- Austria taxes residential letting at a reduced 10% VAT rate, unlike the usual VAT exemption for property rentals in the EU.
- From 1 January 2026, “luxury” or “particularly representative” residential properties will become VAT-exempt, and landlords will lose the right to deduct input VAT.
- A unit is luxury if total net costs exceed EUR 2 million within five years of acquisition or construction; for multi-unit buildings, the test applies per unit.
- Relevant costs include purchase price, construction, major improvements, repairs, and related structures like garages or pools.
- The new rules mainly affect high-end projects, especially in high-value locations, making early VAT review and project structuring important.
Source: ggi.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
