Buying property in Salzburg: steps and costs

The purchase contract for a flat or a property is usually negotiated in a few meetings. The real work lies before and after: in verifying who is buying and where the money comes from, and in the weeks between signature and registration, during which the purchase price is already on its way but the buyer is not yet the owner. Whoever leaves this period unsecured bears the full risk of the other side. In Salzburg, two further layers come on top, lying outside the contract and yet able to carry or capsize it: the federal taxes and fees, and the province's land transfer law. The following overview walks through the process in order.

Before the first draft comes the question of who is buying

The Austrian Lawyers' Act (RAO) expressly includes the purchase of real estate in the due diligence duties for the prevention of money laundering: covered is participation in transactions concerning the purchase or sale of real estate (§ 8a Abs. 1 Z 1 RAO). The lawyer drafting the contract must therefore establish and verify the identity of his client and that of the beneficial owner – for other transactions from a mandate value of 15,000 euros upwards, and thus in every flat purchase (§ 8b Abs. 1 RAO).

Consulting the register of beneficial owners is an appropriate measure but does not suffice on its own: the Beneficial Owners Register Act prohibits relying exclusively on the register (§ 11 WiEReG). Also to be established are the purpose and intended nature of the business relationship and, in the case of complex or unusual transactions, the origin of the funds (§ 8b Abs. 6 RAO). Anyone asked where their equity comes from should therefore take the question for what it is: a statutory duty of the contract drafter, not distrust.

For politically exposed persons a stricter regime applies: the mandate may only be established with the prior approval of a lawyer with management authority, the origin of funds is examined more intensively, and the business relationship is monitored more intensively (§ 8f RAO). This also covers family members and close associates, as well as those who held such an office within the last twelve months.

None of this is negotiable. If identification fails or the client wilfully refuses to cooperate, the mandate may not be established and the transaction may not be carried out; an existing business relationship must be terminated (§ 8b Abs. 7 RAO). Where money laundering is suspected, there is a duty to report to the Financial Intelligence Unit at the Federal Criminal Police Office, of which the client may not be informed; the transaction may not be carried out before the report is made (§ 8c RAO). Exempt remains what the lawyer learns in the course of legal advice or of representation before a court – unless the advice is discernibly sought for the purpose of money laundering.

Escrow answers the question of who performs first

No buyer pays before his ownership is secured; no seller hands over the registration documents before the money has arrived. Simultaneous exchange does not work where a land register registration is involved. The answer is the lawyer's escrow: the purchase price is deposited in a dedicated escrow account and paid out only once the buyer's registration is secured. How this works in detail is set out in the article Escrow handling in a property purchase: how it works; here, only the framework.

The statute requires a written escrow mandate, a consecutively numbered register and handling on the lawyer's own responsibility; guarantees as well as the granting of loans or credit by the lawyer are prohibited (§ 10a Abs. 1 RAO). If the escrow deposit exceeds 40,000 euros, the escrow must in any event be handled through an escrow facility operated by the bar association (§ 10a Abs. 2 RAO); exempt are, for instance, amounts from litigation, asset management or insolvency administration. In a flat or property purchase, handling through the escrow facility is therefore the rule, not the exception.

How the facility operates is governed by bar regulations, which the bar keeps up to date – currently the statute of the Electronic Escrow Register of the Salzburg Bar Association in the version of 1 January 2025. Under it, every escrow runs through a separate dedicated escrow account at a credit institution subject to state supervision. The lawyer may accept the deposit only after the bar has confirmed acceptance of the escrow. The core of the construction is the account disposition mandate signed by all escrow principals: it can be revoked only with the principals' written consent, and the bank may transfer funds exclusively to the recipients named in it and to the accounts listed there – the only further permitted dispositions are repayment to the depositors and deposit with the court. The bank thereby assumes control over dispositions; with electronically connected institutions, confirmation runs through the bar's secure data channel instead of on paper. After every booking, the credit institution sends the escrow principals an account statement directly. The escrow agent therefore could not dispose otherwise even if he wanted to.

It is controlled several times over. The Salzburg bar set up Austria's first escrow register in 1995 and has operated a joint system with the bars of Lower Austria and Upper Austria since 2017; its committee appoints audit officers from among practising lawyers, who carry out random checks without specific cause as well as checks prompted by specific occasions. Vis-à-vis the escrow facility, the lawyer is released from professional secrecy (§ 10a Abs. 4 RAO). To protect the escrow principals, the bar also takes out fidelity insurance (§ 23 Abs. 6 RAO); its scope is determined by the policy.

One court order, one official copy, one year

Between signature and registration lies the second weak point: the seller is still the registered owner and could sell or encumber the property a second time. The safeguard against this is the priority ranking notation for the intended sale under the Land Register Act (GBG): the owner applies for it at the land register court, and the rank in the register is thereby established as of the time of the application (§ 53 Abs. 1 GBG). Whoever is later registered in this rank takes precedence over everything registered in between.

The notation ceases to be effective on expiry of one year after it is granted; the court order names the calendar day on which the period ends (§ 55 GBG). Within this period, the application for registration must be filed together with the official copy of the order (§ 56 Abs. 1 GBG). Only one such copy exists – it is the actual instrument of security and therefore belongs in the hands of the escrow agent, not of a party. In addition, the priority ranking can also be noted in favour of a specific person; the copy then need not be presented for the registration (§ 57a Abs. 1 GBG).

The bank pays against rank, not against trust

Most purchases are financed by loan, which puts a third party at the table. The bank's mortgage does not come into existence with the credit agreement but only upon registration in the land register (§ 451 ABGB, Austrian Civil Code). Until then the bank has a mere claim – which is why it usually pays the loan out not to the buyer but to the escrow agent, against the agent's undertaking to procure the registration of the mortgage in the agreed rank. The basis for this is standardised: the General Terms for the escrow handling of real estate transactions, agreed between the Austrian Bar Association and the Bank and Insurance Division of the Austrian Economic Chamber; the Austrian Bar's professional conduct rules oblige the escrow agent to follow them (§ 43 Abs. 5 RL-BA 2015). Their core sentence: escrow funds may be released only if proper performance of the escrow mandate is ensured on the basis of the documents at hand.

What is registered is almost always a maximum-amount mortgage (§ 14 Abs. 2 GBG): it covers not only the principal but also future interest, charges and costs of legal enforcement, whose amount nobody can yet quantify today. In practice the maximum amount therefore exceeds the loan sum – and it, not the loan sum, is the basis of assessment for the land register registration fee under the Court Fees Act (§ 26 Abs. 5 GGG). The fee is 1.2 % (TP 9 lit. b Z 4 GGG); whoever has the priority ranking noted for the intended pledge and later registers the mortgage in that rank pays 0.6 % twice (TP 9 lit. b Z 5 und 6 GGG) – the same in total, but with a secured rank. Both the mortgage deed and the deletion declaration of the seller's previous bank require signatures certified by a court or notary (§ 31 Abs. 1 GBG); the discharge of existing encumbrances – part of the purchase price to the previous bank, the deletion declaration to the escrow agent – is therefore one of the payout conditions that must be set out in the escrow mandate.

On the consumer side, the Mortgage and Real Estate Credit Act (HIKrG) sets the framework: the bank must hand over the ESIS information sheet before the contract is concluded, its offer remains binding for at least seven days (§ 12 HIKrG), and the borrower may withdraw within two working days of his contractual declaration without giving reasons – the period starts only upon receipt of the information sheet together with the instruction and expires at the latest one month after conclusion of the contract (§ 13 HIKrG). Whoever repays early owes the bank at most 1 % of the amount repaid, in the final year of the term at most 0.5 % (§ 20 HIKrG).

The rigid lending limits of the KIM Regulation (KIM-V) – at most 90 % loan-to-value ratio, 40 % debt-service ratio, 35 years' term – expired at the end of 30 June 2025. They have not disappeared: the Financial Market Authority has since carried the same three figures forward in a circular as a supervisory expectation. Banks may deviate, but must justify this to the supervisor – anyone financing close to these limits should therefore have the financing commitment in hand before binding themselves in the purchase contract.

The buyer bears the real estate transfer tax – both owe it

The purchase triggers real estate transfer tax of 3.5 % under the Real Estate Transfer Tax Act (§ 7 Abs. 1 Z 3 GrEStG). The basis of assessment is the value of the consideration, at least the value of the property; the consideration includes, besides the purchase price, other obligations assumed by the buyer and benefits reserved to the seller (§ 5 Abs. 1 Z 1 GrEStG). Whoever takes over a seller's right of residence, for instance, increases the tax accordingly.

The contract usually states that the buyer bears the tax. But that governs only the internal relationship: the tax is owed by the persons involved in the acquisition, that is, buyer and seller as joint and several debtors (§ 9 Z 4 GrEStG). The tax office can pursue either of them.

Lawyers and notaries are authorised to self-assess the tax – an authorisation, not a duty, and the underlying deadline cannot be extended (§ 11 Abs. 1 GrEStG). Without self-assessment, the acquisition must be notified by the 15th day of the second month following the month in which the tax liability arose; with self-assessment, the return must be filed at the latest on the 15th day of the second month following the month of self-assessment, and that day is also the due date (§ 13 Abs. 1 und 3 GrEStG).

The party representatives (lawyer or notary) are liable for payment of the self-assessed tax (§ 13 Abs. 4 GrEStG). The tax amount is therefore deposited into the escrow account together with the purchase price and paid from there before anything flows to the seller – no careful contract drafter self-assesses a tax whose coverage he does not control.

The land register charges in percentages, not by effort

For registration of the ownership right, the court levies a land register registration fee of 1.1 % of the value of the right (TP 9 lit. b Z 1 GGG); in a financed purchase, the 1.2 % for the mortgage from the previous section comes on top. For a flat at 500,000 euros, that is 5,500 euros for the ownership registration alone.

Added to this is the filing fee for the land register application: since 1 August 2026, 61 euros, 24 euros more if not filed electronically (TP 9 lit. a GGG). The fixed amounts are adjusted by regulation whenever the consumer price index has changed by more than 5 %; the percentage rates remain unaffected (§ 31a GGG).

A noticeable exception applies within the family: in privileged acquisitions – among others between spouses and registered partners, cohabiting partners with a shared principal residence, relatives in the direct line, siblings, nieces and nephews – the registration fee is assessed on three times the standard assessed value, capped at 30 % of the value of the right to be registered (§ 26a GGG). In transfers within the family, this is regularly the largest cost difference.

For the real estate capital gains tax, the date of sale decides

The real estate capital gains tax (ImmoESt) falls on the seller but belongs in every purchase transaction, because the contract drafter calculates it as part of the process. The special tax rate under the Income Tax Act is 30 % (§ 30a Abs. 1 EStG); for "new assets", the income is the sale proceeds less the acquisition costs, increased by production and refurbishment expenditure and reduced by depreciation (§ 30 Abs. 3 EStG).

Estate agent's commission and contract drafting costs do not reduce the basis of assessment: expenses connected with the special tax rate are not deductible (§ 20 Abs. 2 EStG). Deductible are only the items named in the statute, among them the costs of the notification and self-assessment.

For "old assets" (grandfathered property) – land that was not subject to tax as at 31 March 2012 – a flat-rate scheme applies (§ 30 Abs. 4 EStG), and precisely there a deadline currently sits:

• For sales up to 31.12.2026, the acquisition costs are set at 86 % of the proceeds; 14 % are taxed, effectively 4.2 % of the sale proceeds. After a rezoning after 31.12.1987, flat-rate acquisition costs of 40 % apply, effectively 18 %.
• For sales after 31.12.2026, the flat rates fall to 80 % and 30 % respectively; effectively 4.2 % becomes 6 %, and 18 % becomes 21 % (§ 30 Abs. 4 EStG idF BGBl. I Nr. 62/2026, first applicable to sales after 31 December 2026).

With proceeds of 500,000 euros, that amounts in the standard old-assets case to 21,000 euros as against 30,000 euros. What matters is the time of the sale – anyone disposing of old assets should know the date; the statute says no more than that. For rezonings after 31.12.2024, a surcharge of 30 % on the positive income applies in addition, capped at the sale proceeds (§ 30 Abs. 6a EStG).

The most important exemption is the principal residence: the sale remains tax-free if the seller had his principal residence there continuously for at least two years from acquisition or completion, or continuously for at least five years within the last ten years, and gives it up (§ 30 Abs. 2 Z 1 EStG). The statute exempts the flat or home "including land and soil"; administrative practice limits the exempted land to 1,000 m², and the Supreme Administrative Court has confirmed this limit as lawful (VwGH 24.4.2024, Ro 2022/15/0020) – it does not appear in the statutory wording, but it is settled practice; the portion of land beyond it is taxable. For self-constructed buildings there is the builder's exemption (§ 30 Abs. 2 Z 2 EStG); on settled interpretation, only the building is exempt, not the land.

The tax is handled through the party representative: whoever self-assesses the real estate transfer tax must at the same time self-assess the real estate capital gains tax and notify the tax office (§ 30c Abs. 2 EStG); self-assessment may be omitted where, for instance, the income is exempt or the proceeds are expected to be received later than one year on – the reason must then be stated in the notification (§ 30c Abs. 4 EStG). The tax is due on the 15th day of the second month following the calendar month in which the proceeds are received (§ 30b Abs. 1 EStG); it is thus tied to the flow of funds, not, like the real estate transfer tax, to the month of self-assessment.

The party representative pays into the seller's tax account and is liable for payment; for the correctness of the calculation he is liable only if he calculates against better knowledge on the basis of the taxpayer's information (§ 30c Abs. 3 EStG). In practice this means: the seller must supply the underlying facts – acquisition, rezoning, principal-residence periods – completely and correctly, because the calculation is built on them.

Salzburg's land transfer law does not apply everywhere, but where it does, strictly

Since 1 March 2023, the Salzburg Land Transfer Act 2023 (S.GVG 2023) has been in force, most recently amended with effect from 1 September 2025; the Land Transfer Act 2001 is no longer in force. Many contract templates and guides still refer to the old statute – one reason not to adopt land transfer clauses unchecked.

The most widespread misconception concerns the scope of application. The acquisition of rights in building plots by legal transaction is subject to the restrictions only in secondary-residence restricted municipalities and areas (§ 11 Abs. 1 S.GVG 2023). A restricted municipality is one in which the share of dwellings not used as a principal residence exceeds 16 % of the housing stock; the provincial government determines this every five years and designates the municipalities by regulation, restricted areas are marked in the zoning plan under the Salzburg Spatial Planning Act 2009 (§ 31 Abs. 1 ROG 2009). Whether a specific plot is covered can therefore be answered for every municipality – and must be answered before the contract is finalised.

In the municipalities covered, the acquisition must be notified to the Land Transfer Commissioner; exempt are, among others, acquisitions within the family and car parking spaces (§ 14 S.GVG 2023). The acquirer declares in the notification that the object of purchase will be used by the acquirer or by another person as a principal residence or permanent residence and that this use will be taken up and maintained within the time limits; these are one year for built-on plots, five years in the case of comprehensive refurbishment and seven years for undeveloped plots, extendable on application to up to ten years (§ 16 S.GVG 2023).

Outside the restricted municipalities, a self-declaration in the contract suffices, stating that the building plot is not situated in such a municipality or area or that an exemption applies (§ 14 Abs. 4 S.GVG 2023). The Land Transfer Commissioner has two weeks from receipt of the notification (§ 19 S.GVG 2023) – a calculable quantity that belongs in the timetable of the transaction.

Province-wide – independently of restricted municipalities – the rules on acquisition by foreigners apply. Foreigners include, among others, natural persons without Austrian citizenship and legal entities with their seat abroad or with predominantly foreign capital (§ 21 Abs. 1 S.GVG 2023). The restrictions do not apply insofar as the acquisition takes place in exercise of the free movement of workers, the freedom of establishment or of services, the right of residence or the free movement of capital under Union law or the EEA Agreement; the acquirer must declare this (§ 22 Abs. 1 und 3 S.GVG 2023).

Swiss nationals are not expressly placed on an equal footing by the statute. It contains only an opening for other favourable obligations under international treaties, on which the land transfer authority issues a certificate on application – a case-by-case examination, not automatic equal treatment. Whoever is not placed on an equal footing needs official approval for the acquisition (§ 24 S.GVG 2023); if the acquisition serves to establish a professionally necessary principal residence, notification suffices (§ 28 S.GVG 2023).

Enforcement sits at the most sensitive point: rights in land may be registered in the land register only if the application is accompanied by the final administrative decision, the decision of the administrative court or one of the relevant certificates, confirmations or declarations (§ 50 Abs. 1 S.GVG 2023). As long as that is missing, the transaction may not be carried out – but the parties remain bound by it (§ 51 S.GVG 2023). The contract then hangs in suspense, and neither side can escape unilaterally.

If approval is refused, the declaration is denied, or a period of grace set by administrative decision for a missing notification or declaration is allowed to lapse unused, the transaction becomes retroactively ineffective; the seller acting in good faith may then refuse the unwinding, and in the event of justified refusal there is a judicial auction for the account of the acquirer (§ 52 S.GVG 2023). Added to this are administrative penalties: 500 to 50,000 euros for intent, up to 10,000 euros for negligence, with incorrect or incomplete statements to the authority also covered and the limitation period starting only when the authority obtains knowledge (§ 63 S.GVG 2023). An embellished declaration is therefore not an offence that resolves itself with the passage of time.

Secondary residence and tourist letting are settled before the purchase

The land transfer use declaration is only one side; the other is spatial planning law. In restricted municipalities and areas, the use of a dwelling as a secondary residence is permitted only in designated secondary-residence zones; exempt are, among others, dwellings approved as secondary residences under building law and uses that already existed before 1.3.1993 (§ 31 Abs. 2 ROG 2009).

Tourist letting, too, is not a mere matter of wanting to: using an existing dwelling for tourist accommodation is, as a change of designated use, permitted only with a building authority permit, limited to at most ten years; exemptions apply, among others, to secondary-residence zones and to uses already existing before 1.1.2018 (§ 31b ROG 2009).

The sanctions are real: in the case of unlawful secondary-residence use, the municipality may determine the impermissibility by administrative decision and set a period of one year for ending the use or selling; if this is not complied with, the provincial government may pursue a forced sale, and fines of up to 50,000 euros may be imposed alongside (§ 78 ROG 2009). Whoever buys a flat in the mountains as a holiday home or investment must therefore have clarified the permissibility of the intended use before signing – afterwards, the buyer is bound by the contract, whatever the authority says about the use.

What must be settled before signing

The common thread through all sections: almost every problem that becomes expensive after signature was a simple question beforehand. In practice this means:

• Identity, beneficial owner and – where necessary – origin of funds are documented; the records are available before the contract is drafted.
• Is the plot situated in a secondary-residence restricted municipality or a restricted area? The regulation and the zoning plan provide the answer.
• Can the buyer make the use declaration under § 16 S.GVG 2023 – and meet the time limits for taking up residential use?
• For foreign buyers: does a freedom under Union law apply, is a certificate needed, or the authority's approval?
• Is the intended use – principal residence, secondary residence, tourist letting – permissible under spatial planning law?
• On the seller's side: old or new assets, applicable exemptions, and does the sale fall before or after 31.12.2026?
• The creditors' deletion declarations for registered mortgages are recorded as a payout condition of the escrow.
• The bank's financing commitment is in place; the maximum amount and rank of the mortgage are aligned with the escrow agreement.
• For condominium flats: the condominium agreement, the current charges, the state of the reserve fund and the resolutions of the recent owners' meetings are available – a refurbishment already resolved upon is the most frequently overlooked cost block.
• Escrow handling through the Escrow Register including the account disposition mandate is agreed; real estate transfer tax, real estate capital gains tax and the land register registration fee are factored into the deposit.
• The priority ranking is noted, the single official copy is with the escrow agent, and the one-year deadline is in the deadline calendar.

Whoever has worked through these points before signing experiences no surprises between contract and registration. That is exactly the standard by which the handling of a purchase can be measured.