Real estate income tax on old assets rises from 2027

Owners who sell a property they have held for decades usually pay Austrian real estate income tax (Immobilienertragsteuer, ImmoESt) on a flat-rate basis. The Budget Accompanying Act 2027–2028 reduces that flat-rate allowance for disposals after 31 December 2026. A larger share of the proceeds is taxed as a result. Anyone planning a sale in any event should know the cut-off date and what determines it.

What counts as old assets

Since 2012 real estate income tax has also covered private disposals of property. The special tax rate is 30 percent of the income (§ 30a Abs. 1 EStG). For new assets, the income is the sale proceeds less the actual acquisition costs (§ 30 Abs. 3 EStG). For property that was no longer within the speculation period on 31 March 2012 — old assets — a flat-rate method applies instead (§ 30 Abs. 4 EStG): the acquisition costs are not worked out from the actual figures but assumed at a fixed percentage of the sale proceeds.

A property was no longer within the speculation period if the ten-year period applicable at the time had already expired on 31 March 2012 — as a rule, if it was acquired before 1 April 2002. Where a property was inherited or received as a gift, the acquisition date of the previous owner carries over (§ 30 Abs. 1 EStG). A house passed down from parents who bought it in the 1980s is therefore an old asset.

Which rates apply before and after the end of 2026

For disposals up to 31 December 2026 the current rates apply:

• As a rule, 86 percent of the proceeds count as acquisition costs. The remaining 14 percent are taxed at 30 percent — an effective 4.2 percent of the sale proceeds.
• If the property was rezoned after 31 December 1987, the deemed acquisition costs are 40 percent. 60 percent of the proceeds are taxed — an effective 18 percent.

For disposals after 31 December 2026 the deemed acquisition costs fall to 80 percent, and to 30 percent after a rezoning (§ 30 Abs. 4 EStG as amended by the Budget Accompanying Act 2027–2028):

• In the standard case, 20 percent of the proceeds are then taxed — an effective 6 percent.
• After a rezoning it is 70 percent — an effective 21 percent.

With proceeds of 400,000 euros, the tax in the standard case rises from 16,800 to 24,000 euros, and for rezoned building land from 72,000 to 84,000 euros.

Under § 30 Abs. 4 Z 1 EStG, a rezoning is a change of zoning after the last acquisition for consideration which, for the first time, allows development of the kind that a building-land designation permits. The rule also covers a rezoning within five years after the disposal where it is economically connected with the sale, and an increase in the purchase price because of a later rezoning. Both are treated as events with retroactive effect and must be reported to the tax office.

The rates of 18 and 21 percent apply only to rezonings up to the end of 2024. Where the property was rezoned after 31 December 2024, the rezoning surcharge under § 30 Abs. 6a EStG is added: the income is increased by 30 percent, capped at the amount of the proceeds. The effective charge is then 23.4 percent of the proceeds, and 27.3 percent from 2027.

What matters is the purchase contract, not the handover

The new rates apply to disposals after 31 December 2026. Under case law and administrative practice, the disposal takes place when the contract creating the obligation is concluded — that is, the purchase contract. Handover, payment of the price and registration in the land register do not matter here. A purchase contract still signed in December 2026 therefore falls under the current rates, even if the handling of the transaction runs into the new year. The same applies where the contract still requires approval from the land transfer authority, provided that approval is to be expected in the circumstances.

The option under § 30 Abs. 5 EStG is unchanged: on application, the income is determined from the actual acquisition costs instead of the flat rate. Sellers who can document high acquisition, construction or refurbishment costs may end up paying less that way. From 2027, that calculation will be worth doing more often.

A gift before the cut-off date does not preserve the old rate

A transfer to children or other close relatives without consideration does not trigger real estate income tax. The recipient inherits only the old-asset status, however, not the rate of tax: if they sell later, the flat rate in force when they sign their own purchase contract applies. Anyone who wants the benefit of the current rates has to make the sale themselves, before the end of 2026.

Where the recipient assumes liabilities or makes an equalisation payment to siblings, administrative practice treats the transfer as a disposal once the consideration reaches at least 75 percent of the market value. Up to 25 percent, it is a gift; between the two, a gift is generally assumed among close relatives. A retained right of residence or usufruct does not count as consideration, whereas an assumed loan does. Where the transfer is a disposal, the flat rate is applied to the consideration — from 2027 at 6 instead of 4.2 percent.

The exemptions remain unchanged

The Budget Accompanying Act changes only the flat rate. The main-residence exemption and the self-builder exemption (§ 30 Abs. 2 EStG) continue to apply unchanged. Where the house or flat has served as the seller's main residence continuously for at least two years since acquisition, or for at least five years within the last ten, and that main residence is given up, there is still no real estate income tax. For a building the owner constructed themselves, the self-builder exemption applies to the extent that the building has not been used to generate income in the last ten years. It covers only the building, though: the land itself remains subject to the flat rate, from 2027 at the new rates.

What to do now

Sellers who intend to dispose of old assets in any event should look at the timing. A purchase contract needs lead time: the buyer's financing, escrow handling and, where applicable, land transfer clearance and the priority ranking. Our article Buying property in Salzburg: steps and costs sets out how a property purchase in Salzburg proceeds and what ancillary costs arise.

The tax is one factor among several. Price, market conditions and your own plans for the property are often more important than the difference between 4.2 and 6 percent. The calculation in the individual case, and the self-assessment by the party representative under § 30c EStG, should be settled in consultation with your tax adviser. We draw up the contract and align the handling and the escrow with the date you choose.