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EXPLAINED: How Austria's new property buying rules could impact you

Hayley Maguire
Hayley Maguire - [email protected]
EXPLAINED: How Austria's new property buying rules could impact you
Subletting is technically legal in Austria but a landlord has the final say on whether they will allow it or not. (Photo by Waldemar Brandt / Pexels)

Anyone buying property in Austria will now need a minimum deposit of 20 percent. Why has this new rule been introduced and how could it impact people trying to get on the property ladder?


From August 2022, anyone applying for a mortgage in Austria is subject to new rules related to equity and terms and conditions for loans.

The aim is to take some heat out of the property market in Austria, especially after both the Austrian National Bank (OeNB) and the European Council for Systemic Risks recently issued warnings that lending criteria was too lax, according to a report by ORF.


But for some, it will now mean home ownership will become an ever more distant dream as property prices, interest rates and the cost of living continue to rise.

Here's what you need to know.

READ MORE: EXPLAINED: Why Austria’s rising property prices are causing alarm

What has changed?

The biggest change to house buying rules in Austria is that there is now a mandatory deposit of 20 percent of the value of a property, including additional costs. Previously, banks were simply issued with recommendations about a minimum deposit.

As a result, the OeNB expects a "dampening effect" on the number of home loans being granted in Austria, followed by a drop in property prices in the coming years.

However, in an interview with Der Standard, Willibald Cernko, the new head of Erste Group, called for exceptions for young families who are particularly impacted by the new lending criteria.


Cernko said: "There may be good reasons for the new regulations, but in my view they pay too little attention to young people and those on low incomes. 

"Where are young families supposed to get 20 percent of their own capital, even if both work, unless mum and dad or grandma and grandpa step in?"

FOR MEMBERS: Property buying rules for international residents in Vienna

Another change to the property buying rules in Austria is that mortgage repayments must not exceed more than 40 percent of a buyer's income.


According to calculations by ORF, this means someone hoping to buy a home for €360,000 (an amount which rarely exists in some regions due to high prices) would need a net income of €3,250 per month to qualify for a mortgage. It is estimated that half of all Austrian households would not qualify.

Additionally, mortgages can only be granted for a maximum of 35 years and loans must not exceed 90 percent of the calculated market value of a property.

READ ALSO: How to keep your apartment cool in Austria this summer amid rising energy prices

Are there any exceptions?

Yes, loans of up to €50,000 will not be impacted by the new rules, which is good news for those seeking finance options for renovation works in their homes, for example.




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