Learn about the subtleties and nuances of fees associated with buying property in Vienna. Explore the fee policy for non-residents.
Initial Expenses When Purchasing Real Estate in Vienna
Austria’s real estate market ranks as the second most expensive in Europe, according to Deloitte’s Real Estate Index 2022. Still, Vienna, with its average square meter cost of €5,788, stands as an appealing prospect, especially when compared to other high-demand European metropolises. The charm of Vienna makes it an attractive destination for property investors and homebuyers.
If it’s the first time you embark on discovering your ideal property in Vienna, you will reveal that the final cost doesn’t only involve the dwelling price. You should also add the expertise of seasoned real estate agents, rigorous appraisals, and detailed property inspections to your property expenses. It doesn’t end there, though. Legal intricacies and administrative formalities, such as creating and registering the purchase and sale agreement, are integral to the equation, too.
So, how much will it cost you to buy a property in this charming city? Let’s discover this together.
What You Need to Buy Property
To buy property in Vienna, you’ve got to prepare the necessary documents to smooth the way. Here’s a rundown of what you’ll need on hand when you’re ready to make your move:
- Proof of citizenship — this is typically a passport or national ID.
- Valid residence permit — if you’re a foreigner, this document shows that you are legally permitted to live in Austria.
- Your property purchase contract or a draft of it — this document outlines the terms and conditions agreed upon by both buyer and seller.
- A current excerpt from the property’s land registry — this document provides vital details about the property, such as the current owner’s name, legal description of the property, and any limitations or issues that might affect the property’s ownership.
- Financing details / Austrian bank account information — if you are going to make a loan, you should have a loan agreement. For property transactions, opening a bank account is usually required. Note that you have to provide your account number and other relevant details.
For corporate buyers or associations, you may need to have additional documents. These could include business registration documents, minutes of meetings authorizing the purchase, or financial statements, among others.
While you are busy with paperwork, consider looking for a perfect property match for purchase or rent at Luxury Vienna. Also, here you will get qualified legal support regarding the documentation you need.
5 Property Taxes and Fees for a Foreigner
Purchasing property in Vienna as a foreigner comes with a set of tax obligations. These taxes, payable at the point of purchase and beyond, contribute to the overall cost of property ownership. Therefore, you should factor them into your budgeting and financial planning.
1. Transfer Tax
When purchasing a property in Austria, you’ll be required to pay a transfer tax. This is a mandatory fee that you, as the buyer, will need to cover. The tax is usually set at 0.5%-3.5% of the total price of the property you’re buying. What this means is that as soon as you’ve officially taken ownership, you’ll need to pay this tax.
Note that there is also a 1.1% registration fee for making ownership changes in the land registry.
2. Value Added Tax (VAT)
Property sales are usually exempt from the VAT. However, it is possible to opt out of this exemption in certain circumstances so that VAT will be 20%.
3. Notary and Legal Fees
The notary and legal advisor ensure all documents are in order, the contract is legally sound, and the transfer of ownership goes smoothly. Notary and legal fees can vary depending on the complexity of the transaction, but you can typically expect to pay around 1% to 3% of the property’s gross price.
4. Mortgage Fees and Interest Rates
If you’re financing your property purchase through a mortgage, you may need to pay loan origination, appraisal fees, and others. Additionally, the interest rate on your mortgage can greatly influence how much you end up paying back in total over the loan duration. All these added expenses can account for around 2%-3% of your loan amount.
5. Real Estate Valuation and Survey Costs
Before purchasing a property, we recommend having it professionally valued and surveyed. A valuation gives you an accurate picture of the property’s worth, ensuring you’re not overpaying. A survey, on the other hand, may reveal any potential structural issues or legal restrictions. These services usually cost from a few hundred to a few thousand euros, depending on the property’s size and value.
If you are well-positioned to make your Austrian property dream a reality, you are now one step closer to this. By being aware of the costs upfront — from transfer tax and VAT to notary fees, mortgage expenses, and valuation costs — you can accurately plan your budget and make informed financial decisions.