All You Need to Know About Buying an Apartment in Vienna

Here is everything you need to know about buying an apartment in Vienna.

Regulations For Expat Buyers For an Apartment

Wien combines a high quality of life with a relatively low cost of living compared to European cities of a similar standard. In addition to the city’s culture, security and relaxed lifestyle, Viennese real estate provides a relatively stable investment, and the interest of foreign buyers has been on the rise.

It is possible for non-Austrians to acquire property, but expect some hurdles. Below are the basic regulations, which can vary for different nationalities, plus services that may help you avoid bureaucratic traps.

Somewhat surprisingly, the capital is not the most expensive city in Austria. With an average price of about €3,886 per square meter for new apartments, Vienna is more affordable than Salzburg (€4,160). However, this is not a place that will offer high yields. Price inflation is low and the real estate market very stable, so you can expect moderate, but steady, gains on your investment. Overall, the system favors permanence over quick turnover.

EU Citizens, EEA Nationals and Swiss Nationals

Special Cases

There are groups of people who do not need a special permit to acquire property. They should apply for a so-called negative certification – confirmation that they are exempt from the permit requirement under the Land Acquisition by Foreigners Act – from the Municipal Office MA35. According to the City of Vienna, this applies to:

• Iranian citizens who are not gainfully employed;
• Swiss citizens;
• People favored due to state treaty regulations;

Employees of the following institutions;

• United Nations, or UNO;
• Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization, or CTBTO (and their spouses);
• International Center for Migration Policy Development or ICMPD;
• United nations Industrial Development Organization, or UNIDO;
• Organization for Security and Co-operation in Europe, or OSCE;
• Joint Vienna Institute;
• Organization of the Petroleum Exporting Countries, or OPEC;
• Wassenaar Arrangement, or WA;
• European Patent Organization, or EPO;
• International Atomic Energy Agency, or IAEA

To apply for the negative certification, You need to submit the following documents

• Application for issuance of a negative certification;
• Proof of citizenship (e.g. passport);
• Contract or draft of contract (Kaufvertrag oder Vertragsentwurf);
• Current excerpt from the land registry of the property (Grundbuchauszug);
• Purpose of use of the acquired object;
• Employees of international organizations also need a current confirmation (in the original) from the competent personnel office (legitimation card);
• Additional documents may be required for legal persons or associations (e.g. company documents).

Depending on the country of issue, the original documents may need an apostille and/or a certified German translation [see Directory, p 207, for certified notary translators

Third Country Nationals

People who do not fall into the above categories need an official permit to purchase property or acquire building rights in Vienna. Note: The permission process can take up to six months. In general, the request is approved if the purchase is of social, macroeconomic or cultural interest and does not have a negative effect on national interests. Most people easily meet this requirement: The social interest criterion is fulfilled if the transaction satisfies the individual housing needs of the buyer; the economic requirement is met if the transaction leads to the establishment, expansion or maintenance of a business and the cultural criterion is fulfilled by foreign scientists.

To obtain the permit, which requires payment of fees that can add up to about €130 per applicant (as of June 2018), you need to contact the office responsible for the acquisition of real estate, which in Vienna is Division 1.1 of the Municipal Authority MA 35 for Land Acquisition by Foreigners [MA 35, Referat 1.1, Niederlassungsbewilligungen & Ausländer grunderwerb], [see Directory, p 210]. They provide relevant information and forms here:
wien.gv.at.These are the documents you need to submit:

• Proof of citizenship [e.g. passport or, in some cases, a specific proof of citizenship document (Staatsbürgerschaftsnachweis), which can be obtained from your Embassy];
• Valid residence permit;
• Contract or draft of contract (Kaufvertrag oder Vertragsentwurf);
• Current excerpt from the land registry of the property (Grundbuchauszug);
• Purpose of use of the acquired object; * For legal persons or associations additional documents are required (e.g. company papers).

You do not need the special permit if you acquire the apartment together with your Austrian spouse or if you inherit the property [see Owning, Inheritance and Bestowal, p 190]. Note that certain corporate structures, such as a limited company [Gesellschaft mit beschränkter Haftung or GmbH], do not need this approval either, so this could be a viable option, especially if you intend to buy several properties [Met 2015, kf].

Discrimination

You’ve found an Apartment in Vienna you like

Due Diligence

In addition to at least two viewings of the apartment, there are several things you want to verify before actually buying the property.

Land Registry (Grundbuch)

Information about any real estate property is documented in the government land registry, an official electronic database containing an index of Austrian real estate lots, which is open to the public. It is your duty to check the respective entry in the land registry before acquiring property. You can rely on the correctness of the information in it, and you cannot later claim you were unaware of something in the registry that turns out to be to your disadvantage. There are three ways of accessing the land registry, which costs €14.40: You can personally visit any district court (Bezirksgericht) or mapping office (Vermessungsamt), request electronic access via the Federal Ministry of Justice (Bundesministerium für Justiz), or hire a notary or lawyer, as they have electronic access.

The Land registry contains crucial information such as:

• Postal address of the property;
• Permit;
• Allowed use according to public law;
• Any legal requirements, rights and restrictions related to the property such as the seller’s ownership title, mortgages and other encumbrances, pre-emption rights and rights of way;
• Documents associated with the property or its ownership.

Report on the useful value (Gutachten Uber Den Nutzwert)

Another important document is the report on the useful value of the property, which is typically commissioned by the seller and produced by a civil engineer or sworn court expert through a professional appraisal (Parifizierung). The Nutzwert is an official measure of the value of the property in comparison to other units in the same estate. It is calculated based on the certified building plan and depends on the size of the apartment (Nutzfläche) as well as on possible surcharges and markdowns due to value-enhancing or value-diminishing features. Among other things, the useful value is used to determine operating costs (Betriebskosten).

Energy Certificate (Energieausweis)

The energy certificate contains information on the expected heating energy consumption of a property and other related data. The certificate is issued by civil engineers, builders or heating and electrical engineers. The seller is to show an up-to-date Energieausweis to the purchaser before the contract is signed and provide a copy to the buyer, at most, 14 days after the transaction. In addition, the prospective buyer should be given access to information on working expenses and other additional costs.

Owners’ Association (Eigentumergemeinschaft)

When you buy an apartment, you become a member of the building’s owners’ association. [see Owning, Owner Association and Property Management, p 185]. As a prospective owner, you are permitted access to the minutes of the last three owners’ meetings. In addition, you should ask the property management about the current reserve fund (Rücklage) and whether substantial repair work on the building is planned in the near future [Sparkasse].

Planning and Building Regulations (Flachenwidmungsplan)

You should also look at the zoning and development plans, which show what type of building activities are allowed on a property. For this, you can consult the Municipal Office MA 21.

Talk to a Notary or a Lawyer

Cost For Buying an Apartment in Vienna.

In Austria, the acquisition of real estate involves substantial closing costs; you can estimate that you will pay about 10 percent to 15 percent of the purchase price

Typically, The Costs include:

• Purchase price (Kaufpreis);
• Land registry fee (Grundbuchsgebühr);
• Taxes on the purchase of real estate (Grunderwerbssteuer);
• Commission for real estate agent (Maklerprovision);
• Fee for lawyer or notary, including notarization of contract; (Beurkundung or Beglaubigung).

Purchase Price (Kaufpreis)

The asking price should be compared not only to other similar listings, but also to the current real estate index, which is published yearly by the Organization for Real Estate and Wealth Managers.

These are the relevant data for Vienna as of 2018

Type of Appartment	Average price in € Per square meter	Increase in Value relative to previous year
New freehold apartments (Neue Eigentumswohnungen)	3,886.10	+ 1.8 percent
Used freehold apartments (Gebrauchte Eigentumswohnungen)	2,722.50	+ 2 percent

The real estate index also shows average prices for all 23 Viennese districts, indicating not only the price differences between districts, but also which have exhibited the highest increases during the past year [see Neighborhoods, p 37, for separate entries for each district]. In Vienna, used freehold apartments are most expensive in the 1st district (€4,262/ m² on average), while the 15th is the cheapest (€2,097/m² on average). The greatest increases in value have been observed for the 11th (+3.7 percent), 17th (+3.6 percent), 19th (+2.8 percent), 2nd (+2.7 percent), 14th (+2.7 percent), and 16th districts (+2.7 percent).

Fee for Land Registry (Grundbuchsgebuhr)

You also need to pay a fee to be entered into the land registry. Usually, it is 1.1 percent of the purchase price. If you have a mortgage, and a lien (Pfandrecht) is documented in the registry, you need to pay another 1.2 percent of the value of the mortgage. Depending on payment modalities, the application costs €44 or €62.

Taxes on the Purchase of Real Estate (Grunderwerbssteuer)

The acquisition of real estate is also subject to taxes, which are paid by the buyer and usually set at 3.5 percent of the purchase price. Different rates may apply if the seller is a relative of yours.

Commission for Realtor (Maklerprovision)

The real estate agent fee is typically split by seller and buyer. While it is negotiable, there are upper limits (which do not necessarily apply to investment property). Remember that the fee is only due upon signing of the contract, so do not make any advance payments to the real estate agent.

The maximum commissions (Plus value added tax or Vat) depend on the purchase price

	Purchase Price	Maximum Realtor Commission
Up to	€36,336.42	4 percent (plus 20 percent VAT)
from	€36,336.42 to €48,448.51	€1,453.46 (plus 20 percent VAT
Above	€48,448.51	3 percent (plus 20 percent VAT)

It is common in Austria that a realtor works for both seller and buyer simultaneously (Doppelmakler). Realtors are obliged to inform their clients in advance about such an arrangement. In some cases, buyers may benefit from this deal by not having to pay a commission (if so indicated in the listing), but usually the realtor is paid by both parties.

Compensation for Notary and/or Lawyer

For drawing up the contract, preparing the application for entry in the land registry (Verbücherung) and acting as a fiduciary, the notary or lawyer receives 1 to 3 percent of the purchase price plus 20 percent VAT. The notarization (Beglaubigung) of the signatures on the contract, and potentially on the lien certificate (Pfandbestellungsurkunde) of the mortgage, requires the services of a notary or court official and also costs a fee. If you can choose the notary, do compare prices in advance, or negotiate a flat fee [Nebenkosten].

Making or Rescinding a Purchase Offer

Typically, the buyer makes a purchase offer (Kaufanbot) to the seller. Do not sign such an offer unless you are absolutely sure you want to take the step buying an apartment in Vienna, and have done your due diligence. Purchase offers, once signed, are legally binding, and you can only rescind them under very specific conditions, such as when you’ve signed the offer on the day of the first viewing of the apartment. If it’s even possible, rescind the offer in writing as quickly as possible. The right to cancel ends, at the latest, one month after the first viewing. You may want to seek a lawyer’s advice.

Drafting the Contract For Buying an Apartment in Vienna.

A notary or lawyer draws up the purchase contract. This document should contain:

• Names, addresses and nationalities of the involved parties;
• Address of property;
• Exact denotation and detailed description of the property, its location and equipment;
• Purchase price (Kaufpreis);
• Declaration of owner that owner agrees with the transfer of the property rights (Aufsandungserklärung);
• Agreement on the modalities and the date of the payment;
• Information on existing insurances;
• Date of handover of keys and potential reasons for postponement;
• Agreement on liability for damages and potential waiver of warranty claims*;
• Possible liabilities on the property and agreement on modalities in the case of a nonliability-free transfer;
• Agreement on who pays for the drafting of the contract (typically the buyer);
• Criteria and modality of termination.

*Note that transactions between private individuals differ in a crucial way from business transactions between companies and consumers: In the case of private individuals, the contract can include a waiver of warranty claims (Ausschluss von Gewährleistungsansprüchen). Such a waiver is typically expressed by stating that the buyer has viewed the apartment and the seller does not bear liability for a certain quality of the property. Such a provision makes it practically impossible for buyers to make sellers liable for damages. Therefore, buyers should insist that the functioning of sanitary installations, heating and other utilities is explicitly assured in the contract

Signing The Contract

At the appointment to notarize, i.e. finalize, the contract (Beurkundungstermin), all involved parties sign it, after carefully reading through it, including the fine print. It is of utmost importance that, in the presence of the notary, the so-called priority notice (Vormerkung) is applied for. The priority notice is entered in the land registry, ensuring the validity of the purchase until the new owner is officially entered.

Paying the Purchase Price

The actual financial transaction is usually handled via an attorney or notary who acts as a fiduciary (Treuhänder). This arrangement ensures that both buyer and seller fulfill their duties and are simultaneously protected. The fiduciary sets up an escrow account (Treuhandkonto) and submits the payment request (Zahlungsaufforderung) to the buyer two to eight weeks after the purchase contract was signed. In addition, the purchase contract must be sent to the tax authority and the real estate acquisition tax paid as soon as possible, as this is a precondition for registering the new owner in the land registry. Once the tax is paid, the buyer receives a clearance certificate (Unbedenklichkeitsbescheinigung) from the tax authority, which is later submitted to the court.

Entry in the Land Registry (Eintrag Das Grundbuch)

Finally, the day has come: the entry in the land registry (Eintrag ins Grundbuch), which is perhaps the most crucial step in any real estate transaction. This – not your signature on the contract – makes you the official owner of the property in Vienna. You apply for entry in the land registry in writing to the local district court (Bezirksgericht). The wording requirements on the application are extremely precise, so it is advisable to use the services of a notary or lawyer. Together with this application, you turn over the following documents:

• Purchase agreement with the signatures of all contracting parties certified by court or notary;
• Clearance certificate (Unbedenklichkeitsbescheinigung) from the tax authority (Finanzamt);
• Proof of citizenship (Staatsbürgerschaftsnachweis), proof of EU citizenship (Nachweis der EU Staatsangehörigkeit) or, for nonequated expats, the approval
  from the Municipal Office MA 35 [see Owning, Third Country Nationals, p 168].

Potential Additional Requirements Condominiums

1. Statement by building authority or expert report on the existence of independent freehold apartment units;
2. Report on useful value (an official measure of the value of the property in comparison to other properties in the same estate, [see Owning, Due Diligence, p 171] by civil engineer or sworn court expert;

• Possible statement of cancelation or agreement of financing banks, pre-emptors or others;
• Possible order for the intended disposal or pawn;
• Possible approval from the competent office for the acquisition of real estate (Grundverkehrsbehörde).
• Other documents as required in specific case

Welcome to your New Property in Vienna

Home Ownership

Owner Association and Property Management

Maintenance and Renovation

After buying an apartment in Vienna, you are also allowed to sublet your property to tourists and other visitors via online portals, such as Airbnb, but this is subject to strict regulations. For instance, depending on the number and location of apartments and other factors, you may need the approval of the other owners in the estate or even a business license. So, before launching your Airbnb business, get informed!

Selling, Bequeathing, or Bestowing Your Property in Vienna

Home Selling

Both selling and buying a property in Vienna are complex processes, so you should certainly consult a legal professional. (Not surprising, given the complexity of the purchase process.) Unless the apartment has been your main residence since you bought it (at least two years before) or for five consecutive years out of the last 10 (Hauptwohnsitzbefreiung), you will have to pay a 30 percent real estate transfer tax (Immobilienertragssteuer or ImmoESt), but only on the capital gains of the transaction, i.e. the difference between the price you paid for the property and the price you receive in the sale (Veräußerungsgewinn).

Inheritance and Bestowal

If you want to bequeath your property to someone, either in the case of death or for another reason, you have several options. You can give (Schenkung) the property in Vienna as a gift to someone, which means the receiver does not have to do anything in return. Alternatively, the handing over (Übergabe) of a property often implies certain duties for the receiver, for instance providing you housing tenure or taking care of you when you’re old. Keep in mind that usually whoever inherits your property also inherits the mortgages or debts associated with it. While you do not have to pay inheritance tax or gift tax, the new owner pays for the entry in the land registry and taxes on the acquisition of property, between 0.5 percent and 3.5 percent, depending on the value of the property (Grunderwerbssteuer) [see Owning, Costs, p 174].

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