Austria: Overview of the changes in RETT
As of July 1, 2025 the Austrian Real Estate Transfer Tax (RETT) Act was amended. The changes significantly tighten the taxation of share deals involving real estate-owning companies and have far-reaching practical implications, including for individuals who directly or indirectly hold shares in companies that own real estate in Austria. In particular, two taxable events have been substantially expanded, and an increased RETT rate and tax base has been introduced for share deals involving so-called “real estate companies”.
Taxable event: “change of shareholder”
Until the amendment, a share deal involving a real estate-owning partnership was generally subject to RETT if at least 95% of the shares were transferred to new partners within a five-year period. This taxable event has now been amended as follows:
- The threshold has been lowered from 95% to 75%.
- The observation period has been extended from five to seven years.
- The taxable event now applies to both partnerships and corporations.
- Listed shares are exempt from the threshold.
Taxable event: “unification and transfer of shares”
This taxable event was originally triggered when at least 95% of the shares in a real estate-owning company were transferred to, or consolidated in the hands of, a single acquirer or a corporate group under Austrian CIT law. The following changes have been made:
- The threshold was likewise reduced from 95% to 75%.
- The taxable event now includes both direct and indirect share transfers.
- The taxable event now refers to a single acquirer or an acquirer group. The acquirer group essentially corresponds to the Austrian concept of a group, but it also includes the ultimate natural person at the top of the structure.
- An exception for “group reorganisations” was introduced. This clause excludes certain intra-group restructurings if all parties belong to the same acquirer group.
An indirect transfer of shares is deemed to occur when the shares of a company higher up the ownership chain – such as a parent or grandparent company – are transferred rather than the shares of the real estate-owning company itself. Therefore, it is also possible that a share transfer carried out abroad may trigger RETT in Austria.
Increased RETT for “real estate companies”
A company is covered by this newly defined term if its assets mainly consist of real estate not used for its own operational activities or if its income is predominantly generated from selling, renting, or managing real estate. Transfers of shares in such entities are taxed on the fair market value of the real estate and are subject to an elevated 3.5% rate, thereby effectively aligning share deals of such companies with asset deals for RETT purposes. However, if the share deal takes place within the close family circle the (lower) standard property value and the tax rate of 0.5% apply.
Conclusion
The reform of the RETT in Austria brings considerable changes for shareholders of companies that own Austrian real estate. Going forward, these new regulations must be observed especially in cases of share transfers to the next generation, restructurings, or targeted disposals in order to avoid unnecessary tax burdens. It should also be noted that several interesting questions of interpretation - particularly concerning the concept of a real estate company - are still open.
