Real Estate Transfer Tax for Businesses

Real Estate Transfer Tax

The acquisition of real estate by businesses or the transfer of shares in real estate-owning companies regularly triggers real estate transfer tax. This is a transaction tax that arises upon the gratuitous or non-gratuitous transfer of domestic real estate or certain corporate transactions.

The real estate transfer tax is a levy that applies to the acquisition of real estate or certain company shares in Austria.

Subject of Taxation

Real estate transfer tax is incurred when domestic real estate is transferred in the civil law sense. This includes not only the land itself but also permanently attached accessories.

• Land
• Appurtenances
• Increase
• Subsurface rights
• Superstructures

However, movable assets such as the following are not subject to real estate transfer tax:

• Machinery of an operating facility
• Other inventory

Acquisition Processes

While additional acquisition events apply to businesses, such as changes of shareholders or consolidations of shares, different regulations apply to natural persons. Further information on general acquisition processes can be found on our page: Real Estate Transfer Tax.

Change of Shareholders in Real Estate-Owning Companies

Real estate transfer tax arises according to Section 1 Para. 3 GrEStG , if at least 75% of the shares in a real estate-owning company are transferred to new shareholders within seven years. A single acquisition is not decisive. The relevant event is the one by which this threshold is exceeded for the first time. From this point, the seven-year period begins to run again.

Consolidation of Shares in Real Estate-Owning Companies

The consolidation of at least 75% of the shares in a real estate-owning partnership or corporation in the hands of one acquirer or a group of acquirers is also subject to real estate transfer tax. This includes both direct and indirect share acquisitions.

A group of acquirers exists when persons or companies are under uniform management or dominant influence, for example, in corporate group structures.

Tax Exemptions

Special tax benefits apply to entrepreneurs for the transfer of business real estate. These are intended, in particular, to facilitate business successions.

Business Transfer for Commercial Enterprises or Self-Employment

An allowance of €900,000 applies to gratuitous and partially gratuitous transfers. This can be claimed if:

• the transferred entity generates business income,
• the acquirer is a natural person,
• the transfer occurs due to age, death, or permanent incapacity to work, and
• at least 25% of the business is transferred.

The allowance must be apportioned to the gratuitous part. Additionally, the tax for this gratuitous part is capped at 0.5% of the property value.

Business Transfers in Agriculture and Forestry

Here, the allowance is €365,000. The conditions essentially correspond to those for commercial enterprises, with the transferred assets having to generate agricultural and forestry income.

Land Consolidation and Reallocation Procedures

No real estate transfer tax is incurred upon the transfer of agricultural or forestry land in the course of an officially approved land reallocation or consolidation procedure, provided that a corresponding decision from the agricultural authority is available, which is binding on the tax office.

Sebastian Riedlmair
Harlander & Partner Attorneys „Die Grunderwerbsteuer ist oft ein unterschätzter Kostenfaktor – wer frühzeitig rechtlichen Rat einholt, kann Befreiungen optimal nutzen und vermeidbare Belastungen verhindern“

Assessment Basis

The amount of real estate transfer tax depends on the so-called assessment basis. It is crucial whether it is real estate of the basic assets or agricultural and forestry land. Generally, the same rules apply to businesses and private individuals, with specific deviations for certain acquisition events.

General Principle

As a rule, the real estate transfer tax is calculated based on the consideration, i.e., the actual value of the remuneration paid. In special cases, such as gratuitous transfers or acquisitions within the family, not the consideration, but a standardized property value, the standard value, or the fair market value is to be used.

Consideration

The consideration includes everything the acquirer expends to obtain the property.

Property Value

The property value is decisive when no or only very low consideration is provided.

Standard Value

For agricultural and forestry land, not the property value, but the standard value is to be used.

Fair Market Value

The fair market value is to be used as the assessment basis either voluntarily, if it can be proven to be below the property value, or mandatorily, if the property belongs to the assets of a real estate company, the latter applying when the properties are not used for own operational purposes, but are primarily rented out or sold.

Real Estate Transfer Tax and Registration Fee

The real estate transfer tax generally amounts to 3.5% of the assessment basis; for gratuitous transfers, especially within the family, a staggered progressive tariff applies. Additionally, a fee of 1.1% is incurred for the entry in the land register.

Tax Debt and Tax Debtor

The tax liability arises as soon as a taxable acquisition event is completed, for example, with the signing of the share acquisition agreement.

In the event of a change of shareholders, the real estate-owning company is itself the tax debtor.
In the case of a share consolidation, however, the person or group of acquirers in whose hands at least 75% of the shares are consolidated is liable.

Payment of Real Estate Transfer Tax

The real estate transfer tax is paid either by submitting a tax declaration or by self-assessment by a notary or lawyer via FinanzOnline. In both cases, the notification must be made no later than the 15th of the second following month after the tax liability arises.

Certificate of No Objection According to § 160 BAO

The tax office issues a Certificate of No Objection pursuant to § 160 BAO. This confirms that the real estate transfer tax has been paid in full and correctly, or that no such tax is due.

This certificate is a prerequisite for the land registry court to register the transfer of ownership. Without this confirmation, the land registry procedure will be interrupted.

Your Benefits with Legal Assistance

Especially in the case of business real estate transfers, reorganizations, or share shifts, real estate transfer tax is a complex topic with high risks. Incorrect assessments quickly lead to significant additional costs or subsequent tax collection. Therefore, precise legal support pays off, both professionally and financially.

Frequently Asked Questions – FAQ