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PROPERTY

EXPLAINED: The rules for buying property in Graz as a foreigner

Buying property as an international resident in Austria is not a standard process across the country, and there is a key difference in the Styrian city of Graz.

the city of Graz, in Styria, Austria
How hard is it to buy property as a foreigner in Graz, Austria? (Photo by Daniela Turcanu on Unsplash)

Graz is Austria’s second largest city (after the capital, Vienna) and attracts people from all over the world to live and work.

But what about buying property as a foreigner in Graz? What are the rules?

Here’s what you need to know before jumping into the property market in the Styrian capital city. 

FOR MEMBERS: EXPLAINED: Property buying rules for international residents in Austria

Who is classed as a foreigner in Austria?

Foreign nationals are defined by the Austrian Federal Government as those that do not have Austrian citizenship.

However, when it comes to buying property, there are varying rules for different foreigners, mostly depending on whether someone is from an EU country or not (rather than whether they have an Austrian passport). 

Property buying rules for EU and EEA citizens in Austria

In Austria, it’s relatively easy for citizens from EU and EEA countries and Switzerland to buy property as a foreigner.

This is because these citizens are granted the same rights as Austrian nationals under EU law.

So this means whether you are an EU citizen already living in Graz as a resident, or you simply want to purchase an investment property in the city, it is possible.

READ MORE: EXPLAINED: How Austria’s new property buying rules could impact you

Austrian rules for third country nationals

In Austria, the term ‘third country nationals’ refers to anyone who is not from an EU member state, an EEA (European Economic Area) country (Iceland, Liechtenstein and Norway) or Switzerland. 

For this group it usually becomes more difficult to buy a home in Austria – even for permanent residents – due to strict property buying rules.

In principle, any permanent residents from a third country in Austria have to go through an authorisation process to gain a special permit that will allow them to buy property. 

The reason for the special permit is to ensure there is sufficient housing available for Austrian citizens and to avoid surging property and land prices from interest by non-EU buyers.

But in Graz, the rules are more relaxed than the national laws, making the process much easier for foreigners wanting to invest in property in the city.

READ ALSO: EXPLAINED: Why Austria’s rising property prices are causing alarm

What is different in Graz?

The biggest difference in the rules for foreigners in Graz is that there is no requirement to gain the special permit to buy property, unlike in other provinces and cities across Austria.

This means, as long as someone is a permanent resident in Graz (and they have the funds), they can buy property – no matter where they are from.

Brits with an Article 50 card

Since Brexit became a reality in January 2021, there has been some confusion in Austria about the rights of British people to buy property in the Alpine Republic, so here’s a brief explainer.

For those in possession of an Article 50 Card – a post-Brexit residency permit that grants British people living in Austria before December 31st 2020 pre-Brexit rights – they are still treated the same as those from EU member states.

FOR MEMBERS: How can British second home owners spend more than 90 days in Austria?

This should apply across Austria and was confirmed to The Local by the British Embassy in Vienna. It was also highlighted by the UK government in its official Living in Austria guide.

As a result, there is no need for British people with an Article 50 card to apply for the special permit to purchase property in Graz, or anywhere else in Austria. 

But for any British people that have moved to Austria in post-Brexit times, they will be considered as third country nationals and subject to the rules detailed above (although not in Graz where the permit is not required).

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PROPERTY

Is now a good time to buy property in Austria?

With reports that demand for property is falling in Austria, could now be a good time to buy? We take a closer look at the data to find out.

Is now a good time to buy property in Austria?

Anyone planning to buy a home in Austria will be aware that prices and demand have been rising over the past couple of years. 

But Austrian broker association Remax is now saying that demand is falling with signs that “the market is starting to turn”.

In the first half of this year, 74,258 newly purchased properties were registered in the Austrian land register (Grundbuch). This is three percent less than during the same period in 2021, according to data from Remax.

FOR MEMBERS: IN FIGURES: Everything you need to know about who lives in Vienna

However, this figure is still 15.7 percent more than in the first half of 2019, which reflects the boom in the Austrian property market since 2020.

Also, despite the number of transactions going down this year, the value is actually up by 10.8 percent to €21.73 billion, which shows property prices are not yet coming down.

Bernhard Reikersdorfer, Managing Director of Remax Austria, said: “The growth was primarily supported by Vienna and Styria, but also by Upper and Lower Austria. 

“This means that real estate trading turnover has increased by a third in the first half of the year since 2019 and 2020, and more than doubled when compared to 2015 and before that.”

‘Inflation is driving up costs’

The Remax report says property market trends in Austria are being influenced by the Covid-19 pandemic, the war in Ukraine, inflation and the energy crisis. 

This has led to a change in prospects for some people, which is being seen as a drop in demand in the property market and a reduction of new construction projects on privately owned land.

READ ALSO: READER QUESTION: When should I turn on my heating in Austria this year?

Anton Nenning, Remax Austria expert, said: “Inflation is driving up the new construction costs – first through the material and now through the staff – and is now gnawing away at the equity capital saved for new acquisitions. 

“This means that many financing transactions that could be processed easily and cheaply a year ago are suddenly a case for selected experts who can still find a way even in tricky situations. For many, however, this simply means a project stop.”

As a result, the market for single family homes in Austria is heating up as they are sometimes cheaper than building a new property on private land. 

What is happening in Vienna?

Austria’s capital city remains the second best performing property region in Austria (behind Lower Austria). The value of all property sales in Vienna increased by one billion in the first six months of 2022, bringing the total to €6.68 billion.

Donaustadt is the best performing property market in Vienna with 1,903 properties sold, followed by Favoriten with 1,096. Donaustadt even overtook Graz and Kitzbühel to record the highest value in property sales.

The five largest real estate transactions in Austria also took place in Vienna during the first six months of the year. 

A plot of land (258,269 m²) in the 22nd district became the country’s most expensive property when it was sold for €86 million.

READ NEXT: Living in Austria: Is Vienna a family-friendly city?

What are the property trends outside of Vienna?

Vienna might be Austria’s capital city, but it doesn’t have the hottest property market in Austria right now. Instead, that title belongs to Salzburg and Styria.

Property sales in Styria are up by 9.2 percent and the overall transaction value has increased by 18.5 percent. In Salzburg, both sales and transaction values increased by 3.6 percent.

In the Alps though, the opposite is taking place with sales down by 10.7 percent in Vorarlberg and by 6.4 percent in Tyrol.

However, Tyrol is still recording some high prices (despite the overall decrease in sales) with the state’s most expensive property selling for €19.6 million in Kitzbühel earlier this year.

Lower Austria is currently the country’s best performing state for the number of sales, although the province recorded a decrease for the first time since 2013. 

The Remax report named Mödling as the most popular district for property in Lower Austria.

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