The Hills are Alive – with Austrian Property Investment

Landlocked Austria rarely features on a property investor’s portfolio even though the country is Europe’s second most popular destination for skiing. One of the reasons for Austria’s low profile for property investment are the restrictions it places on the ownership of holiday homes, which in some regions has, up until now, been prohibitive. However, the recent relaxation on restrictions for EU nationals, the stunning countryside and the increase in low-cost flights means that Austria now has plenty to offer the investor.

Some regions have long been popular with the Germans and Swiss, particularly the Tyrol, just over the border from Bavaria. For the British, however, Austria was previously little more than the location of the cult film ‘The Sound of Music’. But the introduction of frequent low-cost flights from the UK to Innsbruck, Salzburg and Vienna has sparked British interest, which is now fuelled by the discovery that Austrian ski resort property costs considerably less than similar property in France or Switzerland.

Resort properties cost around €2,000 to €3,000 per square metre – you would expect to pay at least €4,000 in the French Alps. The recent lack of interest in Austria means property prices have escaped the huge hikes seen in other countries, although there have been steady annual rises. According to the Salzburg Economics Chamber, property in resorts rose by 4.5% to 5% during 2008 and prices are forecast to go up by 3% in 2009. These slow but steady increases make for good returns on a medium to long-term investment. In any case, investors in Austria need to look at a minimum of ten years ownership – capital gains tax on the sale of a second home is a huge 34% unless the property has been held for at least ten years when it becomes exempt from the tax.

News submitted by Alison Kane, Obelisk Investment Property

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