Many clients ask about Inheritance tax in Austria, when it comes to property
and passing onto their family..particularly how does it compare to the UK?
Well, technically there is No inheritance tax. Since August 2008 the inheritance
tax in Austria had been abolished. But when a property is gifted to someone in
a will, it must be registered in the new owner name, so a property transfer tax
and registration costs need to be paid. So what are the amounts?
Well, after the general tax reform, of January 2016 the market value of a
property has been used as the assessment basis in Austria.
So as a guide, the figures are: For the first € 250,000.00 the tax rate is
0.50%, for the further € 150,000.00 the rate is then 2.00%. If there are other
amounts involved, a rate of 3.50% would be charged.Obviously the tax office err
to the higher value side of a property! Not essentially what it would sell for!
So for comparisons we will use the UK model: a £500,000 property in the UK, after the £325,000 allowance
deducted would attract 40% tax on the remaining £175,000 therefore £ 70,000 inheritance tax.
A €500,000 property in Austria would attract 0.05% €1,250 on the first €250,000,
then 2% €3,000 on the next €150,000, then 3.5% €3,500 on the last €100,000.
So a total in transfer tax of €7,750 in Austria as compared to £70,000
inheritance tax in the UK. It is certainly something to consider when investing
in a property abroad and more of a temptation to look at Austria for an investment.
Image by Gerd Altmann from Pixabay