Which Type of Property? Austrian Property Types Explained
Each property in Austria has a defined legal status which determines the manner in which owners are allowed to use the property. Properties will typically fall in one of the following categories:
"Permanent Residence" - this type of property is intended for long-term stay and therefore optimal for those who want to permanently relocate to Austria. Owners need to register as permanent residents in the property and become Austrian tax residents. It is also possible to rent out this type of property on a long-term basis to someone who will register there as a permanent resident. Given these strict requirements, permanent residences are usually not suitable for most foreigners who only want to use the property occasionally as a holiday home.
"Tourist Residence" - A variation on the Anglo-Saxon "buy-to-let" property, this type of property presents an attractive combination of investment property and holiday home and is the most sought-after by foreign buyers. These properties allow several weeks of private use to their owners (typically 4 to 12) and are sublet to visitors by a professional agency in owner's absence. Thanks to the rental income, owners can achieve an attractive net rental yield, usually between 4-6% per annum. This concept is extremely well developed in Austria as regional authorities attempt to support the tourist sector and prevent the creation of "ghost towns" whereby foreigners would purchase a property and only use it a couple of weeks every year. The rental management is a hassle-free exercise for owners as the management agency will cover everything from guest management, check-ins and check-outs, cleaning and maintenance. There is also a significant tax advantage for acquiring a “Tourist Residence” in Austria.
"Second Home" (="Zweitwohnsitz") - this type of property offers complete flexibility of use. Owners do not need to register as permanent residents, they can use the property freely as they wish, sublet it on long- or short-time basis or not sublet it at all. Properties with this legal status are extremely rare, particularly in Tyrol and Salzburgerland. From 2018, the number of Second Homes in Salzburgerland has been restricted and municipalities with more than 16% of existing second homes are no longer allowed to permit new Second Home projects. If you are looking exclusively for a Second Home, Domus Global still has a good choice of these properties.
Deciding whether you want an investment type of property or a flexible second home is the one most important thing to decide about the property you want. Bear in mind that if you decide for the latter, your choice will be significantly more limited.
Domus Global also offers a wide range of first residences and we are always happy to source specific type of properties for our buyers on request.