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Cost of living For Members

KEY POINTS: How Austria's new cost of living measures will affect you

Aaron Burnett
Aaron Burnett - [email protected]
KEY POINTS: How Austria's new cost of living measures will affect you
The KlimaTicket for all public transport around Austria, can be bought digitally later in November. Image by Andi Graf from Pixabay

Austria's government has prepared a package of measures to slow down the rising cost of living. The most prominent of these is a three-year rent brake to start in 2024. What else is in the package and how does it work?

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I rent in Austria. Will my apartment fall under the rent brake?

Probably.

The ÖVP-Green coalition government’s proposed brake covers any dwelling built before 1953. It also applies to subsidised and social housing, no matter when it was built.

Taken together, the government expects that about 1.2 million rental contracts in Austria will be covered by the rent brake – or 75 percent of all leases.

If you live in a privately financed place built after 1953 – so a newer building that was built without any public funds – the brake won’t apply to you to start.

The government is said to be looking at ways to extend the measure to the other 25 percent of Austrian leases.

For the most part though, the nationwide rent brake will come into effect in 2024 and last for three years, capping rent increases at a maximum of five percent per year, as opposed to the 15 percent originally forecast.

Rents in Austria rose about 7.8 percent between July 2022 and July 2023.

READ ALSO: Austria to introduce nationwide rent brake

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What about fees for public services? Are those going up?

Some transport-related services aren’t, but many others aren’t in the federal government’s control.

In a press conference Wednesday, Chancellor Karl Nehammer (of the Austrian People's Party or ÖVP) confirmed that prices for the Autobahnvignette – an authorisation to drive on Autobahn highways that sells for about €96.40 per year – and the €1,095 annual KlimaTicket, won’t increase in 2024.

He also encourages local governments in Austria not to raise their service fees – for example for things like water. However, many of these decisions are up to local governments in Austria.

READ ALSO: EXPLAINED: How does Austria’s KlimaTicket work?

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Am I going to see more savings on my energy costs?

The government is planning measures – possibly through tweaks in Austrian competition law – to limit or lower energy and fuel prices.

Petrol prices in Austria will be going up next year, but they're still lower than in most European countries right now. Image by IADE-Michoko from Pixabay

The governing coalition says energy companies are keeping too many profits. Energy prices and overall inflation have recently come down, but companies aren’t passing on enough of the savings to consumers.

The government points to random profits from price spikes – some of which have been 20 percent about the level of average energy profits over the course of the last few years. The coalition seeks to limit this to 10 percent.

READ ALSO: How fuel prices in Austria are expected to rise next year?

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Are there more ideas on the table?

Yes. But those – at least at this point – mostly come from opposition parties in parliament.

The Social Democrats (SPÖ) originally called for a complete freeze on rents to last three years, rather than the five percent annual increase the government’s law will allow – and for VAT on groceries to be suspended.

The Freedom Party (FPÖ), meanwhile, calls for abolishing capitals gains tax on savings interest and to cap interest rates.

Are the already announced payments still coming?

Yes. The government’s recently announced initiatives – like the rent brake – come in addition to the support that’s already been announced.

This support includes the 2023 KlimaBonus, amounting to several hundred euros depending on where you live.

READ ALSO: When will people in Austria receive autumn cost of living payouts?

The next step is for the latest package of measures to be voted on in Austrian parliament.

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