According to the national law, Austrian RETT is triggered not only if an Austrian real estate is transferred, but also if at least 95% of the shares in a property owning company are transferred or consolidated in the hands of one single owner. The Annual Tax Amendment Act 2018 now clarifies also that shareholders are not regarded as property owners, thus indirect share transfers do not trigger Austrian RETT.
Pursuant to the Austrian Real Estate Transfer Tax (RETT) Act, RETT is also triggered if at least 95% of the shares in an Austrian property owning company are transferred or consolidated in the hands of one single owner. Such tax consequence is equally triggered if at least 95% of the shares in a real estate owning company are acquired or owned by corporations which are part of a tax group for Austrian corporate income tax purposes. For the transfer/unification of at least 95% of the shares in a property owning company, the tax rate amounts to 0.5% of the real estate value (Grundstückswert).
It has to be mentioned that the real estate value may be assessed in three different ways. First, it may be calculated according to a decree published by the Austrian Minister of Finance with approval of the Austrian Chancellor, either based on the Valuation Act (Bewertungsgesetz) or on price comparison lists (published by Statistics Austria). However, the taxpayer may also prove that the actual fair market value is below these values. That means, the real estate value is limited to the actual fair market value.
Clarification on Austrian RETT
It was a disputed question among commentators whether only direct share transfers or also indirect share transfers can trigger Austrian RETT. The Annual Tax Amendment Act 2018 clarifies that the property is not allocated to the entity/shareholder pooling the shares for real estate transfer tax purposes; in other words shareholders are not regarded as property owners. Therefore a mere indirect transfer of shares in a real estate owning entity does not trigger – in contrast to Germany – Austrian RETT.
If you would like to know more about the Austrian Real Estate Transfer Tax Act or about the Annual Tax Amendment Act 2018, please visit the homepage of WTS Austria!