Goodbye to bureaucracy! Communities receive direct access to investment funds

Goodbye to bureaucracy! Communities receive direct access to investment funds

Austrian municipalities are facing significant relief in the processing of investments. The amendment to the municipal investment program (KIP) will make the payment of investment grants for smaller municipalities much easier. This was decided by the federal government in agreement with the Austrian Association of Cities and the Austrian Association of Municipalities. One of the fundamental changes concerns the previous co-financing requirement: municipalities that receive KIP funds no longer have to raise their own funds, which drastically improves the framework conditions for applications.

Previously, co-financing of 20 to 50 percent was a major hurdle for smaller communities. Many of these communities have had difficulty accessing the funds they need due to high bureaucratic and financial requirements. “The amendment offers direct and unbureaucratic help for investments in communities,” says community association president Johannes Pressl, describing the innovations. The aim of the reform is to support urgently needed investments and thus sustainably improve the infrastructure in the communities.

Financial resources and their use

Overall, significant funds are available for the coming years: 211 million euros are planned for 2025, 320 million euros in 2026, 290.8 million euros in 2027 and 60 million euros in 2028. The amount of funds and their distribution to the individual communities and investment areas remain unchanged. This year, the local government will receive around 50 million euros, which reflects the tense budget situation for the federal, state and local governments, as Finance Minister Markus Marterbauer emphasizes.

One of the greatest reliefs is that the funds are now sent directly to the communities without any application and without the previously necessary accounting. Reporting on the use of funds is only made to the local council. This significantly reduces the administrative burden at both the federal and local levels

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The responsibility of the communities

Pressl also emphasizes the responsibility of municipalities in dealing with tax money. He points out that efficient use of funds should be promoted through community cooperation. “Municipal cooperation should be discussed in reform talks with the federal government,” explains Pressl.

The changes will be part of the 2025 Budget Accompanying Act and will be submitted to the National Council for parliamentary consideration. After the resolution has been passed in the National and Federal Councils, the Federal Ministry of Finance will inform the municipalities about further details, in particular the transfer amounts and dates. Information about new financial allocations can be sent directly to the Federal Ministry of Finance.

The comprehensive changes in the KIP represent a decisive step in setting the course for a future-oriented investment policy in the municipalities that meets the requirements for modern infrastructure.

For further information on the innovations and allocations in the municipal investment program, we refer to the reporting by kommunal.at and to the details on the website Federal Ministry of Finance.