Real estate transfer tax increases: This makes selling real estate more expensive!

Real estate transfer tax increases: This makes selling real estate more expensive!

Finance Minister Markus Marterbauer recently presented significant measures to adjust the taxation of property sales. The main aim of these adjustments is to close tax loopholes in large real estate transactions, especially in so-called share deals. These sales, in which shares are transferred to companies that hold real estate, have often been tax-advantaged. Loud Small newspaper These measures are expected to bring in revenue of 45 million euros this year and even 135 million euros in 2026.

A central component of the new regulations is the increase in the real estate transfer tax (GrEst) and the introduction of a rezoning surcharge. The rezoning surcharge is 30% of the sales profit if properties are converted from grassland or arable land to building land. This change will come into force for sales from July 1, 2023 if the rezoning takes place from January 1, 2025. An example illustrates the effects of this regulation: A property that was originally purchased as grassland for 10,000 euros and sold for 100,000 euros would achieve a capital gain of 90,000 euros, which leads to a rezoning surcharge of 27,000 euros, which, however, must be reduced to 10,000 euros because the income exceeds the sales proceeds.

Changes to property transfer tax

The new regulations on real estate transfer tax primarily affect real estate companies and lead to a significant increase in the tax burden. How BDO reported, the preferential treatment in the assessment basis is abolished and replaced by the market value. The tax rate increases from the previous 0.5% to 3.5%. In addition, the threshold for tax liability for share deals will be reduced from 95% to 75%, which means that tax liability arises even if a share transfer of more than 75% is made within seven years.

These new regulations cover a wide range of corporate forms, including legal partnerships, corporations and cooperatives. Exceptions only apply to share transfers within the family as well as to reorganizations and the contribution of real estate to companies.

Reallocation gains and transitional regulations

The taxation of reclassification profits will also be tightened; the new tax regulations for this area apply to sales that take place from July 1, 2025, provided that the reclassification takes place from January 1, 2025. The reclassification surcharge of 30% will be applied to positive income from the sale of reclassified properties if the income exceeds the sales proceeds.

However, the previous regulations will remain in place for transactions carried out before July 1, 2025. These transitional regulations are important for real estate transactions that are finalized before the new laws come into force.

Overall, it shows that with these measures the federal government wants to create a stricter framework for the taxation of real estate sales in order to close tax loopholes and ensure fairer taxation.