Structuring cross-border real estate investments in Austria:  Tax, legal and ESG trends 2025

Tax structuring and international investment vehicles 

One of the key decisions for investors is choosing the optimal investment vehicle. Austrian limited liability companies (GmbHs) offer legal certainty and internal financing advantages, while partnerships (e.g. GmbH & Co. KG) allow for more flexible tax treatment, particularly in loss utilisation. 

In 2025, real estate share deals face increased scrutiny. Austria is discussing reforms to apply a real estate transfer tax (Grunderwerbsteuer) to significant shareholdings. The current threshold of 95% for triggering real estate transfer tax on transfers of shares in property-owning companies is to be reduced to 75%, similar to Germany’s model. Additionally, Ultimate Beneficial Ownership (UBO) disclosure obligations under the Beneficial Owners Register Act (WiEReG) are being more tightly enforced. For cross-border investors and fund structures, this means more rigorous compliance and transparency obligations. 

ESG compliance becomes mandatory 

With the EU Taxonomy Regulation and Corporate Sustainability Reporting Directive (CSRD) now in force, ESG is no longer optional. Institutional investors must assess sustainability risks and metrics during due diligence. Energy efficiency, carbon footprint, physical climate risks (e.g. heat stress, flooding), and tenant engagement are all key metrics for investment decisions. 

Not only new developments but also existing properties must align with ESG standards. This leads to increased capital expenditure for retrofitting but also opens new opportunities in sustainable real estate. In 2025, asset managers with ESG expertise play a critical role throughout the transaction lifecycle. 

Alternative asset classes and investment models 

Investors typically use GmbHs, real estate funds, or project-specific joint ventures. Interest is rising in alternative real estate segments such as data centres, care homes, green logistics, and affordable housing models, which are considered resilient and future-proof. Sale-and-leaseback transactions are also gaining traction, offering liquidity to corporates and predictable returns for investors. These deals require precise legal structuring, including lease terms, adjustment clauses, and buy-back rights. 

Transaction law and regulatory compliance

Cross-border deals require a strong understanding of Austrian contract, tax, and land registry law. The 2025 tightening of anti-money laundering (AML) rules and Know Your Customer (KYC) checks imposes stricter documentation and advisory duties on legal and tax consultants. 

As a result, international firms increasingly partner with local experts to provide end-to-end transaction support – from due diligence to notarised closings. Austria’s real estate sector demands a coordinated legal, tax, and ESG approach for successful investment. 

Conclusion

Austria remains a top-tier market for international real estate investors. Yet in 2025, the path to success requires well-structured, ESG-compliant and regulation-proof investment strategies. Those who anticipate legal, tax, and sustainability issues early will secure long-term returns and stability in a competitive environment. 

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Mario Kapp was the sole founder of the law firm in 2006. He is also the Managing Partner and specialises in bankruptcy law, corporate law, and business restructuring. 

Raffaela Lödl-Klein is a Partner at KAPP & PARTNER Rechtsanwälte GmbH, and specialises in real estate and corporate law. She joined the firm in 2013.