What taxes will I have to pay?

Everyone who rents a property in Austria – no matter if VAT rebate or not – needs to declare the income at the end of the year and pay income tax if the income is above the tax-free allowance.

The interest you pay on your mortgage can be written off against rental income profits. You can also write off 10% of the cost of your furniture package per year as depreciation against your rental income.

For people who don’t have other taxable income in Austria the income tax exemption per person/year is only 2,330 euros. Therefore, the tax-free allowance for two would be 4,660 euros.

Above a certain rental income per year (33k) it is mandatory to register for VAT. This is often the case if clients own more than one property – even if these properties are bought at the net or gross price. If the yearly rental income is below 33k and if the property was not bought at the net price there is no VAT to be paid on the rental income.

We always recommend a choice of local tax advisors to help with your tax returns. The tax advisor will charge a one-off fee to set up your registration (please contact advisors directly for prices) and annual tax returns will cost in the region of 600 – 900 euros per year.

Tourism Tax:
When you rent your property you will need to charge your guests tourism tax for the nights they spend in your property. The rate of tax varies from resort to resort but as a rough guide it is somewhere between 1 and 3 euros per night per person for each guest over the age of 14 years.

Capital Gains Tax:
Capital Gains Tax of 30% will apply to any profits you have made by selling a property, but some deductions may be made when calculating the profit.

Inheritance Tax:
There is zero Inheritance tax in Austria as was abolished in 2008.