Focus on tax updates
Events in 2024 brought important changes in tax regulations for investors that make their investments even more attractive. The measures to boost investments include, for example, improved depreciation rules and longer forecast periods for rentals. The depreciation rate for new buildings was raised and energy-efficient buildings, in particular, profit from 4.5 % in the first three years. That not only supports new construc- tion but also creates an opportunity to enjoy tax benefits on future-oriented properties. Another amendment improves planning security for renters: The forecast periods decisive for the estimation of input tax on rental income were extended. In addition, the monitoring period was extended to 25 years for “small-scale rentals” and to 30 years for “large-scale rentals”.
That means longer term stability and less uncertainty for yield forecasts.
Improved depreciation rules and the expanded small business rule make it easier to invest in real estate and utilise the related tax benefits. Given the high demand for rental apartments, especially in major cities, the market will remain promising. Investors who take advantage of the attractive market opportunities now available in the real
One highlight for the years beginning in 2025 is the small business rule, which is directed primarily to private investors with lower rental income. Renters with a principal residence in another country who earn rental income in Austria can now benefit from this rule for the first time. However, their income from rental and leasing must be lower than 55,000 Euros in Austria and lower than
estate sector can benefit from rising rents and, at the same time, accumulate wealth with stability and security. The recent legal amendments which include accelerated depreciation and an extended forecast period create new opportunities for real estate investors to optimise their tax burden and design their invest- ments with greater efficiency.
100,000 Euros worldwide. This rule opens additional opportunities for individual capital investments by foreign investors. The tax amendments in 2024 and 2025 create numerous opportuni- ties for investors.
“Small-scale and large-scale rentals“
The small-scale and large-scale rental of investment apartments ensures that investors who purchase an apartment with VAT can benefit from input tax deductions. According to the rules for small-scale rentals (25 years) and large-scale rentals (30 years), the investor must accumulate an overall surplus with rental income. Any other results lead to classification of the investment as a hobby and, subsequently, to the repayment of input VAT.
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