Subsidies for Real Estate Purchase: These Grants You Should Know

The dream of owning a home - whether it's a condominium in the city or a house in the countryside - remains a central life goal for many people in Austria. At the same time, acquiring living space is associated with significant financial burdens, especially for young families or first-time buyers.

To reduce these and facilitate access to property, the federal government, states, and municipalities offer numerous support programs. These differ not only regionally but also depending on whether it is a condominium or a single-family house – for example, in terms of maximum usable living space, the amount of support, or energy requirements. Here is an overview.

Housing Subsidy: Regulation and Eligibility

A central instrument for financing real estate is the housing subsidy, which offers various financial supports for the construction, purchase, or renovation of living space. It is not uniformly regulated nationwide in Austria but is organized at the state level.

There are both federal and state subsidies, which can be granted in the form of loans, grants, or housing allowances. The exact conditions and amounts of support vary depending on the state and support program; for example, the online platform finanz.at provides a calculator and detailed information from the states.

Generally, the support is provided in the form of low-interest loans, one-time grants, or annuity subsidies. The loans are characterized by particularly low interest rates (often below 1 percent) and long terms of up to 30 years. Annuity subsidies reduce the monthly burden of repaying bank loans. In some states – especially in rural areas – additional construction cost subsidies, land grants, or ancillary cost contributions are offered.

To be eligible for the housing subsidy, applicants usually have to meet several requirements:

A good example of the application of these guidelines is the housing subsidy of the city of Vienna, which is available exclusively for the purchase of subsidized condominiums in new buildings. According to the city of Vienna, only projects that are built in cooperation with the city and meet certain structural, social, and ecological standards are eligible for funding – such as barrier-free access, green communal areas, or energy-saving construction methods. The support is provided in the form of a housing loan with fixed interest, which is based on the usable living space and household income. Additionally, under certain conditions, subsidies for operating costs or elevator systems are also granted.

Purpose Grants of the Federal States

In addition to the traditional housing subsidies from the federal states, there are also direct support measures from the federal government, particularly in the form of earmarked grants. These have played a central role in Austrian housing policy since 2024. Specifically, the federal government is providing the states with a total of one billion euros from 2024 to 2026 as part of the so-called Housing and Construction Package. According to the Federal Ministry of Finance (BMF), the funds are allocated to the federal states through Article 15a agreements, with the aim of strengthening affordable housing, promoting renovations, and encouraging home ownership.

The special feature of the earmarked grants is that they are not paid directly to private individuals but are made available to the states to enhance existing or new subsidy programs. This allows these funds to be used flexibly at the state level – for example, to increase housing subsidy budgets, create new grant models for young families, reduce ancillary construction costs, or provide bonuses for energy-efficient construction.

In practice, this looks as follows: A federal state can use these earmarked grants to increase the number of subsidized owner-occupied apartments, raise the subsidy amount per project, or target additional groups – such as young adults, single parents, or returnees to rural areas. In the area of renovation subsidies, funds from the earmarked grant are also used, for example, to enhance thermal renovations with bonus payments or to specifically promote alternative heating systems such as heat pumps.

The conditions for using these indirect subsidies are based, according to the BMF, on the respective subsidy guidelines of the federal state in which one buys or renovates a property. This means: For example, someone who acquires an owner-occupied apartment in a new construction project in Upper Austria may benefit from the fact that part of the construction costs was co-financed by earmarked grants – without seeing this in detail. In Lower Austria, on the other hand, these funds enabled additional one-time grants for young families of up to 10,000 euros (see previous section). Please check with the respective state administration for details.

Even though the earmarked grants cannot be applied for as separate subsidy applications, their indirect benefit for property buyers is considerable, as they expand the scope of the states and contribute to the improvement of existing subsidy models. Especially in light of increased construction and financing costs, they make an important contribution to social cushioning.

An overview of the use of these funds and the specific measures for each federal state is regularly provided by the Ministry of Finance. Banks and housing subsidy offices can also provide information during consultations on whether a project could benefit wholly or partially from these federal funds.

Subsidies for Young Families

A central concern of the current housing subsidy policy in Austria is the targeted support of young families in acquiring property. Given rising construction costs, high interest rates, and the difficulty of obtaining equity, entering home ownership is particularly challenging for young households. For this reason, the federal government's Housing and Construction Package and the earmarked grants to the states include several measures specifically tailored to young families, which have been implemented in concrete subsidy models at the state level, as detailed on the online platform treffpunkt-finanzieren.at.

The definition of "young family" is not uniformly regulated nationwide but is based on the guidelines of the respective federal state. In most cases, a household is considered a young family if:

An example of a specifically implemented measure from the Housing Package is the one-time grant in Lower Austria, introduced in 2024: Young families who acquire a home or an owner-occupied apartment and take out a bank loan for it receive 5 percent of the loan amount (up to a maximum of 10,000 euros) as a non-repayable grant. This grant is intended to reduce the equity ratio and lower the credit burden. Both new constructions and the acquisition of existing properties are eligible for funding, provided they are used as the main residence. Other federal states implement the grants differently: In Upper Austria, for example, the interest subsidy for young families was increased as part of the Housing Package, significantly reducing the effective burden from the state loan in the first ten years. In Carinthia, the subsidy loan for young families is supplemented by additional child allowances: For each child living in the household, the subsidy amount is increased by a fixed surcharge.

The subsidies often distinguish between condominiums and single-family homes. For example, construction cost subsidies or land discounts are more frequently intended for home purchases – especially in rural areas, to counteract migration. Condominiums, particularly in subsidized new construction projects, often benefit from fixed purchase prices, additional housing loans, or reduced minimum equity. It is important: Subsidies for young families must generally be applied for before or immediately after the purchase contract is concluded – retroactive funding is rarely possible. Additionally, many subsidy models must be combined with an equity share – in practice, this often means that about 10 to 20 percent of the total costs must be self-financed.

According to the BMF, anyone looking to purchase an apartment or house should definitely inform themselves early on about the current subsidy models at the housing subsidy office of the federal state. Currently, these programs are also being additionally funded by federal earmarked grants in many places, which in some cases leads to temporary bonus payments or special conditions.

Financial Support for Renovations

After the abrupt stop in December 2024, the government has announced the resumption of the renovation offensive. By 2030, the replacement of heating boilers and the thermal renovation of buildings will be subsidized with 1.8 billion euros. New is that only up to 30 percent of the total costs will be subsidized, compared to up to 75 percent in the old model. Funding applications can be submitted from mid-November at https://www.sanierungsoffensive.gv.at/. Services carried out from October 3rd are already eligible for retroactive funding. A combination with state subsidies remains possible to enhance the overall funding.

As with the previous renovation offensive, there are two instruments: the "Boiler Replacement" (formerly: "Get Out of Oil and Gas"), which promotes the switch to environmentally friendly heating systems, and the "Renovation Bonus" (name unchanged), which supports the replacement of windows or facade insulation. Both instruments are financed from the same subsidy fund.

The funding of energy-efficient renovation measures in Austria is currently strongly influenced by the federal states' own programs. For example, the city of Vienna offers subsidies for thermal-energy renovations through the wohnfonds_wien. Measures such as insulation of the building envelope, replacement of windows and exterior doors, and the switch to climate-friendly heating systems are subsidized. The amount of funding varies depending on the measure and type of building, with non-repayable grants of up to 1,500 euros, but no more than 50 percent of the eligible costs. Further information and advice are provided by the wohnfonds_wien's Hauskunft service center.

The state of Lower Austria also supports renovation measures with an annuity subsidy of 4 percent of the eligible renovation costs over ten years. Both comprehensive renovations with an energy certificate and individual measures without an energy certificate are subsidized. Detailed information can be found on the website of the state of Lower Austria.

For information on further funding opportunities for renovation projects in the federal states, it is advisable to check the individual programs and requirements of the respective state governments (information can be found on the respective state website) and, if necessary, to seek energy advice.

Tax Reliefs for Real Estate Purchases

In addition to direct subsidies and grants, buyers of residential real estate in Austria currently also benefit from a range of tax reliefs that can significantly ease the acquisition – especially for owner-occupiers.

A central measure concerns the exemption from fees for residential properties acquired for personal use, effective from April 1, 2024. This legal regulation stipulates that when purchasing condominiums or single-family homes, no registration fee in the land register (normally 1.1 percent of the purchase price) and no mortgage registration fee (1.2 percent of the loan amount) will be due – up to a property value or assessment basis of 500,000 euros. The fee exemption applies exclusively to the first acquisition of homes to establish a primary residence and is currently limited until June 30, 2026. To benefit from this relief, a corresponding registration certificate is required, proving that the property is occupied by the buyer, as reported by the online marketplace ImmoScout24.

Furthermore, the government program includes the plan to abolish the real estate transfer tax for the first-time acquisition of homes. So far, this tax amounts to 3.5 percent of the purchase price. The exact design of this relief is currently still being developed – implementation could follow from 2026.

However, from July 1, 2025, new tax tightening will also come into effect: Anyone who has a plot of land rezoned into building land after December 31, 2024, and then sells it, will in the future have to pay a 30 percent rezoning surcharge on the capital gain. The aim of this measure is to increasingly tax speculative gains from rezoning and curb land speculation.

Also from July 2025, the real estate transfer tax will be newly regulated for so-called share deals. While previously the real estate transfer tax was only triggered when 95 percent of the shares in a property-owning company were transferred, this threshold is now being lowered to 75 percent. This is intended to prevent real estate purchases from being tax-advantaged through corporate structures.

Another tax policy initiative concerns the input tax deduction for luxury properties: As part of the current tax reform, it is planned to restrict the possibility of input tax deductibility for particularly high-priced real estate projects. The exact definition of the term "luxury property" is currently being legally specified. This measure is primarily intended to prevent abuse in project developments and high-priced investments.

Overall, it is clear: Whether apartment or house – subsidies can significantly facilitate the purchase of real estate. While buyers of condominiums often benefit from subsidized developer projects, additional opportunities open up when purchasing single-family homes, such as through energy renovation measures or municipal grants in rural areas. It is important to obtain early and comprehensive information about the respective responsible funding agencies and to precisely adhere to the application deadlines.

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