Vienna is pushing for a tax on vacant apartments

Austria’s capital has a reputation for being a city of affordable housing and local authorities want to do everything they can to continue the practice

Recently, local authorities in Vienna have started to push for the establishment of a vacant property tax. In essence, this means that people who own apartments in the city, where no one is living and they are not on the rental market would be subject to a new property tax. The idea is to create more incentives for owners to increase the supply on the rental market.

City Councilor for Housing Kathrin Gaal and City Councilor for Finance Peter Hanke are spearheading the initiative via an official letter to the federal government, pushing for the adoption of the new policy. The letter is directed specifically towards the Ministry of Finance, Economy, Justice and Social Affairs and it proposes closer talks and collaboration between the local and national government to establish a fair and robust law.

The two city councillors also express Vienna’s natural and longstanding focus on providing affordable housing and strengthening the housing stock, providing better options for citizens.

Dusting off a 40-year-old practice

The city of Vienna actually used to have a vacant property tax back in the 1980s, however, it was repealed in 1985. The Austrian Constitutional Court ruled that the state did not have the proper authority to issue a law that could be seen as an infringement on private property rights. In fact, they ruled that this type of regulation could only be implemented by the federal legislature.  

Now, more than 30 years later, other federal states such as Tyrol are also looking into the viability of a vacant property tax, and the Viennese government want to give it a second try.

According to the latest survey on the vacancy rate in Vienna, from six years ago, there are a total of 35,000 empty units. City officials explained that they see no need to commission a newer survey, as negotiations on a possible law are not yet in sight.

A spokesman for Councilor Gaal declined to give a number on the new tax propositions, and passed the ball over to the federal government, as they would have the vital role in determining what would constitute adequate compensation.

The spokesman pointed out, however, that it would need to be enough so that renting out property can be more attractive than holding onto it.