Stricter taxation on transfers of real estate company shares in Austria as of 01 July 2025

Previously, tax liability was triggered only when at least 95% of the shares in a company were transferred, or when at least 95% of the shares were consolidated in the hands of a single direct shareholder. Effective 01 July 2025, this threshold is reduced to 75%.

The first scenario, involving a change of a direct shareholder, is mentioned here only for the sake of completeness. In this case, the new observation period of seven years should also be noted.

A completely new aspect, however, is the extension of taxation on share consolidations to indirect shareholdings and groups of acquirers (corporate groups). This means, for example, that the sale of a parent company can now trigger GrESt on real estate held by its subsidiary. Introducing a “minority shareholder” or interposing a company to avoid taxation is no longer possible under these new rules.

Since these rules are not limited to Austrian companies, the transfer of shares in a foreign company can also trigger Austrian GrESt if the company holds Austrian property. Due to the new “group of acquirers” concept, consolidation rules apply within a corporate group as well. It is therefore essential to always check whether the group structure contains a company owning Austrian real estate.

The tax base is determined according to the legally prescribed valuation rules (Real Estate Valuation Regulation 2016), which usually result in 60–80% of the fair market value of the property. The tax rate is 0.5%. For example, the acquisition of a hotel near Salzburg with around 80 rooms would lead to GrESt of approximately EUR 30,000.

A much stricter regime now applies to so-called real estate companies. For these, the tax base is the fair market value, and the tax rate is 3.5%. Depending on the circumstances, this may increase the GrESt burden by a factor of 8 to 12.

Under the new law, real estate companies are defined as entities primarily engaged in the sale, rental, or management of real estate. This is assumed if:

• The company’s assets consist predominantly of real estate not used for its own business purposes; or
• The company’s income derives predominantly from the sale, rental, or management of real estate.

Although the legal definition leaves some room for interpretation, many companies will be affected – particularly developers and hotel ownership companies. If shares in such companies are transferred at the parent, grandparent, or higher group-company level, this may result in significant Austrian GrESt costs.

In typical Austrian fashion, however, there is an exception to the exception: where shares are transferred exclusively within the same family, the standard 0.5% tax rate on the real estate value applies (as described above).

This relief applies only if all direct shareholders before and after the transfer belong to the same family, as defined in Austrian law. This includes parents, grandparents, spouses/partners, siblings with their children, as well as biological, adopted, and stepchildren with their spouses, children, grandchildren, etc.

Thus, passing on a real estate company from parents to children falls under the preferential regime. However, if two business partners each transfer their shares in a real estate company to their respective children, the exemption does not apply, since not all direct shareholders belong to the same family.

It is also important to note that this exemption only applies to direct shareholdings. If shares in a parent company are transferred within a family, the higher tax for real estate companies must still be applied.

These rules require a fundamentally new approach for tax advisors in Austria. 

Key takeaways for advisors:

• Threshold lowered: 75% instead of 95%.
• Observation period: 7 years for direct shareholder changes.
• Corporate groups included: Indirect holdings now taxed.
• Real estate companies: Increased GrESt burden by a factor of 8 to 12.
• Family exception for real estate companies: Only for direct shareholders within one family.

Action point: 

For every share transfer, advisors must check whether the group structure contains Austrian real estate, and assess the implications under the new regime.

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Manfred Leitinger has served as tax advisor and partner at Prodinger Leitinger & Partner Steuerberatung, Salzburg, since 1997.