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Property in Austria – Guide to Buying Property in Austria

November 14th, 2022

Overview

The Austrian Property Market

In considering an overview of real estate in Austria,Guest Posting the most striking fact associated with real property in that country is the fact that overall the costs associated with real estate in Austria is higher than any other country in Europe. In addition, the cost of living in Austria generally is higher than any other country in Europe at the present time.

With this in mind, it is also important to note that the tax rate in Austria when it comes to the buying and selling of real estate in that country also runs rather high. For example, any capital gains that are experienced on the sale of real estate is taxed in Austria as regular income at the significant rate of 34%. There are exceptions to this taxation. First of all, a piece of real estate that is used as a primary residence is exempt from this tax. Additionally, all real estate that is held for ten yours or more is exempt from this taxation as well. Therefore, many people, including foreign nationals, hold on to investment real estate for at least ten years before turning around and selling the property for a profit.

Historically, Germans have been the primary group of foreign nationals that have taken to purchasing real estate in Austria.

Investment Property in Austria

As will be discussed in greater detail later, foreign nationals have a history of investing in real estate in Austria. In recent years, significant steps have been taken and made to streamline and simplify the manner in which foreign nationals can invest in real estate in Austria. This particular is true when it comes to foreign nationals from the countries that make up the European Union.

A foreign national that is interested in investing in real estate in Austria needs to keep in mind that the cost of real estate in that country is higher than in any other country in Europe. Thus, for the most part, individuals who find themselves investing in real estate in Austria tend to be a bit better heeled and tend to have a higher amount of disposable income.

Income Growth in Commercial Real Estate

April 18th, 2022

Every commercial property will have income streams. The question is, are they all optimized and utilized. In this market the income streams for commercial property are so important to the landlord and the financiers for the property. A property with multiple and well protected income streams will more easily ride out the economic challenges of this market.

In markets like this the real estate agent with the highest service value to landlords, is the one that helps strengthen and optimize the income streams across the property where ever possible. If you like it is a mindset that the real estate agent brings to the market.

In case you haven’t noted yet, many real estate markets are starting to sort out the economic challenges and the ‘cashed-up’ investors are on the ‘prowl’. So who said the market was ‘dead’? The reality is that the commercial real estate market is starting a new cycle. In 12 or 18 months the momentum will be well underway.

So let’s get back to the main point of this discussion and look at income optimization. By definition it is the identification and activation of all income streams that can be realistically charged to the tenants as part of their building usage. In other words the simple lease rent is not the only thing that you can get for the landlord.

Look ‘outside the square’ and know that utilization of the asset by the tenant in all ways has to be paid for. Also give due regard to any laws and legislation that may be special to the property or your location and could limit or direct the way you raise rental charges. We say this here because ‘Retail Shop Leasing’ in many locations stipulates how you raise and declare rent charges to tenants. Just be careful with this and when in doubt see a good property solicitor to give you guidance.

The Income steam focus is twofold:

Quality – The strength, term, and type of leases, rents, and tenants.
Quantity – The amount of gross and net income achieved, and its relativity to other market rents, and its potential to increase.
The income stream covers all the types of income on a given property, some income being less secure than others. Income can typically be from:

Leases for occupied areas
Rent review structures that provide growth in the lease rents
Auto tellers operating on the property
Public telephones in common areas
Outgoings management and savings
Internet kiosks for the visitors to the property to use
Advertising on and in the property
Fitout rental for any existing fitout that is owned by the landlord and the tenant is now using
Rental for monthly or casual leased space
Rent types such as gross rents, net rents, that are strategically selected for new leases given the existing levels of outgoings
Licences for special areas of occupancy such as storage, signage, antennas on the roof, extra area use such as outside dining beyond the demised leased premises
Car park fees for permanent and casual parking
Expenses that are recovered from the tenants such as cleaning of tenants space, and electricity usage within the tenancy space
Casual leasing of special areas and common areas
Communication sites and antennas on the roof of the building
Riser charges where any cable is laid for tenants
Establishment of kiosks and smaller tenancies in common areas
After hours air conditioning on an hourly basis
This list should not be viewed as the only income streams that you can tap for the landlord. It may be that your property will have other opportunities that can be optimized. Importantly you look for them and implement them wherever possible.