Austria’s Ministry of Finance (BMF) has released the draft Budget Accompanying Act 2025 (BBG 2025) on 2 May 2025. The Budget Accompanying Act 2025 is presently awaiting parliamentary approval.

The proposed key tax measures include amendments to VAT, real estate transfer tax, income, amongst others.

Real estate transfer tax

  • Stricter regulations are being proposed for share deals, specifically the transfer of shares in partnerships and corporations that hold real estate.
  • Reforming share consolidation in real estate transfer tax is aimed at creating parity between asset deals and share deals in real estate transactions.
  • A real estate transfer tax (RETT) is triggered when 75% (previously 95%) of shares in a partnership or company are transferred to new shareholders within seven years. These changes won’t be applicable to publicly traded corporations due to the untraceable nature of stock market transfers.
  • Indirect share transfers will be included in the future. Transfers of company assets or shares, involving the company’s assets or the company itself, will fall under this provision if the transfer results in at least 75% of all shares being directly or indirectly consolidated under the ownership of a single individual or group.

Value added tax (VAT)

  • Adjustments to the flat-rate input tax allowance have been introduced.
  • Effective from 1 January 2026, contraceptives and feminine hygiene products will be exempt from VAT.

Private foundation tax rate increase

The tax rate on donations to private foundations will increase from 2.5% to 3.5%, effective from 1 January 2026.

Income tax

The 2025-2029 government programme includes measures such as increasing taxation on real estate income gains. A 30% rezoning surcharge will apply to gains from the sale of rezoned land. This surcharge is added to the calculated gain or income. If the sale results in a loss, no surcharge applies.

In addition, broadening the scope of the basic flat-rate tax (lump-sum deduction of business expenses) has also been proposed for the assessment years 2025 and 2026. The annual revenue threshold will rise from EUR 220,000 to EUR 320,000, and lump-sum business expenses will increase from 12% to 13.5%. From 2026, the threshold will reach EUR 420,000, with expenses at 15%.

Gambling taxes

Higher concession fees and increased gambling fees for select lotteries have been introduced.