ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN AUSTRIA]

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Furthermore, a court registration fee of 1.1% of the purchase price is charged for the registration of new ownership rights in the land register. The prerequisite for the registration of the ownership right in the land register is, in addition to the already mentioned documents, the proof that the real estate transfer tax has been paid to the responsible tax office (so- called clearance certificate). The processing with the financial authorities is regularly carried out by the trustee (attorney at law or notary public) who draws up the purchase contract. Since April 1, 2012, earnings from the sale of private real estate are subject to the Austrian Real Estate Income Tax (“Immobilienertragsteuer” - ImmoESt). The taxation is not based on the regular income tax rate, but on a special 30% tax rate (there are exceptions to this taxation, for example if the own residence is sold). For the purposes of real estate income tax, the term "property" refers to land and buildings, condominiums, and rights equivalent to real estate property, such as building rights. XIII. Additional Costs In event of broker's commission; Attorney or notary fees; the purchase contract is usually drawn up by a lawyer or a notary who normally also apply for the registration in the land register. In most cases the attorney / notary also acts as trustee. The amount of the lawyer's or notary's fees is approximately 1-3% of the purchase price. In addition, it is possible to agree a lump sum. Costs for authentication of signatures: In order to register the new ownership in the land register, it is necessary that the signatures on the purchase contract and (if applicable) on the

mortgage deed for the mortgage loan are certified by a court or notary public. XIV. EU and other countries In general, EU/EEA citizens and entities are allowed to freely purchase and sale real estate in Austria, while non-EU/EEA citizens and entities may only purchase Austrian real estate with the permission of the competent Government Office. In this case, a corresponding application must be made to the authority that approves the acquisition. In tourist zones there may be further restrictions for the purchase of real estate property. XV. Donation The donation of a property (land, apartment, etc.) constitutes a contract that the donor and the donee (recipient) conclude with each other. The donation must be accepted by the donee. Thereby, certain formal requirements must be observed: The gift without immediate transfer requires according to Austrian Law a written contract in form of a notarial deed. If the property is handed over to the donee immediately, the signatures of all parties must be certified by a notary public for the transfer of ownership to be recorded in the land register. From a tax point of view a donation and the purchase of real estate are quite comparable, but since the gratuitous transfer does not result in a capital gain of the seller, the donation generally does not incur Real Estate Income Tax. However, caution is required in the case of a so-called "mixed gift", i.e., if an - even if symbolic - consideration is paid for the property. On the other hand, the donation of real estate is subject to Real Estate Transfer Tax as well as to a court registration fee. The basis of assessment for the Real Estate Transfer Tax in the case of donations is the property value which is generally determined by an expert or

ILN Real Estate Group – Buying and Selling Real Estate Series

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