In Austria, letting property — whether houses, apartments, or subletting — is recognized for tax purposes as income from the rental of immovable assets. ‘Immovable property’ means buildings or parts of buildings held as private assets (not as business property); rental regulations do not extend to movable assets like vehicles or boats.
Rental income is taxed differently depending on whether you are an individual or a company. Individuals pay income tax on rental income, while companies pay corporation tax at 23% based on total annual profit.
The calculation of income tax for individuals in Austria is based on total income (including rental income) after deduction of allowable expenses and other tax-deductible items. These include, in particular, documented expenses that are directly related to the income, such as property insurance, loan interest, maintenance and operating costs, as well as depreciation of furniture and fittings.
There is no uniform general maximum limit of 25% of income for such rental-related expenses. Income-dependent limitations around an annual income of approximately EUR 60,000 primarily concern certain “top special expenses” (for example older insurance contracts or costs for creating residential property), but not the usual deductible expenses in the context of renting and leasing.
Personal income tax rates are progressive:
| Up to 13.308 € | 0% |
| 13,308 € – 21,617 € | 20% |
| 21,617 € – 35,836 € | 30% |
| 35,836 € – 69,166 € | 40% |
| 69,166 € – 103,072 € | 48% |
| 103,072 € – 1,000,000 € | 50% |
| Over 1,000,000 € | 55% |
Example: With €40,000 in annual taxable income, total tax will be €7,593.1 — calculated tier by tier according to the applicable brackets:
| 13,308 x 0 % | 0 Euro |
| 8 309 x 20 % | 1,661.8 Euro |
| 14,219 x 30 % | 4,265.7 Euro |
| 4,164 x 40 % | 1,665.6 Euro |
| Total tax: | 7,593.1 Euro |
To pay tax, a landlord must register with the local tax authority (using FinanzOnline), obtain a taxpayer ID, and file online returns by June 30 (or by April 30 in paper form) for the previous fiscal year.
Key deductible items include repairs, insurance, and depreciation (amortization). Actual expenses for repairs/insurance must be documented, but depreciation is strictly regulated: Land cannot be depreciated, and for ‘new’ buildings the rate is 1.5%, depending on date and usage. For initial letting of ‘old’ buildings after January 1, 2013, depreciation follows §§7 and 8 of the Austrian Income Tax Act. When buying a building already let, the new owner carries forward the previous owner’s depreciation basis.
Commercial office lease contracts must be registered and are subject to a 1% stamp duty based on 36 months’ rent. Example: Five-year lease at €1,000 monthly (including VAT): €1,000 × 36 = €36,000; 1% results in a €360 fee.
