The move is the latest in efforts by the government to ensure that the house does not become a shrine for Hitler's admirers.
Municipal officials in Braunau, where the house is located, already complain that it draws neo-Nazi visitors to the town.
Interior Ministry spokesman Karl-Heinz Grundböck said on Wednesday that his ministry expects expert opinions by the end of the month on expropriation and other legal options - which he stressed would be a “last resort”.
He said that won't be necessary if the owner - a woman whom authorities have refused to identify - accepts a government offer to buy it and agrees to a fair price, as the house is in need of some renovation.
She reportedly has turned down past offers, however.
The Interior Ministry has been the main tenant of the building since 1972, subletting it to various charitable organisations. But the building has stood empty since a workshop for the mentally disabled moved out more than three years ago.
The approximately 800 square metre property currently costs €4,800 a month. The tenancy agreement states that it may not be used as a museum, or in any historical context, and that the owner must consent to any new tenant.
The most recent suggestion was that it could be used as an adult education centre, but the owner rejected this plan, reportedly because of the renovations the house would need.