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PROPERTY

Property buying rules for foreigners in Tyrol and Vorarlberg

While many countries have a north-south divide, Austria is often split between east and west, and it’s no different when it comes to property.

Property buying rules for foreigners in Tyrol and Vorarlberg
Property buying rules in Tyrol and Vorarlberg are stricter for foreigners than in other parts of Austria. (Photo by Stephan Seeber on Unsplash)

The west of Austria is home to the Alps and many famous ski resorts, making it a highly sought-after place to buy property – for both Austrians and foreigners.

But the popularity of this part of the country has led to skyrocketing prices and strict rules on who can and can’t buy property.

Thinking of investing in a home in Tyrol or Vorarlberg? Here’s what you need to know.

READ ALSO: EXPLAINED: The rules for buying property in Graz as a foreigner

Who is a foreigner in Austria?

Foreign nationals are defined by the Austrian Federal Government as people that do not have Austrian citizenship.

But when it comes to buying property, there are varying rules for different foreigners. This mostly depends on whether someone is from an EU country or not (rather than whether they have an Austrian passport).

Property buying rules for EU and EEA citizens in Austria

It can be easy for citizens from EU and EEA countries and Switzerland to buy property as a foreigner in Austria.

This is because these citizens are granted the same rights as Austrian nationals under EU law.

So this means whether you are an EU citizen already living in Tyrol or Vorarlberg as a resident, or you simply want to purchase an investment property in the Alps, then it is possible.

FOR MEMBERS: EXPLAINED: Property buying rules for international residents in Austria

Brits with an Article 50 card

For people with an Article 50 Card – a post-Brexit residency permit that grants Brits living in Austria before December 31st 2020 pre-Brexit rights – they are still treated the same as those from EU member states. 

But for any British people that have moved to Austria in post-Brexit times, they will be considered as third country nationals and subject to the rules detailed below. 

Nationwide property-buying rules for third country nationals

In Austria, the term ‘third country nationals’ refers to anyone who is not from an EU member state, an EEA (European Economic Area) country (Iceland, Liechtenstein and Norway) or Switzerland. 

For this group, it is usually more difficult to buy property in Austria – even for permanent residents – due to strict rules.

In principle, any permanent residents from a third country in Austria have to go through an authorisation process to gain a special permit that will allow them to buy property. 

The reason for the permit is to ensure there is sufficient housing available for Austrian citizens and to avoid surging property and land prices from interest by non-EU buyers.

But the rules for foreigners buying property in Austria are regulated by the Foreign Nationals’ Property Acquisition Act of each province, which is why they can vary across Austria.

READ MORE: Where to find property in Austria for under €100k

What is different in Tyrol and Vorarlberg?

In Tyrol and Vorarlberg, only EU, EEA and Swiss nationals are allowed to buy property as a foreigner. British people with an Article 50 card are also included in this group.

This means third country nationals are not allowed to purchase property in these states.

Innsbruck, one of Austria’s most beautiful – and expensive – cities. Photo: Photo: Wikicommons

Why are the rules different in the west of Austria?

In a bid to reign in the property markets in Tyrol and Vorarlberg, governments have introduced measures such as caps on the number of holiday homes in certain districts. Third country nationals are also prohibited from buying property.

However, this has led to some international residents being pushed out of the market, like a Serbian couple who were denied a permit to buy a house in Tyrol in 2021, despite living and working in the province for 20 years.

In Vorarlberg, there are also special laws in place to restrict where holiday apartments can and can’t be built to protect the local housing stock.

Likewise, a property in Vorarlberg can only be used as a holiday home within specially designated zones – a rule that applies to Austrian citizens and foreigners.

READ ALSO: ‘Concrete gold’: Austria ranks as Europe’s second most expensive property market

Other regional property buying rules and exceptions

While the west of Austria has strict rules when it comes to foreigners buying property, it is the opposite in some places in the east.

For example, in Vienna, the key difference is that if a married couple is buying property and one spouse is an Austrian citizen, they do not have to go through the authorisation process to get a special permit.

But for couples in Vienna where both partners are international residents, or non-EU individuals, the authorisation process still applies.

And in Graz, there is no requirement for foreigners to gain the special permit to buy property. This means, as long as someone is a permanent resident in Graz (and they have the funds), they can buy property – no matter where they are from.

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PROPERTY

Is now a good time to buy property in Austria?

With reports that demand for property is falling in Austria, could now be a good time to buy? We take a closer look at the data to find out.

Is now a good time to buy property in Austria?

Anyone planning to buy a home in Austria will be aware that prices and demand have been rising over the past couple of years. 

But Austrian broker association Remax is now saying that demand is falling with signs that “the market is starting to turn”.

In the first half of this year, 74,258 newly purchased properties were registered in the Austrian land register (Grundbuch). This is three percent less than during the same period in 2021, according to data from Remax.

FOR MEMBERS: IN FIGURES: Everything you need to know about who lives in Vienna

However, this figure is still 15.7 percent more than in the first half of 2019, which reflects the boom in the Austrian property market since 2020.

Also, despite the number of transactions going down this year, the value is actually up by 10.8 percent to €21.73 billion, which shows property prices are not yet coming down.

Bernhard Reikersdorfer, Managing Director of Remax Austria, said: “The growth was primarily supported by Vienna and Styria, but also by Upper and Lower Austria. 

“This means that real estate trading turnover has increased by a third in the first half of the year since 2019 and 2020, and more than doubled when compared to 2015 and before that.”

‘Inflation is driving up costs’

The Remax report says property market trends in Austria are being influenced by the Covid-19 pandemic, the war in Ukraine, inflation and the energy crisis. 

This has led to a change in prospects for some people, which is being seen as a drop in demand in the property market and a reduction of new construction projects on privately owned land.

READ ALSO: READER QUESTION: When should I turn on my heating in Austria this year?

Anton Nenning, Remax Austria expert, said: “Inflation is driving up the new construction costs – first through the material and now through the staff – and is now gnawing away at the equity capital saved for new acquisitions. 

“This means that many financing transactions that could be processed easily and cheaply a year ago are suddenly a case for selected experts who can still find a way even in tricky situations. For many, however, this simply means a project stop.”

As a result, the market for single family homes in Austria is heating up as they are sometimes cheaper than building a new property on private land. 

What is happening in Vienna?

Austria’s capital city remains the second best performing property region in Austria (behind Lower Austria). The value of all property sales in Vienna increased by one billion in the first six months of 2022, bringing the total to €6.68 billion.

Donaustadt is the best performing property market in Vienna with 1,903 properties sold, followed by Favoriten with 1,096. Donaustadt even overtook Graz and Kitzbühel to record the highest value in property sales.

The five largest real estate transactions in Austria also took place in Vienna during the first six months of the year. 

A plot of land (258,269 m²) in the 22nd district became the country’s most expensive property when it was sold for €86 million.

READ NEXT: Living in Austria: Is Vienna a family-friendly city?

What are the property trends outside of Vienna?

Vienna might be Austria’s capital city, but it doesn’t have the hottest property market in Austria right now. Instead, that title belongs to Salzburg and Styria.

Property sales in Styria are up by 9.2 percent and the overall transaction value has increased by 18.5 percent. In Salzburg, both sales and transaction values increased by 3.6 percent.

In the Alps though, the opposite is taking place with sales down by 10.7 percent in Vorarlberg and by 6.4 percent in Tyrol.

However, Tyrol is still recording some high prices (despite the overall decrease in sales) with the state’s most expensive property selling for €19.6 million in Kitzbühel earlier this year.

Lower Austria is currently the country’s best performing state for the number of sales, although the province recorded a decrease for the first time since 2013. 

The Remax report named Mödling as the most popular district for property in Lower Austria.

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