Steuerberater Innsbruck

Renting Out Property in Austria: What Landlords Need to Know About Taxes

Whether it's an apartment, house, or commercial property – renting out real estate in Austria can be a lucrative source of additional income. However, it also comes with tax obligations. Those who want to declare their rental income correctly will benefit from professional tax advice.

This overview highlights the key tax considerations – and when it makes sense to consult a tax advisor for rental income.

Key tax considerations for renting out property in Austria

1. What Rental Income Is Subject to Taxation?

Income from renting and leasing property in Austria is classified as income from letting and leasing under Section 28 of the Austrian Income Tax Act (EStG). It is subject to income tax in all cases, regardless of the amount.

Landlords who are residents of Austria must declare rental income in their annual income tax return. Foreign property owners with real estate in Austria are subject to limited tax liability and are also required to submit a tax return to the Austrian tax authorities.

Deductible expenses include depreciation, interest payments, maintenance, and property management fees. Tax advisor’s tip: The better your documentation, the greater the potential for tax savings.

2. Taxing Rental Income – A Structured Approach

Austria uses a progressive income tax system – meaning the higher your total income, the higher your tax rate. Income from renting and leasing is added to other sources of income (e.g., from self-employment or employment) and can therefore increase the overall tax rate significantly.

This makes it especially important to carefully document all expenses related to renting and leasing, as these costs reduce the tax base and can therefore significantly lower your overall tax burden.

Acquisition costs of the property can be depreciated over many years (AfA).
Repair and maintenance expenses are deductible either immediately or spread over several years.
Broker fees, loan-related charges, operating costs, and ongoing maintenance are also deductible and can further reduce your tax liability.

We gladly support our clients in identifying and recording all relevant expenses accurately, helping them to maximize their tax savings.

3. VAT: When Does It Apply to Landlords?

In general, many types of income from renting and leasing real estate in Austria are exempt from VAT (§ 6 (1) No. 16 of the Austrian VAT Act/UStG) – for example, the rental of offices, commercial spaces, or warehouses. However, in these cases, no input tax deduction is allowed.

Certain exceptions apply: Residential rentals, hotel accommodations, and campground rentals are subject to the reduced VAT rate of 10%.

4. Can I Save Taxes With the Small Business Regulation?

Austria’s small business regulation (§ 6 (1) No. 27 UStG) exempts entrepreneurs from charging VAT if their annual turnover remains below €55,000 (as of 2025). This means:

No VAT has to be included on invoices.
No VAT returns must be submitted.
However, no input tax deduction is allowed under this rule.

This regulation can be useful for landlords with low rental income and few or no VAT-relevant investments. However, if you’re planning larger investments, it may be wise to opt out of the small business scheme in order to benefit from input tax deductions.

Rent out your property the right way – with us by your side.