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Austrian government announces €250 million housing aid package

The Local Austria
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Austrian government announces €250 million housing aid package
Vienna remains a popular place for foreigners, including retirees, to settle. (Photo by Andy Wang on Unsplash)

Instead of capping rents, the federal coalition in Austria has decided to earmark €250 million for housing aid aimed at lower-income households as prices continue rising in the country

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Austrian authorities had debated a rent brake - a limit to rental prices - for months but decided to replace it with a one-off payment after coalition partners could not agree to details. 

Instead of limiting rental increases, the centre-right ÖVP and left-leaning Greens announced a €250 million housing aid boost for Austrian households. The agreement came just before benchmark rents (rents in older buildings which are government-regulated and based on inflation rate) are set for a hike.

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Social Minister Johannes Rauch (Greens) and ÖVP club leader August Wöginger presented the new plan on Wednesday, Austrian media reported.

READ ALSO: ANALYSIS: Can Austria’s government get inflation under control?

The housing allowance is a one-time payment that Rauch said must be actively applied for. Wöginger said that households who qualify it will receive around €200 on average; and said that about one million households on lower income would be able to use it. 

The income limits for those eligible are set by the federal states, which also pay out housing cost subsidies.

Rauch stressed that it was important for the states to use the money to provide targeted support for low-income households and defended the agreement against critics, saying: "This is money that works."

ÖVP club leader Wöginger called the current solution "more socially just and more targeted" than the rent brake some parties, including the Greens, initially demanded.

Criticism of the new plan

"We don't need compromises, but solutions that provide sustainable relief," said the Executive Secretary Ingrid Reischl of the Austrian Federation of Trade Unions (ÖGB). "No matter how these housing cost subsidies are designed - what is needed is not charity policy, but a full rent freeze," she said in a press statement.

READ ALSO: Renting in Austria: When can my landlord increase the rent, and by how much?

The Vienna Greens called the current compromise the "second-best solution". They said it was positive that tenants would be supported in "coping with high inflation. However, a rent brake would be the more intelligent instrument." 

Vienna FPÖ party leader Dominik Nepp criticised the negotiations. The proposals of the ÖVP and the Greens "are once again only about pretending to help with one-off payments; they do not bring sustainable and real relief", the far-right leader said.

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