Purchase Agreement

Purchase of Real Estate

Peter Harlander
Harlander & Partner Rechtsanwälte „Wir koordinieren uns mit Notar, Finanzamt, Banken und Gericht und halten Sie dabei über die wesentlichsten Schritte stets auf dem Laufenden“

Sign the purchase agreement, done. The desired property belongs to me.

In practice, it is not quite that simple. In addition to the notarized purchase agreement, numerous other things must be taken into account in order to call oneself the owner of a property – also in a legal sense.

Purchase Agreement

The first step is the signing of a purchase agreement. This describes in particular the parties to the purchase agreement, the object of purchase or its transfer, and the purchase price. As a rule, provisions on warranty costs (taxes, lawyer) are also included.

Ranking Order Decision

As a matter of principle, the saying goes: “first come, first served”. However, this principle can be broken by the ranking order decision. The owner of the property is entitled to request a note of the ranking order in the land register for an intended sale. The annotation of the ranking order takes place by means of a ranking order decision, which is valid for one year. This serves primarily as security for the buyer, because only by presenting the ranking order decision can he be registered, so no second buyer can preempt him with the registration. However, the annotation of the ranking order can also be made out to specific persons, so the ranking order decision does not have to be presented at the time of registration.

Domestic Declaration/Negative Confirmation

In the province of Salzburg, the buyer of a property must confirm by means of a so-called domestic declaration that he is not a “foreigner.”

In other provinces such as Carinthia and Vienna, a confirmation from the land transfer authority is required that the legal transaction is exempt from the approval requirement, i.e. that the legal acquirer is a citizen or EU/EEA citizen.

Escrow

In the course of a purchase agreement, a sometimes high sum of money is usually paid out from one contracting party to the other. In order to protect both sides optimally, there is the institution of trusteeship. A separate trust agreement is concluded between the parties to the purchase agreement and the contract drafter and trustee (in our case, our law firm), which precisely describes when the trust deposit (=purchase price) is to be paid out to the seller.

For each trusteeship taken over by us, a separate trust account is opened, which serves only to process the respective purchase agreement. This excludes a “mixing”.

In addition to this agreement, we as a law firm are obliged to report each trusteeship taken over to the Salzburg Bar Association responsible for us.

Taxes and fees

Taxes and fees are incurred with every real estate purchase. The two most important are the real estate transfer tax and the registration fee. The former is usually 3.5% of the assessment basis, the latter 1.1% of the assessment basis.

Our law firm takes over the calculation of the taxes and the registration with the tax office. Subsequently, we prescribe the concrete tax or fee amounts to you, which we then transfer to the tax office in due time.

Land Register

Every acquisition of ownership of a property (whether house, land or apartment) must be entered in the land register. Only the entry in the land register makes the acquisition of ownership “publicly” visible and finally concludes it.