Reader question: What taxes do I need to pay if I sell my home in Austria?
Selling a home in Austria comes with different applicable tax rates – depending on everything from when it was purchased to what the main purpose was for its use.
If you’re selling your Austrian property – whether to leave the country or to take up residence somewhere else in the Alpine republic, you may end up having to pay some capital gains tax, particularly if the property you’re selling was a second home.
However, if you lived in Austria for a while – you may be off the hook. The first step is to figure out whether you’re exempt or not.
READ ALSO: Can foreigners buy a second home in Austria?
Who is exempt from capital gains tax on Austrian property?
There’s a decent chance that if the home you’re selling was your main residence – and registered as so – you might be off the hook for Austrian capital gains tax.
To qualify as your main residence, it has to be the ‘focal point of your personal life’ – somewhere you’re spending at least six months of your calendar year at.
Normally, a place that’s registered as your main residence is exempt from capital gains tax when you sell it – provided you have lived there continuously for at least two years leading up to the sale.
Alternatively, you’ll also qualify for an exemption if you used the property as your main residence for at least five out of the previous 10 years just before the sale. This is often called ‘the five out of 10 rule’.
So, in many cases – although not all – selling your primary residence in Austria will often be tax-exempt.
READ ALSO: Can owners of second homes in Austria get residence permits?
What do I have to pay capital gains tax?
If you didn’t live in your main residence long enough before selling, or you’re selling a second home, you’ll need to pay capital gains tax. How much you need to pay though, depends on whether you bought the place recently – or a long time ago.
You’ll have to pay this tax regardless of whether you’re an official resident of Austria or not.
In most cases, it will be a flat rate of 30 percent of the gain – so the difference between what you bought it for and what you sold it for. However, you can deduct the costs of any improvements or renovations from the gain to reduce your tax burden.
If you lose money, you can also file a tax return to claim tax credits for this.
There are some exceptions to this 30 percent rule though – but only if you’ve owned your place for around 25 years. Anyone who bought their place before 31st March, 2002 will be taxed only 4.2 percent of their capital gain.
The exception to this is if they reclassified the home under planning laws sometime after 1987. Even here though, the seller will pay 18 percent rather than 30 percent. If in doubt, try asking a tax advisor for clarification.
READ ALSO: Does Austria tax unoccupied homes?
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If you’re selling your Austrian property – whether to leave the country or to take up residence somewhere else in the Alpine republic, you may end up having to pay some capital gains tax, particularly if the property you’re selling was a second home.
However, if you lived in Austria for a while – you may be off the hook. The first step is to figure out whether you’re exempt or not.
READ ALSO: Can foreigners buy a second home in Austria?
Who is exempt from capital gains tax on Austrian property?
There’s a decent chance that if the home you’re selling was your main residence – and registered as so – you might be off the hook for Austrian capital gains tax.
To qualify as your main residence, it has to be the ‘focal point of your personal life’ – somewhere you’re spending at least six months of your calendar year at.
Normally, a place that’s registered as your main residence is exempt from capital gains tax when you sell it – provided you have lived there continuously for at least two years leading up to the sale.
Alternatively, you’ll also qualify for an exemption if you used the property as your main residence for at least five out of the previous 10 years just before the sale. This is often called ‘the five out of 10 rule’.
So, in many cases – although not all – selling your primary residence in Austria will often be tax-exempt.
READ ALSO: Can owners of second homes in Austria get residence permits?
What do I have to pay capital gains tax?
If you didn’t live in your main residence long enough before selling, or you’re selling a second home, you’ll need to pay capital gains tax. How much you need to pay though, depends on whether you bought the place recently – or a long time ago.
You’ll have to pay this tax regardless of whether you’re an official resident of Austria or not.
In most cases, it will be a flat rate of 30 percent of the gain – so the difference between what you bought it for and what you sold it for. However, you can deduct the costs of any improvements or renovations from the gain to reduce your tax burden.
If you lose money, you can also file a tax return to claim tax credits for this.
There are some exceptions to this 30 percent rule though – but only if you’ve owned your place for around 25 years. Anyone who bought their place before 31st March, 2002 will be taxed only 4.2 percent of their capital gain.
The exception to this is if they reclassified the home under planning laws sometime after 1987. Even here though, the seller will pay 18 percent rather than 30 percent. If in doubt, try asking a tax advisor for clarification.
READ ALSO: Does Austria tax unoccupied homes?
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