What expenses should be expected when purchasing real estate in Austria for Russian citizens?

Costs associated with purchasing real estate

In this article, we will discuss the various costs associated with purchasing real estate, including private homes, as well as examine the nuances of taxation and specific aspects related to new constructions that may be relevant for residents of Russia.

One-time expenses

Buying a home involves several important one-time expenses. First of all, it is worth paying attention to:

• Tax on the transfer of ownership rights— is 3.5% of the cadastral value of the property.
• Tax for property ownership registration— 1.1% of the cost.
• Legal services— from 1% to 3% of the total transaction amount.
• Realtor's commission— standardly 3% of the cost, increasing to 4% if the price exceeds 48,448 euros, and fixed at 1,453 euros for costs up to 36,336 euros.

Drafting a sales contract

When it comes to drafting a sales contract, the array of expenses can vary significantly. It is important to consider that:

• Costs depend on the rates set by the compiler, the type of property, and the amount of the transaction.
• Additional overhead costs include notary fees and stamp duties, ranging from 1% to 2.5% of the property's value.
• The cost of notifying government authorities and the income tax from the sale of real estate is also determined based on the rates set by the preparer.

Procedural and administrative expenses

It's important not to overlook the procedural and administrative costs that may arise when obtaining permits from local authorities. These expenses depend on the specific area where the purchase is being made. For those planning to take out a mortgage to buy a home:

• Additional costs can amount to about 2% of the total loan amount.

Additional expenses when buying a private house

When buying a private house, it's important to remember the costs associated with preparing the land according to local authorities' requirements. This may include:

• Expenses for leveling the site for construction.
• Connection to utility systems: gas, electricity, water supply, and sewage.

Taxes on new buildings

When buying property in new developments, you should consider:

• 20% VAT, which is often included in the price.
• If the owner lived in the apartment themselves and did not rent it out, they can reclaim this tax after three years.

Tax policy can vary depending on the region and the characteristics of a specific entity.

Conclusion

Thus, the process of acquiring real estate involves numerous one-time and recurring expenses, which are crucial to consider in advance to optimize financial risks. It is recommended to thoroughly analyze all aspects of the transaction to avoid potential issues and effectively manage your financial resources.

The variety of price lists in new buildings

In the world of transactions involving new constructions, there is a variety of price lists that can differ significantly. For example, a price list including VAT is available for regular buyers, while an alternative option without this tax is accessible for investors.

Monitoring of real estate operations

Authorities monitor how residential spaces are used to ensure that their operation aligns with previously stated intentions. Inspections can occur at any time and without prior notice. Inspectors can also track tenants' financial transactions, allowing them to stay informed about the current situation.

Housing maintenance costs

Managing residential property requires ongoing expenses. The property tax is included in the utility bills and can increase each month. For a private house, the amount of this tax is determined based on the cadastral value of the land.

Main expenses

In addition to the main expenses, such as rent, tenants also make payments for:

• water supply;
• electric energy;
• gas;
• connection.

Sometimes even having a television can be a reason for additional fundraising. Utility bills often range from 2 to 3 euros per square meter per month, but this amount can vary depending on the region, type of housing, and the characteristics of the apartment itself. Payments for heating and electricity are adjusted based on the season and the residents' habits regarding resource usage.

Responsibilities of property owners

According to the law, the owner of an apartment must regularly contribute funds to cover potential future expenses.

Conclusion

In conclusion, it is important to emphasize that purchasing and operating real estate in Austria requires a careful approach and thorough assessment of all potential costs. Faced with one-time and ongoing expenses, taxes, and various fees, the buyer should be prepared for the possibility of unforeseen costs even at the acquisition stage. It is crucial to research all necessary conditions and bureaucratic aspects in advance to avoid unpleasant surprises in the future.

Features for citizens of Russia

Citizens of Russia and other foreigners should pay special attention to the specifics of the legislation regulating the purchase and ownership of real estate outside their country. Despite the restrictions, there are mechanisms that allow for the optimization of taxation and the use of tax benefits. It is important to note that, unlike individuals, citizens from outside the EU often require the registration of a legal entity to purchase real estate, which can significantly change the approach to investments.

Taxation on the sale and rental of real estate

Equally important is the need to understand the nuances of taxation when selling and renting real estate. Proper financial planning and the use of all available opportunities can significantly reduce overall expenses. In conclusion, I would like to emphasize that although the real estate market in Austria may seem complex and confusing, with the right preparation and information, any obstacles can be overcome. With a clear strategy and an understanding of all the nuances, any investor can achieve their goals and secure a stable income from real estate.