Austria: New Rules For Real Estate Transfer Tax On Share Deals

1     Introduction

In mid-May 2015, the Austrian government published the text of the changes in the country's tax system that will enter into force on 1 January 2016. One aspect of these impending changes that has not yet been subject to wider discussion is a modification in the rules to the Real Estate Transfer Tax ("RETT") on Share Deals.

To date, RETT has only been triggered if one person (or more companies which are either part of the same VAT group pursuant to sec 2 Austrian VAT act – being economically, financially and organizationally incorporated in the other company that it does not have a will of its own - or would be if they had their seat in Austria) acquired all of the shares of a corporation owning real estate in one or several steps. RETT triggered was 3.5% of 3-times the taxable value ("Einheitswert") of the real estate, with a cap at 30% of the market value.

In the course of Austria's Tax Reform Act 2015/2016, increased RETT volumes will also serve as one of the sources to finance reductions in the country's income tax rate. Besides the increase of RETT on transactions between close family members, the finance minister also discovered an additional means of promoting tax revenues by restricting the possibility of avoiding RETT by choosing a share deal.

2     New taxable transactions

2.1  Transfer of shares in a partnership

By definition, a partnership has two or more shareholders. Therefore, the acquisition of all shares by one person has not been possible unless both shareholders belonged to the same VAT group – a fact that was easy to avoid. Even in the case of a GmbH & Co KG (limited partnership with the personally liable partner being a company with limited liability) in which one person purchased all shares in the GmbH and the only limited partnership-share and then had economically 100% of the partnership was considered not to be subject to RETT.

Looking to Germany, the Austrian law will now introduce the rule that the change of at least 95% of the substance of the partnership to new shareholders within five years constitutes a taxable event for RETT. In addition, the new tax law clarifies that shares transferred to a trustee shall be calculated for the benefit of the trustor, thus explicitly excluding the normal trust constructions which have been widely used in the past. However, the new law only looks at the direct shareholders. The draft of the explanatory notes explicitly refers to a minimum of 95% of the "directly held" shares being passed over to new shareholders. Therefore, a change in the indirect shareholding that may occur if the shareholder itself is sold or the ultimate parent of the group is sold should not be an event that triggers RETT under the new law.

The basis for the calculation of the real estate transfer tax of 3.5% is the taxable value ("Einheitswert"), which normally ranges between 5% and 15% of the market value.

The explanatory notes state that this new provision should align partnerships with corporations with respect to RETT. However, this is not completely true, as the requirement that the transfer of 95% of the shares must happen within 5 years does not apply to corporations, for which the law looks at the unification of the shares in one hand and not for the transfer of shares and for which no time limit exists for such a unification of shares.

Basically, the draft text suggests that possibilities might exist to avoid RETT. One would be to transfer just below 95% of the shares in a first step and then to wait at least 5 years to transfer the remaining shares. The second possibility lies in not transferring the shares of the partnership holding the real estate, but rather the shares of the partners in the partnership itself.

2.2  Transfer of shares in a corporation

Here the law will change inasmuch as that RETT is triggered if at least 95% of all shares of the corporation are unified in the hands of a single shareholder. In addition, not only companies belonging to the same VAT group, but also companies belonging to a group of companies ("Unternehmensgruppe") pursuant to § 9 of the Corporation Tax Act ("Körperschaftsteuergesetz") will be treated as one person with respect to the unification of at least 95% of all shares in one corporation. As is the case in partnerships, shares belonging to a trustee will be calculated for the benefit of the trustor.

In contrast to partnerships, no time limit will be applied to when the minimum of 95% is reached. Therefore, it does not matter whether the remaining shares are acquired at a later stage or in the first step.

However, corporations mirror partnerships in that the RETT is only triggered if a direct acquisition takes place. RETT is not triggered in the event of the indirect acquisition of shares in the shareholders of a corporation holding real estate.

In this case too, the basis for calculating the RETT of 3.5% is provided by the property's taxable value ("Einheitswert"). This rate is lower than that established in the law currently in force, whose basis is three times the taxable value.

3     Outlook

It remains to be seen whether there will be changes made to the draft legislation before the law is finally passed by the Austrian parliament that would also hinder the above-mentioned possibilities for avoiding RETT in case of a share deal. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions