Ownership structures and rental income

Newcomers from trust and holding-company jurisdictions often assume the family home belongs inside a structure. In Austria the arithmetic mostly says otherwise. Individuals enjoy a main-residence exemption that can eliminate the 30% sale tax entirely; structures never do. Austria levies no wealth tax that a structure could shelter against, and no inheritance or gift tax that ownership through an entity would avoid. What a structure adds for an owner-occupied home is cost, filings — and tax risk, because living rent-free in a house your own company owns is a textbook hidden profit distribution.

Structures earn their keep elsewhere: rental portfolios of some scale, development projects, properties held for several branches of a family, or assets that belong inside an existing Austrian private foundation for governance and succession reasons. Even then, the decision is a calculation, not a default — and it should be made before the purchase, because moving a property into or out of a structure later triggers transfer taxes each time. The mechanics of the acquisition itself — approvals, escrow, registration — are on the page about the purchase process and costs, and one genuine structural use case for non-EU nationals is noted under buying as a foreigner: in Vienna, interposing Austrian companies can remove the land-transfer approval requirement.

Rents are ordinary income: they join salary and business profits in the progressive scale that tops out at 55%, with the bands set out under Austrian income tax rates. The taxable figure, however, sits well below the cash rent. The building — not the land — is depreciated at 1.5% a year for residential lettings; in Vienna, typically 30–40% of a purchase price is attributed to non-depreciable land. For buildings acquired or completed after mid-2020, depreciation may be tripled in the first year and doubled in the second (rules as of 2026). Financing interest, operating costs not passed on to tenants, management, insurance and repairs are deductible, with certain substantial refurbishment costs spread over fifteen years.

Residential letting is also a VAT activity: rents to tenants carry 10% VAT, which the landlord charges and remits while recovering input VAT — significant on new-builds bought with 20% VAT, and the reason buy-to-let purchases are often structured with the seller's VAT option, as explained with the transaction cost rules. Small landlords under the EUR 55,000 turnover threshold can stay outside the system. Two cautions complete the picture: chronic tax losses invite reclassification of the letting as a hobby, with losses disallowed — financing structure matters — and rent regulation itself caps what parts of the older stock can earn at all, as set out under Austrian tenancy law. The yield mathematics start from the current Vienna price and rent levels.

Real estate transfer tax reaches further than direct sales. If real estate sits in a company or partnership, transfer tax is triggered when at least 75% of the shares or interests change hands within seven years, or are pooled with one acquirer or group. The charge is then 0.5% of the property value — unless the entity is a real-estate company, one whose focus is the sale, rental or management of property, in which case 3.5% of the property's fair market value applies. Anyone buying, holding or one day selling a property-rich company should price these rules in from the start; they were tightened precisely to catch structures that once passed buildings between owners tax-free.

Within families, transfers are treated with deliberate generosity. Gratuitous transfers — and any transfer between close relatives, which is deemed gratuitous whatever consideration is paid — attract banded rates on the property value: 0.5% up to EUR 250,000, 2% to EUR 400,000, 3.5% above, with transfers over five years aggregated. With no inheritance or gift tax in Austria, this banded transfer tax plus the 1.1% registration fee is the entire tax cost of passing a Viennese apartment to a child — the wider context, including the gift-notification duty, is on the page about inheritance and gift taxation in Austria. Endowing real estate to a private foundation instead attracts the banded rates plus a foundation surcharge of 3.5% of the property value (rate as of 2026).