The process of buying property in Austria

A high standard of living, education and medicine, a comfortable climate and a favorable location in the center of Europe - all this attracts many foreigners who seek to move to Austria for permanent residence. The country's leadership, realizing what an excessive influx of migrants can be fraught with, is trying to limit this flow, so there are some restrictions on the purchase of real estate by foreigners.

Features of buying by foreigners

The least difficulty in acquiring local housing will be for those who have a residence permit in Austria or one of the EU countries. And it is also important to understand that the possession of real estate does not give the right to obtain a residence permit, rather, its presence allows you to simplify the process of buying a home.

But even in this scenario, a foreigner will need to request a special permit. And not everyone receives this document, which is issued not only to individuals, but also to companies that are registered abroad or controlled by foreigners.

The final decision will depend, among other things, on the territory of which federal state the object for purchase is located. For example, if we are talking about Vienna or the popular ski resorts in Tyrol, Salzburg and Vorarlberg, a number of problems may arise, while in Lower and Upper Austria, as well as in Styria, Carinthia and Burgenland, it is quite possible to get approval. A positive decision is also influenced by the fact that the buyer will permanently reside in the acquired housing, and also that the future owner is going to open his own business in the region.

When it comes to the purchase of real estate by a foreigner who does not have a residence permit in the EU, then such citizens can obtain permission to purchase if it is of cultural, social or economic interest for a particular Austrian region and does not have negative consequences for it. Therefore, before you start choosing an object, you need to consult with experienced professionals, and it will also be very good to individually check with local authorities how they will react to a potential transaction.

Object selection

Having decided on the property of interest, it makes sense to ask for a discount, because, as a rule, the declared price will be overstated by about 5-10%. Once price agreements have been reached, the real estate agent sends a purchase offer (Kaufanbot) to the seller on behalf of the buyer. This document, in addition to describing the object and the price agreed upon by the seller and the buyer, will contain a list of additional costs associated with the purchase (Kostenaufstellung).

It is also important for a buyer of Austrian real estate to understand that not only a written agreement is valid in the country, but also an oral agreement expressing the intention to make a deal. And it can also be legally binding, so you need to be careful when negotiating with the seller.

After the purchase offer is signed, the property is removed from sale and reserved, and the future owner can no longer refuse to complete the transaction without good reason. All disputes are resolved in an Austrian court, which may oblige the buyer to pay a penalty to the agency - to reimburse the company's expenses for the selection and reservation of the object.

According to Austrian law, no advance payment is required when reserving an object. However, if the buyer is a foreigner, then such a requirement is often put forward for him. After all, it may take several months from the conclusion of an agreement to the payment of the entire amount, so the seller wants to receive certain guarantees. Usually the down payment is 10% of the purchase price of the property. The deposit is kept in a special account with a notary until the transaction is completed.

Registration of the contract

According to current Austrian laws, a notary or a lawyer with notarial authority must be involved in the transaction. He acts as a guarantor of the transaction, so it is to his deposit account that all necessary payments will be received.

The contract for the sale of real estate (Titel) in Austria is drawn up in the form of a notarial deed. The preparation and execution of the contract is carried out by the trustee of the seller and the buyer - a notary or a lawyer. If the seller of a property in Austria transfers to the buyer a contract already drawn up by his lawyer, then it is recommended to involve your own notary or lawyer who will check whether the interests are violated in the contract, as well as the legal status of the property in Austria (pledges, easements, appointment and building class land, etc.).

Since, according to business custom in Austria, all expenses of the trustee executing the transaction are paid by the buyer (with the exception of those related to the release of the property from debt encumbrances incurred by the seller), it is necessary to insist that the buyer's lawyer be appointed as the trustee. After that, the parties can begin to agree on the text of the agreement.

Austrian law does not prescribe the presence of an interpreter at the transaction. However, if one of the participants in the process does not know German, such a specialist will be needed. Sometimes this role is filled by real estate agents.

Payment for the purchase of real estate

After signing the contract, the buyer must transfer the money for the property and related expenses to the trust account of his notary or lawyer. Then the contract with the foreigner is sent to a special commission (Grundverkehrskommission). There it is considered within one to two months. This step is mandatory for all categories of foreigners, including those who have a residence permit. The decisive word in the permission for the transaction always remains with the authorities of Austria. If the commission refuses to issue a permit, the money for the property is returned to the buyer in full, with the exception of the commission to the agency. However, the owner may demand a certain amount as compensation.

Follow-up processes after the signing of the contract

After signing the contract, the authorized person notifies the Land Register of this, where a special note is made to prevent the sale of this object a second time. If the property in Austria has debt encumbrances, the trustee informs the creditor banks about the sale and obtains their consent to remove the encumbrances in exchange for transferring the balance of the debt.

After repayment of debts to banks from funds held in a trust account, banks send letters of consent to the trustee to withdraw the mortgage in the Land Register (Lastenfreistellung) to the trustee. The acquired property in Austria is released from debts and re-registered for the buyer. Only after that, the authorized person sends the balance to the seller's account. If the creditor bank agrees, the buyer can transfer the existing loan to himself. In many cases it is possible to arrange financing for the acquisition of real estate in Austria by other banks.

Thank you for your help in preparing the material:

Elena Garanina, Deputy Head of Immotrading GmbH

Viktor Novikov , Managing Director of Health aNd Wealth Investment GmbH, the Alps Hotels Investment GmbH