Austria’s property market is an increasingly attractive option as the interest rates are currently at historic lows. Mortgage finance is readily available in Austria with the banks typically lending up to 60% of a property’s value.
How Much Can I Borrow?
Banks have different ways of accessing your ability to repay but typically, loans of 3-5 times your income are the most frequent. It is also possible to extend a mortgage to cover renovation costs, also known as a Bauspar mortgage; the bank will lend you the required amount to purchase and renovate the property.
Fixed interest rates in Austria that last 5-10 years are becoming increasing common while variable interest rates, that track Euribor rates, are also readily available.
Although the process for applying for a mortgage is relatively simple and you can get an offer almost immediately, it can take a few weeks for the mortgage to be agreed and the application accepted. It is usual for the mortgage lender to carry out a property valuation; this is free of charge or will be included in the cost of applying for a mortgage.
Repayments
Some lenders offer a reduction on interest rates for the first year or interest only repayments for a year, known as teaser rates and although can be helpful to allow you to get settled in your first year, after the initial period the lenders standard rate applies and this could be significantly higher.
Property Transaction fees
1. Property transfer fee -3.5%
2. Notary fees – 3%
3. Ownership registration – 1%
4. Stamp duty – 1%
5. Land registry fees – average cost of €400
6. VAT – 20%
When buying a property in Austria transaction costs are reasonably low and typically not included in the mortgage, lenders will charge around 2% of the loan value in fees. There is also a 2% fee for the registry of the mortgage deed, this may or may not be included in the initial estimate.
Taxes
Taxes include property tax which is between 0.4%-0.9% of the property value, and capital gains tax has recently been reduced to 25%.
Currently, fixed and variable rates for your Austrian property mortgage are available from just 1.9% (July 2015) and a 20 year term is typical.
Documents Required
Lenders will require the following documents:
1. Passport and a copy of the passport
2. A copy of the signed contract of purchase sale
3. Proof of income
4. Proof of deposit funds
Please contact us about our Austria mortgage advisors for further information.
Contact Mark Warner Property
