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On May the 2^nd, 2025 the Austrian Ministry of Finance published a draft bill implementing several anticipated tax changes which were already announced in the new Austrian government’s working agenda published earlier this year.

The major part of the draft bill is a reform of the Austrian Real Estate Transfer Tax Rules (â€Áè·¡°Õ°Õâ€�) on share deals. The upcoming new provisions are quite complex but here are the major proposed changes:

• In Austria not only the direct acquisition of real property is subject to RETT but also a share deal may trigger RETT if at least 95% of the shares in an entity owning Austrian real property are unified within the hands of one shareholder or shareholders belonging to the very same Austrian tax group. Furthermore, if 95% of the partnership interests of a partnership (owning Austrian real property) are transferred to new partners within 5 years, RETT is levied, as well. In these cases, however, the tax rate is only 0.5% based on the real estate value (to be calculated according to an ordinance issued by the Ministry of Finance) which is usually significantly lower than the fair market value. In case of an asset deal, RETT amounting to 3.5% on the purchase price becomes due.
  • For the calculation of the 75% threshold, publicly traded shares are disregarded.
• As described above, under current law, RETT is only triggered if at least 95% of the shares are transferred or unified. Going forward, this threshold will be reduced to 75%. The above described rule for partnerships will also be extended to companies and the time period will be increased from 5 to 7 years.
• Currently, RETT can only be triggered if the direct shares in a real estate owning entity are transferred/unified. One of the major changes is the extension to indirect shareholder changes.
• At the moment, RETT is also triggered if shares are unified within the hands of shareholders belonging to the very same Austrian tax group (within the meaning of Art 9 Austrian Corporate Income Tax Act). Going forward, tax groups will no longer be relevant. However, RETT shall be triggered if shares are unified within the hands of one person or an “association of personsâ€�.
  • An association of persons is assumed when either partnerships and/or companies are directly or indirectly under the controlling influence of a person.
• Furthermore, another significant change is the increase in the tax rate and the tax base in case of transactions involving so-called â€�real estate entitiesâ€�. Going forward, the tax rate will be 3.5% based on the fair market value (as in case of an asset deal).  Nevertheless, RETT on unifications of shares in “non real estate entitiesâ€� will still be levied at 0.5% based on the real estate value (as described above).
  • A partnership or company is qualified as a “real estate entityâ€� for the purposes of the new RETT rules, if its major business purpose is the sale, rental, or management of real estate.
• The new rules shall apply to transactions after June 30^th, 2025.
• The draft bill does currently not include any provisions on group relief (i.e. exemptions for transactions within a group like for instance under the German RETT-Rules).
• Finally, it should also be noted that the draft bill also provides for a transitional rule. If a person already holds 75% or more of the shares in a real estate owning entity on June 30^th, 2025 and no RETT from the unification of shares was triggered yet, future transactions are subject to RETT under the new rules if the shareholding percentage changes (but does not fall below 75%).

The enactment of the new draft bill is still pending; therefore, there may be changes to the proposed rules. ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Austria will be delighted to keep you updated.