How Austria's new plans to avoid a housing crisis will affect residents
Cheap loans, new builds and tax deductions: here's how Austria wants to increase homeownership and avoid a housing crisis.
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Austria's construction boom is coming to an end, but demand for housing continues to be high in the country. The combination has concerned the federal government, and the ruling coalition has now announced measures - including cheaper loans, new residential builds along with several bonuses and tax allowances.
The government hopes the measures will help shape Austria's real estate market in the coming years.
Financing non-profit developers and first-home buyers
The government has announced it will spend €2 billion to stimulate residential construction via non-profit property developers (which build municipal and cooperative housing in Austria). With the money, Austrian states will be able to grant housing loans of up to €200,000 with a maximum interest rate of 1.5 percent for both house builders and future homeowners.
READ ALSO: Why people have stopped buying property in Austria
According to the government, 10,000 new properties will be built and sold, as well as 10,000 rental flats and 5,000 properties will be renovated and brought back onto the market with the earmarked funds.
In addition, families buying their first home will not have to pay certain fees that could help them save up to €11,500.
As the package aims to heat up the construction sector once again, the federal government claims it will secure 40,000 jobs.
New taxes and bonuses
In order to help finance measures and prevent a housing crisis in the country, the states will be authorised to levy "recreational housing", "secondary residence", and "vacancy" taxes. States with high second-home rates, where residents have a hard time finding homes but tourists flock during high seasons, would particularly benefit from this.
On the other hand, there will be bonuses for "climate-friendly" refurbishments.
For rented flats, measures relating to thermal refurbishment and the replacement of heating systems will be subsidised for 2024 and 2025 with a tax deductibility supplement of 15 percent. For example, if you spend € 1,000 to improve the insulation or replace windows in your rental apartment, you can deduct € 1,150 as an expense on your taxes later.
READ ALSO: Property buying rules for international residents in Austria
Another bonus, a "tradesman bonus plus" (Handwerkerbonus plus), is set up to incentivise people to do more construction work and renovations.
In 2024 and 2025, anyone who commissions tradespeople will be able to claim €2,000 in subsidies from the federal government, up to a maximum of 20 percent of the cost of a contract. The bonus can be submitted per (adult) person - a family of four with two children could, therefore, receive €4,000 back from the state for a new patio. However, only one application per year will be permitted.
Tradesmen's expenses up to a maximum of €10,000 are eligible. There are to be no restrictions on which services can be invoiced. According to chancellor Karl Nehammer, the bonus will be an "important stimulus for businesses".
READ ALSO: Can foreigners buy a second home in Austria?
The federal government's so-called "housing umbrella" will also be increased: money distributed via the federal states to prevent hardship cases (such as evictions due to a sharp rise in energy costs). According to the government, €65 million is already available for this in 2024. Now, another €60 million will be added.
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Austria's construction boom is coming to an end, but demand for housing continues to be high in the country. The combination has concerned the federal government, and the ruling coalition has now announced measures - including cheaper loans, new residential builds along with several bonuses and tax allowances.
The government hopes the measures will help shape Austria's real estate market in the coming years.
Financing non-profit developers and first-home buyers
The government has announced it will spend €2 billion to stimulate residential construction via non-profit property developers (which build municipal and cooperative housing in Austria). With the money, Austrian states will be able to grant housing loans of up to €200,000 with a maximum interest rate of 1.5 percent for both house builders and future homeowners.
READ ALSO: Why people have stopped buying property in Austria
According to the government, 10,000 new properties will be built and sold, as well as 10,000 rental flats and 5,000 properties will be renovated and brought back onto the market with the earmarked funds.
In addition, families buying their first home will not have to pay certain fees that could help them save up to €11,500.
As the package aims to heat up the construction sector once again, the federal government claims it will secure 40,000 jobs.
New taxes and bonuses
In order to help finance measures and prevent a housing crisis in the country, the states will be authorised to levy "recreational housing", "secondary residence", and "vacancy" taxes. States with high second-home rates, where residents have a hard time finding homes but tourists flock during high seasons, would particularly benefit from this.
On the other hand, there will be bonuses for "climate-friendly" refurbishments.
For rented flats, measures relating to thermal refurbishment and the replacement of heating systems will be subsidised for 2024 and 2025 with a tax deductibility supplement of 15 percent. For example, if you spend € 1,000 to improve the insulation or replace windows in your rental apartment, you can deduct € 1,150 as an expense on your taxes later.
READ ALSO: Property buying rules for international residents in Austria
Another bonus, a "tradesman bonus plus" (Handwerkerbonus plus), is set up to incentivise people to do more construction work and renovations.
In 2024 and 2025, anyone who commissions tradespeople will be able to claim €2,000 in subsidies from the federal government, up to a maximum of 20 percent of the cost of a contract. The bonus can be submitted per (adult) person - a family of four with two children could, therefore, receive €4,000 back from the state for a new patio. However, only one application per year will be permitted.
Tradesmen's expenses up to a maximum of €10,000 are eligible. There are to be no restrictions on which services can be invoiced. According to chancellor Karl Nehammer, the bonus will be an "important stimulus for businesses".
READ ALSO: Can foreigners buy a second home in Austria?
The federal government's so-called "housing umbrella" will also be increased: money distributed via the federal states to prevent hardship cases (such as evictions due to a sharp rise in energy costs). According to the government, €65 million is already available for this in 2024. Now, another €60 million will be added.
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