The two were among six people whose homes were raided by police in Suben in northwestern Austria on suspicion of breaking laws against glorifying the Nazis, reports said.
Local FPOe official Erwin Schreiner said that they were thrown out of the party and that they had been “keenly urged” to step down as councillors.
“In the FPÖ there is zero tolerance” for glorifying the Third Reich, Schreiner told the Austria Press Agency.
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The FPÖ was founded by former Nazis in the 1950s but in recent years has sought to clean up its image, with party leader saying it rejects all extremism.
But since its entry into government in December, the party has been embroiled in a string of incidents that critics say show it remains a hotbed of Nazi sympathisers and racists.
In January an FPÖ candidate in a state election quit after it emerged that his student fraternity had published a songbook with lyrics joking about the Holocaust.
They included the words “Step on the gas, old Germanics, we can make it to seven million”. The Nazis killed six million Jews during World War II.
Earlier this month two FPÖ local councillors in Tyrol state were suspended after they allegedly shared a photo of Hitler on WhatsApp, the mobile phone messaging application.
And just this week the foreign ministry recalled an employee in its embassy in Israel of all places after he reportedly posted a selfie in a T-shirt bearing the name of a Nazi tank division.
An FPÖ candidate in an upcoming local election is also under fire over the athletics club he chairs flying at a 2010 event a club flag from 1923 with the word “Rassenreinheit” (“racial purity”).
Israel's government has said it will not have direct contact with FPÖ ministers, a stance mirrored by Austria's Jewish community organisation the IKG.