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The hidden costs of buying a home in Austria

Are you currently buying a home in Austria or thinking about it? Here are some of the hidden costs you may face.

The hidden costs of buying a home in Austria
Photo by Jonas Denil on Unsplash

Austria is not cheap at the best of times – and this is particularly the case when it comes to buying property. 

But even when you’ve got together enough of a deposit to buy a home, plenty are caught out by the hidden costs associated with buying a home. 

From agent fees to all the additional taxes, here’s what you need to know. 

Buying a home

In Austria, first-time home buyers are often caught out by what are known as Nebenkosten (additional costs). 

While in some countries real estate agents and sellers will need to list the full price of a house including relevant fees and taxes, in Austria this is not the case. 

READ MORE: The parts of Austria where housing costs have skyrocketed during the pandemic

From agent fees to various types of taxes and duties, anyone wanting to buy a house will need to be aware of these additional costs lest they get a possibly hefty surprise when presented with the bill. 

How much are these additional costs on average? 

The total of your Nebenkosten will vary, but according to Austrian newspaper Der Standard they should be roughly ten percent of the total purchase price. 

What are some common additional costs (and how much are they)? 

Nebenkosten are primarily administrative costs and fees similar to stamp duties that are paid in other countries. 

They include the real estate transfer tax (3.5 percent of purchase price), fee for entering the property into the land register (1.1 percent of purchase price), entering the mortgage into the register (1.2 percent of purchase price) and preparation of purchase contract fees (between one and three percent of purchase price). 

When entering the property into the land register, you will also need to have all signatures notarised – which of course costs money. 

In addition, you may face credit financing fees, which include one-off payments for valuation fees, credit residual debt insurance or account management fees. 

New properties will attract Value Added Tax (VAT), but only if you plan to live in the house rather than rent it out. 

Brokerage or agency fees

Finally, brokerage or agent fees will also bump up the price. 

The exact amount of your brokerage or agent fees will vary – and in fact would be worthy of an article themselves – depending on the purchase price. 

Generally speaking, it will be three percent of the purchase price. The person selling the house may also need to pay a commission of up to three percent of the price, meaning the agent makes off with a relatively tidy six percent. 

You’ll also need to pay 20 percent statutory sales tax on the broker’s commission. 

Experts and notary fees

Buying a home is the most substantial investment that most of us will make – which means you want to make sure everything is above board. 

READ MORE: What will happen to Austria’s property market in 2021?

Therefore, while this is not a must, using a notary and an expert to inspect the building and the apartment is essential. 

A notary ensures that all of your paperwork is done properly and all relevant taxes are paid. The cost of this varies, but Austrian real estate company Immobilien Scout recommends you negotiate a flat fee rather than one based on a percentage. 

An expert is there to ‘kick the tyres’ on the place and make sure you’re not buying a lemon. An expert will also be able to give you an indication as to how much repair or maintenance is likely to cost. 

Immobilien Scout estimates this will cost €500. 

The hidden costs of buying a home in Austria are relatively similar (as a percentage) in the city and in the mountains. Photo by Jara from Pexels

Is that all? 

No. There are also a range of costs related to the new property, most of which will need to be paid immediately upon taking over ownership. 

This includes electricity, gas, heating, cleaning, garbage disposal, sewage, property management/body corporate fees, insurance and water. 

While if you are buying a stand-alone house you’ll have to cover all of these costs, in an apartment these are typically shared with all other apartment owners in the building. 

And although in this case sharing the costs will bring the overall financial hit down, keep in mind that you will also be liable for chipping in for things like maintenance. 

As noted by Der Standard, new windows or repairing a lift can be expensive and will need to be covered by property owners rather than tenants. 

But is it all worth it? 

The high cost of housing in Austria is a consequence of the attractiveness of the market. 

Austria, with its high quality of life and good employment prospects, is an attractive destination – which of course means there is extra competition when it comes to buying a place. 

Property is seen as a good investment due to Austria’s stability and liveability. 

Even for non-investors, despite strong rental laws which protect tenants, the rising cost of housing in Austria also means buying a place to live can make financial sense. 

Please note: As with all of the guides and explainers which appear on The Local, please remember that this is intended as a guide only and does not constitute official financial advice. 

Buying a home in Austria

Before you pull out your chequebook, the first question you want to ask yourself is whether or not buying a place is the right decision for you. 

While the decision on buying or renting will come down to your personal circumstances – and probably how much money you have in the bank – as we wrote in our renting versus buying guide, rents may have risen by around 42 percent across Austria over the past decade, the purchase prices of apartments has risen by an estimated 76 percent over the same period of time.

READ MORE: Is it better to buy or to rent property in Austria?

So if you expect to be around in Austria for a fair while, it might be worth looking into buying a place. 

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LIVING IN AUSTRIA

What is Austria’s Mutter-Kind-Pass and how is it changing?

The Mutter-Kind-Pass is hitting the headlines as the Austrian Federal Government plans a reform of the scheme. Here's how it works now, why it is necessary and how it will change in the future.

What is Austria’s Mutter-Kind-Pass and how is it changing?

The Mutter-Kind-Pass (Mother-Child-Pass) was launched in Austria in 1974 to ensure the health and wellbeing of pregnant women and their babies.

It grants pregnant women free access to essential examinations and consultations, and serves as a record of healthcare.

But big changes are on the cards for the pass as a digitization reform is planned for the coming years, while disputes continue about the cost of the scheme.

Here’s what you need to know about how the Mutter-Kind-Pass works, why it’s necessary and how it will change. 

FOR MEMBERS: What are the rules about turning on the heating in the workplace in Austria?

What is the Mutter-Kind-Pass?

The Mutter-Kind-Pass is a small, yellow passport-style document to provide and track healthcare for pregnant women and young children in Austria.

It is issued to a woman when a pregnancy is confirmed by a doctor and contains records of medical examinations during pregnancy. As well as health check-ups for the child up to five years of age.

The Mutter-Kind-Pass exists to ensure pregnant women and children get the necessary medical care they need.

For example, women in Austria are entitled to five medical check-ups throughout their pregnancy including blood tests, internal examinations, ultrasound scans and consultations with a midwife.

READ ALSO: Reader question: Am I liable for ambulance costs in Austria?

Who can get the Mutter-Kind-Pass and how much does it cost?

Any pregnant woman living in Austria can get the Mutter-Kind-Pass (and subsequent health examinations) for free.

However, all examinations must take place with a doctor that is registered with a health insurance company in Austria.

Women without health insurance need a confirmation of entitlement from the Austrian health insurance fund that is responsible for the area where they live.

This is a required step before any examinations can take place free of charge.

Why is the pass necessary?

The Mutter-Kind-Pass and its mandatory examinations are primarily used to detect any illnesses or possible complications early. 

The expected date of delivery is also entered into the Mutter-Kind-Pass, so the document is needed to receive maternity pay in Austria.

Additionally, proof of examinations are required to receive the full entitlement to childcare allowance (Kinderbetreuungsgeld). This means the pass should be taken to every maternity-related appointment, as recommended by the Österreichische Gesundheitskasse.

How is the Mutter-Kind-Pass being reformed?

On Wednesday 16th November, Minister for Women and Family Affairs Susanne Raab (ÖVP) and Minister of Health Johannes Rauch (Greens) announced a reform of the Mutter-Kind-Pass.

The most notable change will be a transition from the paper booklet to a digital app in 2024, as well as new services and a name change to the Eltern-Kind-Pass (Parent-Child-Pass).

Raab said: “In addition to the services in the area of ​​health care, we will introduce parent advice, which should be a compass for the new phase of life for new parents.”

The new services will include counselling, an extra consultation with a midwife, an additional ultrasound, hearing screenings for newborns, nutritional and health advice, and multilingual information in digital form.

Photo by Juliane Liebermann on Unsplash

In the future, parents-to-be and new parents will also be offered parenting advice when they have their first child, for example on the compatibility of employment and childcare, on the division of parental leave or on the effects of part-time work on pensions.

“The mother-child pass has been an essential part of maternal and child health in Austria for decades. Now we have managed together to further develop this important instrument in a contemporary form”, said Rauch.

READ NEXT: EXPLAINED: What you need to know about parental leave in Austria

The implementation of the parent-child passport is a comprehensive, multi-year project and will begin with digitisation from next year.

The annual budget for the Mutter-Kind-Pass is currently €62 million and an additional €10 million from EU funds has been allocated to cover the cost of the reforms. 

However, there have been debates in recent months about the general cost of the pass. 

As a result there are ongoing negotiations between insurance companies and the Medical Association about the reimbursement of fees for providing healthcare and examinations.

READ ALSO: ‘Better and cheaper’: What foreigners really think about childcare in Austria

Der Standard reports that the Medical Association is threatening to discontinue the Mutter-Kind-Pass at the end of the year if an agreement on doctors fees cannot be reached. If that were to happen, expectant mothers would have to pay for examinations.

Currently, doctors receive €18.02 per examination and the Association is calling for an 80 percent increase.

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