Dear Clients,
The introduction of new taxes is discussed almost daily in the media. Various models are presented and arguments for and against are exchanged. The focus is on "wealth-related taxes", i.e. gift tax, inheritance tax, wealth tax and real estate transfer tax. We have put together a brief update for you below.
Gift Tax
Gifts are tax-free in Austria and no gift tax or income tax is payable. Unless it concerns real estate gifts (land, houses, etc.), in which case real estate transfer tax is payable.
For example if the parents of a daughter/son want to buy an apartment for the daughter/son, it is advisable from a tax point of view to give the money for the purchase of the apartment to the child and the daughter/son buys the apartment. So the real estate transfer tax is paid only once.
Gift Notification
However, gifts to close relatives of more than EUR 50.000 per year and gifts to strangers of more than EUR 15.000 per year must be reported to the tax office within 3 months of the acquisition in the form of a so-called "gift notification".
The gift notification makes sense for the donee because it can be used as proof of the origin of the funds in the event of subsequent purchases by the donee during a money laundering check.
If the tax office finds out about the gift after the deadline has expired and no notification has been made, a fine of up to 10% of the value of the gift may be imposed.
Inheritance Tax
Inheritances are tax-free with the exception of real estate assets and the related real estate transfer tax.
Wealth Tax
There is currently no wealth tax in Austria.
Real estate transfer tax
In Austria the real estate transfer tax on the purchase of real estate, houses, apartments and land amounts to 3.5 % of the purchase price. In the case of acquisition by gift or inheritance, the assessment basis for the tax is determined on the basis of data from the tax office, information on the state of preservation of buildings and data from Statistics Austria. Several valuation methods are available.
The tax rate is 0.5 % for the first EUR 250.000, 2 % for the next EUR 150.000 and 3.5 % thereafter. In addition there is a registration fee of approximately 1.1 % of the value of the property unless an exemption applies:
Please note that there may be changes in the area of wealth-related taxes in Austria soon! If you need any advice how to transfer, structure or restructure your wealth please contact us.
Best regards
Manfred Gross
Vienna, July 2024
