(Re-)Introducing Wealth Taxes In Austria: Practical Challenges

• Published date: 18 March 2024
• Law Firm: Schoenherr Attorneys at Law
• Author: Mr Marco Thorbauer and Tobias Hayden

The reintroduction of (additional) wealth taxes is a hot topic in Austria. It comes with major practical challenges, not only for advisors but especially for tax authorities and the Austrian legislator.

Assets and their transfer may already be subject to selective taxation in Austria. While property tax, land value levy and agricultural and forestry taxes are annually recurring wealth taxes for domestic property ownership, real estate transfer tax, the foundation entrance tax and the Austrian stamp duty on assignments relate to the value of single-asset transactions.

Double taxation

The introduction of a wealth tax (annual wealth tax or reintroduction of inheritance and gift tax) may lead to double taxation. In the case of recurring wealth taxes, double taxation may exist in income taxes as well as property tax.

If an inheritance and gift tax are reintroduced, double taxation would occur especially in regard to real estate transfer tax and, potentially, stamp duty. To avoid this, comprehensive tax exemptions would need to be introduced for gratuitous real estate transactions.

If a uniform and progressive tax rate was to apply to all taxable assets, individual asset components would have to be valued consistently and based on reality. Several...