claus - es or after a certain period of time, whereby the increase is usually linked to the price index (eg, the consumer price index). In the case of com - mercial leases, rent increases are more flexible but contractual agreements such as indexations, market adjustments or rent reviews may also play a role here. If no explicit provision is made, the rent adjustment can usually be reviewed by an arbitration board or a court of law if either party disagrees with the amount of the increase. 6.7 Payment of VAT Rental income is generally subject to sales tax (value added tax, VAT), unless it is a tax-free rental. The general VAT rate for commercial leas - es is 20%. Exemption from VAT generally applies to residential leases, unless the landlord decides to waive the exemption and apply the tax liability (so-called “option to tax liability” ). In this case, the standard tax rate of 20% would also apply to residential leases. Landlords can claim back VAT on expenses and investments related to the property if they opt for VAT. 6.8 Costs Payable by a Tenant at the Start of a Lease In addition to the rental fee, there may be addi - tional costs at the beginning of a tenancy, such as a security deposit, which as a rule may not
exceed three months’ rent. In addition, contract fees may be incurred for the notarisation of the lease, depending on the agreement between the parties. In commercial leases, brokerage fees are often payable, which are usually borne by the tenant and can amount to up to three months’ rent. Operating costs such as heating, water and waste fees are also often to be borne by the tenant and can be determined at the begin - ning of the tenancy or apportioned to monthly advance payments. Additional administrative costs or renovation costs are also possible if this is agreed in the lease. 6.9 Payment of Maintenance and Repair The costs for the maintenance and repair of communal areas such as parking lots and gar - dens (landscape maintenance) are usually divid - ed between the landlords and tenants in accord - ance with the rental contracts and the house rules. In many cases, the landlord is responsible for the maintenance of these areas, but can pass on the costs to the tenants via the operating cost statement. This is usually done in proportion to the pro-rata area used or in accordance with the agreement in the lease. In the case of com - mercial leases, individual agreements can also be made, whereby larger rental areas or spe - cific units of use often bear a higher share of the costs. 6.10 Payment of Utilities and Telecommunications In the case of commercial real estate with multi - ple tenants, operating costs such as electricity, water, heating and telecommunications are usu - ally paid directly by the individual tenants to the respective providers or they are billed centrally by the landlord and passed on proportionately in the operating costs statement. The allocation is usually based on a contractually agreed key, such as square metres or actual consumption,
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