On 13 May 2016, the Austrian Ministry of Finance provided guidance on certain aspects of the recently introduced real estate transfer tax provisions, in particular with respect to the acquisition of 95% or more of the shares in a company owning Austrian real estate by one single acquirer or by a group of companies together. 

The Austrian Real Estate Transfer Tax Act was fundamentally amended as of 1 January 2016; this includes subjecting the acquisition of 95% or more of the shares in a company (being a corporation or a partnership) directly owning Austrian real estate to real estate transfer tax. Moreover, shares held by a trustee will be attributed to the truster. beginning on this date. Finally, even the acquisition of 95% or more of the shares in a company holding Austrian real estate by two or more companies may trigger real estate transfer tax if these companies form a tax group as defined in sec. 9 of the Austrian Corporate Income Tax Act. These newly introduced rules have given rise to questions from taxpayers on their interpretation, which the Austrian Ministry of Finance answered in a recent notice. The most important points shall be outlined in the following: 

  • Structures which have not been subject to real estate transfer tax (due to a shareholding of e.g. only 99%) may trigger real estate transfer tax upon the next transfer of shares. 
  • Real estate transfer tax is triggered if the majority shareholder owning 95% or more of the shares in a company holding Austrian real estate sells or acquires shares in such a company and, as a result of this transaction, his shareholding amounts to 95% or more. 
  • The acquisition of shares in a company owning Austrian real estate and the establishment of a tax group within the same tax year triggers real estate transfer tax if the group members ultimately hold 95% or more of the shares in the company owning Austrian real estate. 
  • If a tax group is established in a subsequent year, no real estate transfer tax is triggered. 
  • If a tax group already exists at the beginning of 2016 and if it holds 95% or more of the shares in the company owning Austrian real estate, any transfer of these shares within the tax group will trigger real estate transfer tax. 
  • No real estate transfer tax will be triggered if the minority shares in a company holding Austrian real estate are purchased or sold by persons other than the shareholder owning 95% or more. 
  • Reorganisations may trigger real estate transfer tax if the principal shareholder subsequently owns 95% or more of the shares in a company holding Austrian real estate. 

The guidance was issued on and applies as of 13 May 2016. In view of these new provisions, any transactions involving shares of companies which hold Austrian real estate must be examined thoroughly from an Austrian real estate transfer tax perspective.