Buyers Guide – Ski property for sale in Austria
Buying a property in Austria is an exciting step, however we understand that for first-time buyers it can seem very intimidating. That’s why we’ve created this Buyer’s Guide to alleviate any concerns that you may have. All of our ski property for sale in Austria comes with our specialist advice and expert knowledge. We will walk through every transaction with you, step by step, ensuring that the process of buying in Austria is as hand-tailored to you as your bespoke Chalet.
Introduction to AustriaAustria is a gateway between east and west Europe. It borders Switzerland, Liechtenstein, Germany, the Czech Republic, the Slovak Republic, Hungary, Slovenia and Italy. The country is divided into nine Federal Provinces and benefits from a diverse landscape ranging from the Eastern Alps to the Bohemian Massif. Because of its ideal location Austria makes a great base from which to explore the whole of Europe.
The River Danube flows approximately 220 miles through Austria on its way from the Black Forest in southern Germany to the Black Sea. Austria’s highest mountain is Grossglockner (3,798m). It lies in the centre of the Hohe Tauern National Park and is part of the largest nature reserve in the Alps. This mountainous country is nearly half covered with forests and has freshwater lakes that are clean enough to drink.
For many, Austria has the perfect climate; warm summer days with temperatures around 25ºc to 35ºc. It also has sunny, chilly winters that hover around 0ºc. Therefore, the mountains are snow-covered in winter but warm and green in summer. Our ski property for sale in Austria is located in the provinces of Salzburg, Carinthia, Tyrol and Vorarlberg.
who can buy in Austria?Austria has been a member of the EU since 1995. Although EU-citizens are allowed to buy and live permanently in any house they wish in Austria, these rules do not apply when it comes to buying a holiday home. Austria is divided into nine self-governing Federal Provinces. Each of these Provinces has their own rules when it comes to buying a holiday home:
EU-CITIZENS – If you are an EU citizen you can buy ski property for sale in any of Austria’s nine Provinces. The process is very straightforward. If you own an EU company it is also possible to buy in the company’s name.
NON EU-CITIZENS – If you are a non-EU Citizen then there are restrictions on what you can buy in Austria. It is only possible to buy ski property for sale with a ‘second home’ status in the Tyrol Province, Salzburg Province or the Vorarlberg Province. It is however possible to buy in some of the other provinces.
EU COMPANIES – Alternatively, you can buy property in the name of an EU company. If you are the owner of an EU company then it is possible to buy anywhere in Austria.
Benefits of buying in an EU-company – If you want to buy a property with more than two owners then buying in the name of an EU company is a good option as it is only possible to have two individual names on the purchase deeds in Austria. Another advantage is that ownership can be transferred tax free (to children or grandchildren, for example) by a transfer of shares.
Costs of setting up an EU-company – The set up costs for an EU company start from around €2,000. You will be required to pay a yearly maintenance fee of around €1000 as well as formalities such as holding an Annual General Meeting.
Purchase Process of Ski Property for Sale in AustriaThe process of buying a property in Austria is very straightforward. The notary, who is a semi-public official, will act on behalf of both the purchaser and the vendor, he will draw up the deed of sale and all the documents required to transfer the legal ownership. The notary has a duty to protect the interests of both parties.
Both the purchaser and the vendor are required to attend the notary’s office to sign the deed of sale in his presence. Alternatively, both parties can sign a power of attorney authorising one of the secretaries working in the notary’s office to sign the sales deed on their behalf. In this case you will receive from the notary a copy of the deed of sale in German and a professional English translation. You will also receive a power of attorney (also in English) which authorises the notary’s secretary to sign on your behalf.
You will need to take the power of attorney to a Notary Public (not a solicitor) in your country of residence to have your signature witnessed and the Notary Public will then send the document off to the foreign office to have it ‘legalised’. Alternatively, documents can be signed and legalised at the same time if taken to the Austrian Embassy. If you prefer, you can hop on a plane and sign in person at the notary’s office!
Purchase CostsPurchase costs for ski property for sale in Austria works out about 6.6% of the gross purchase price. You will be required to pay the notary fees after the contract of sale has been signed. Fees are calculated as follows:
Purchase Tax ‘Stamp Duty’ – 3.5% of the gross price
Registration in the Land Registry – 1.1% of gross price
Notary’s fees – between 1.5 and 2% of gross price
Court costs, administration fees – approx. 150 euros
No Buyers Fees!Our service is free! Alpine Marketing does not charge any fees to the buyer. Buyer’s fees can be as much 3%, so there is an instant saving when you buy through us. We are also completely independent sales agents working with all the top developers in the Austrian Alps. As we do not develop any property ourselves we can offer unbiased, independent advice.
Purchasing in stage paymentsNew build properties are paid for in stages. All payments are made through the notary who acts as trustee for your money. The instalments are made into a client account. At each stage the payments are only released from the client account when an independent surveyor has inspected each stage. They then need to officially signed it off with the notary. Purchase payments will typically be something like this:
15% at start of building works
35% on completion of the shell and roof
20% on completion of plumbing and electrical installations
12% on completion of the façade & windows
12% on completion of the property
4% on hand over of keys
2% after three years (or after developer providing a bank guarantee or insurance to the purchaser)
MortgagesIf you are interested in purchasing with a mortgage it is possible to borrow up to 60% of the purchase price from an Austrian Bank. Banks will not lend across boarders. Therefore if you want to buy with a mortgage in Austria then you will need to take a loan through an Austrian bank. Variable interest rates are around 2%. It is also possible to take fixed rate mortgages for up to 20 years. We can recommend banks in all of the ski resorts we sell in as we have contacts throughout Austria.
LENDING CRITERIA – Banks are happy to lend so long as you are buying a property and renting it for touristic use. This can be either flexible rental property, fully managed rental property, or property with a guaranteed rental return. In this case your property would be classified like a ‘small business’. The income you earn from your rentals therefore may be used to cover the loan.
TAX ADVANTAGES – There may be tax advantages to taking a mortgage to buy your ski property. If you rent your property it is possible to offset the interest on your mortgage payments against any profits you may make on your rental income. This therefore reduces your tax liability. You can also write off up to 10% of the costs of your furniture as depreciation against your rental income. Additionally, as your rental income will be in euros you do not have any currency exposure if you intend on paying your mortgage from rental income.
MORTGAGE FEES – Banks will charge a set-up fee. This is usually around 2% of the value of the loan. They will also charge an appraisal fee of 0.5%. Lastly, you will need to pay the notary a fee of 1.5% of the amount of the mortgage. This is to register the mortgage lender in the land registry.
Other Financing Possibilities
When buying ski property for sale in Austria, there may be other financing options available to you. An alternative option is to borrow against an existing property in your own country of residence. You can then make a purchase as a cash buyer.
International Money TransfersWhen you are buying a ski property in Austria and making international money transfers, fluctuating exchange rates can make a huge difference to the final amount you receive in your bank account.
We work closely with a leading currency exchange experts for all of our clients money transfers, international payments & foreign exchange dealing’s. Our contacts here provide the quickest and easiest way to transfer money internationally. They also consistently provide bank-beating exchange rates to help both companies and private individuals achieve significant savings. To find out more click here
Construction ScheduleConstruction in the Alps only takes place in the summer months. This is because during the winter months the ground is frozen and covered in snow. As a result, Alpine developers optimise their build schedule and usually build and complete an apartment building or several chalets in one summer season. The advantage to buyers is that during the winter they can sign their purchase contract to secure their property but they will not have to start making stage payments until construction starts in the spring.
Construction GuaranteesAll new build Austrian property are covered by a 30 year building guarantee. This is against all building defects, and developers will usually guarantee building fixtures for two years.
FurnitureApproximately 95% of our ski property for sale in Austria is either built to-order or already constructed. Our built-to-order properties remain ‘unfitted’, meaning that you can personalise your property which is included in the price. You can choose from an extensive range of bathroom fittings, flooring, and wall tiles etc. Additionally, many of the properties we have available also include furniture in the price. The developers for these projects offer a ‘turn key’ service. This means that they provide every comfort for you so that your property is completely ready to occupy. Where furniture is not included in the purchase price, we can easily put you in touch with companies that will provide these ‘turn key’ furnishings . We work closely with interior designers who provide an extensive choice to suit every taste. Ranging from the ultra-modern to romantic traditional styles, we can fit your chalet with furnishings perfect for you. These furniture options are extremely flexible and affordable. They include everything you will need such as sofas, wardrobes, beds, cutlery, crockery, and linen etc. For more information on which properties include the cost of furniture please either contact us or see our individual property brochures.
Although the cost of the furniture collections are included in many of the properties we sell, for mortgage purposes this cost must be deducted from the mortgage price as banks will not lend on furniture. As an example, furniture collections for a 2-bedroom property may range somewhere between €20,000 to €40,000 net.
Rental requirementsMost ski property for sale in Austria is obliged to be rented when their owners are not using them. This is because the tourism industry forms an important part of Austria’s economy. It accounts for over 15% of its GDP. Because of the importance of the tourism industry, the Austrian government does not want chalet owners to leave their properties empty for large parts of the year.
Owners who do not live permanently in the mountains are encouraged to make sure that their property is regularly visited. Filling Austrian properties with holidaymakers is imperative for a good tourism flow in the villages. The advantage to owners is that they can benefit from their property earning an income for them. There can also be some great tax advantages to purchasing in this way.
Rental OptionsDepending on which property you buy there are several rental options. One option is using a large, professionally managed tour operator who will efficiently handle all your rentals when you are not using your property. Alternatively, you can rent your property yourself with the help of a local tour operator. You could perhaps even make your own website to advertise your property. Rental companies typically charge between 20% and 30% commission for their services. Whichever option you choose a dedicated management company can deal with the hand over of keys for your guests. They can also deal with the laundering and cleaning of your property when guests have departed.
GUARANTEED INCOME OPTION – If you are looking for ski property for sale with investment in mind and the security of a guaranteed income, we have handpicked some great investment properties for you. Rates are usually guaranteed for a three-year period on a rolling contract. This is index-linked and will offer you piece of mind, especially when combined with a fixed-rate mortgage.
FULLY MANAGED RENTAL OPTION – If you are looking for a hands-free investment, then we recommend a fully managed rental service. This is where the developer teams-up with a large tour operator who efficiently handle all your rentals when you are not using your property. They then pay you a regular income. As an owner you simply book your forthcoming winter and summer dates in advance and the tour operator will do the rest. Many fully managed chalets and apartments also offer extensive additional facilities including restaurants, spas and swimming pools.
FLEXIBLE RENTAL OPTION – If you want to maximise the personal use of your property then a property with a flexible rental option is perfect for you. In this way you can either rent your property through a local tour operator, or rent it privately. If you chose a tour operator, they will advertise your property, manage your online bookings, meet and greet your guests, and deal with the laundering and cleaning of your property when your guests have departed. If you chose to rent privately, you can make your own web site to advertise your property. You could even advertise on a holiday rental portal, of you can rent privately to friends and family.
PREFER NOT TO RENT? – Second Home Status – If you prefer not to rent your property, we offer a small selection of properties that have a rare second home permission. This means that you have no obligation to rent. Read more about the increasing value of second home status properties in Salzburg on our news page.
Rental Income and Running Costs
The expenses of a property’s development are usually divided up proportionately between the owners, according to the size of their property. As a rough guide, the basic running costs for a property usually work out around 3-5 euros per m2/month. This would cover the cost of snow clearance, rubbish removal, water rates, building insurance, and local property taxes, cleaning and lighting for any communal areas, and maintenance of the gardens etc.
These expenses would not include your own personal usage of heating and electricity, as this varies depending on how much you use the property. If you buy a property with extensive leisure facilities, such as swimming pools and spas, then these costs could increase to around 7-11 per m2/month.
Tax advantages to rentingRenting your new-build property can have tax advantages. This is because it is possible to reclaim part, or all of the VAT on your purchase, giving a discount of up to 20%. To be eligible for this VAT discount you would be expected to rent your property professionally when you are not using it. You will also need to show an overall profit over a period of 20 years. You are permitted to claim back all the VAT – the full 20% – if you rent your property commercially and do not use it yourself. If you declare in advance that you will be privately using your property for some of the year, the amount of VAT that you can reclaim depends on the ratio of personal use to rental use.
To reclaim the tax you will need to register for VAT. In some cases you will have to pay the gross price and then claim the tax back. This usually takes two to three months. You will be appointed a tax advisor to help you with this. It is possible to obtain a bridging-loan for this if required, however in some of the property we sell this is not necessary. This is because the developers will have pre-arranged everything for you so you will only need to pay the net price.
If you would like further information on this subject please contact us and we will email you our specific Tax-Back Guide.
If you decide to take advantage of the VAT rebate and rent your property to holiday-makers, you will be required to pay income tax on your rental income. Much of these taxes can be offset. There are a number of ways to reduce the tax you pay on your rental income. For example, the interest you pay on your mortgage can be written off against rental income profits. You can also write off up to 10% of the costs of your furniture as depreciation against your rental income.
If you rent your property to holiday-makers, and pay the income tax for these rentals in Austria, then it is possible to receive a tax free allowance of between 2,000 – 11,000 euros per person per year. So, if two people purchase a property together the allowance could be up to 22,000 euros per year.
If you claim the VAT back on your purchase you will also be required to become VAT registered with the tax authorities for 20 years. You will need to charge VAT at a rate of 13% on your rentals. This can then be reclaimed each quarter upon the filing of accounts. We can recommend local tax advisors to help with your tax returns. The tax advisor will charge a one off fee to set up your registration and annual tax returns will cost in the region of 500 euros per year (please contact advisors directly for prices) .
AUSTRIAN INCOME TAX RATES
Profit Percentage Income Tax payable
0 euros – 11,000 euros 0%
11,001 euros – 18,000 euros 25%
18,001 euros – 31,000 euros 35%
31,001 euros – 60,000 euros 42%
60,001 euros – 90,000 euros 48%
90,001 euros – 50%
INCOME TAX OBLIGATIONS IN YOUR HOME COUNTRY
Your income tax obligations in your home country also have to be considered. Please therefore inform your tax advisor that you are renting out a vacation apartment in Austria. He or she will also need to see what profits you have made over the year. They will then make sure that you do not pay tax twice on the same income. If you need help finding a tax advisor, we can put you in touch with excellent UK tax advisors and Austrian tax advisors specialising in ski property.
When you rent your property you will need to charge your guests tourism tax for the nights they spend in your property. This rate of tax varies from resort to resort. As a rough guide it is somewhere between 1 and 3 euros per night per person for each guest over the age of 14 years.
CAPITAL GAINS TAX
The housing market in Austria has been subject to a number of controls in order to keep house prices within reach of locals, especially in the tourist areas. Capital Gains Tax of 30% will apply to any profits you have made on your property (effective since Jan 1, 2016).
Inheritance tax has been abolished in Austria (effective since August 1, 2008)
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Disclaimer: Whilst we make every attempt to ensure the accuracy and reliability of the information we provide, we are not tax advisors or lawyers. We are reliant upon information provided by third parties and therefore, the company, its employees and agents will not be responsible for any loss however arising, from the use of, or reliance upon this information. Legal advice or tax advice must be received by a professional Lawyer or tax advisor and we are happy to put you in touch with companies if you would like further information. These particulars and the company website do not form part of any offer or contract and must not be relied upon as statements or representations of fact. Registered Office: Bentinck House, 12 Bulstrode Street, London W1U 2JF, Registered in England. No. 06423236.