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'Leerstandsabgabe': Everything about Austria's vacancy tax explained

Attila Peter
Attila Peter - [email protected]
'Leerstandsabgabe': Everything about Austria's vacancy tax explained
Salzburg is one of the states in Austria where there is a vacancy tax. (Photo by Anthony Hill on Unsplash)

In Austria, there is a housing shortage and rents are rising. Some experts believe that can be offset by imposing a so-called vacancy tax (Leerstandsabgabe) on properties that are available for rent or sale but are unoccupied.

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Some experts argue that a vacancy tax forces owners to rent out or sell their properties and thus reintegrate them into the housing market, bringing down rental costs. It also makes speculation more difficult by discouraging investors from buying properties only to hold on to them as they hope for future price increases. 

Finally, it helps prevent soil sealing since it encourages the utilisation of the existing stock and reduces the pressure to develop new areas.

Vienna had a vacancy tax in the early 1980s, but it was abolished later in the decade because the Constitutional Court found it was a matter for the federal government rather than the individual states. However, on April 24th this year, the Federal Council passed a constitutional amendment, transferring “the levying of public charges to prevent the non-utilisation or under-utilisation” to the states’ jurisdiction. In other words, the states now have more room for manoeuvre regarding taxing vacant properties.

READ ALSO: Why buying property in Austria remains unaffordable for most

How high is the vacancy tax?

As is often the case with regulations, the states show little uniformity: rates vary considerably.

In Styria, you pay a maximum of €10/m2 per month, while in Salzburg, the amount depends on how old the property is, and it ranges between €10 to 20/m2 per month for housing units built before and after 1953, respectively. 

The law is even more specific in Tyrol, where the levy is determined based on the total usable floor area and the location of the property, as well as the housing pressure in the particular region. For example, if you own a flat smaller than 30 m2, you might have to pay €10-25/m2 per month. The amount doubles if your property is in a so-called “Vorbehaltsgemeinde”, where housing and building land are reserved for those who live there all year round. 

In Vorarlberg, the rate is defined based on the proportion of vacancies in any given municipality. It’s between €8.20 and 18.50/m2 per month but cannot exceed €2,775 per year.

However, in these four states, where a vacancy tax is currently in effect, property owners aren’t in a hurry to register to pay despite fines that can be as high as €50,000.

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In Tyrol, where the tax is payable if a property is left empty for longer than six months with no legitimate reason, authorities only received 900 vacancy notifications by the April 30th deadline - a relatively small number, given that there are roughly 7,000 flats in the state that weren’t registered either as a main or as a secondary residence for over half a year in 2023.

Municipalities in Tyrol and elsewhere are urging flat owners to sign up and pay, but regulations aren’t rigorously enforced, and many exceptions exist. For instance, in Salzburg and Styria, so-called investment apartments (“Vorsorgewohnungen”) intended for rental rather than personal use are exempt from taxation.

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How effective is the vacancy tax?

In a fact sheet published in mid-April, Greenpeace estimated that there are around 230,000 empty flats and 567,000 rarely used secondary residences in Austria. The organisation calculated that the vacancy tax could generate annual revenues of up to €1.7 billion for the federal states if all nine of them were to impose it.

According to Momentum Institut, the rates in Styria, Salzburg, Tyrol, and Vorarlberg are much too low to have a significant impact. The Vienna-based think tank argues that property owners - whether they’re companies or individuals - will not choose to rent or sell their vacant flats unless the tax “hurts financially”. The institute recommends a levy of at least €200/m2 per month - a far cry from the current rates. (Only as the owner of a property in Tyrol that is bigger than 250 m2 do you have to pay so much.)

Regardless of the rates, the vacancy tax, much like any other tax, is a political instrument and, as such, a bone of contention. 

READ ALSO: Germany or Austria: Where’s the best place for foreigners to buy property?

While it has been shown—in France, for example—to reduce the pressure on housing supply and address housing affordability, opponents say it violates the right of property ownership.

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How effective it will be in Austria depends on regional circumstances and implementation. Should it fail to have the desired effect, the states where it is in force might even decide to abolish it. Conversely, if it turns out to be a success story, it may eventually become the law of the land.

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