Home » National Council: In the future, states will be able to decide for themselves on the type and extent of vacancy taxes (PK0371/04/17/2024)

National Council: In the future, states will be able to decide for themselves on the type and extent of vacancy taxes (PK0371/04/17/2024)

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National Council: In the future, states will be able to decide for themselves on the type and extent of vacancy taxes (PK0371/04/17/2024)

Vienna (PK) – With the aim of reducing vacancies, some federal states are already charging a tax on empty apartments. However, due to a VfGH ruling from 1985, the states’ hands are tied when it comes to the amount of the levy. Now a constitutional change in competence should give the states more leeway. At the start of today’s meeting, the National Council voted with the necessary two-thirds majority for a corresponding constitutional amendment. A supplementary change to the Financial Equalization Act was also approved by the ÖVP, SPÖ and the Greens with the same majority. Criticism comes from the FPÖ and NEOS: They view vacancy taxes as a wealth tax and call for alternative measures to create more living space.

However, a motion for a resolution submitted by NEOS MP Johannes Margreiter regarding the reintroduction of the earmarking of housing subsidies did not find a majority in the vote. The same applies to a motion for a resolution by the SPÖ. This aimed not only at freezing all rents until the end of 2026, but also at introducing an interest rate cap for variable-interest housing loans and the introduction of a wealth and inheritance tax.

Constitutional Minister Karoline Edtstadler emphasized that the proposed clarification of competences does not change the fact that a constitutionally compliant solution is needed for vacancy taxes. The barrier is the principle of objectivity; vacancy charges must be justified.

Massive criticism from the FPÖ and NEOS of the vacancy tax

Specifically, the constitutional amendment passed by the ÖVP, SPÖ and the Greens transfers “the collection of public taxes for the purpose of preventing non-use or under-use” of apartments to the responsibility of the states. This also includes second homes. In addition, a supplementary amendment to the Financial Equalization Act ensures that the states are allowed to collect vacancy taxes even if the federal government decides on similar taxes.

Massive criticism of the constitutional amendment came from both the FPÖ and the NEOS. The FPÖ MPs Susanne Fürst and Philipp Schrangl claimed that this does not contribute to alleviating the housing shortage. In addition, a vacancy tax would interfere with the basic right to property, criticized Fürst. The state has no business what people do with their property, she said. For Fürst and Schrangl, a vacancy tax is nothing more than a wealth tax, and they also expect legal uncertainty due to various regulations in the states.

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The FPÖ is committed to affordable housing and socially acceptable rents even outside of non-profit organizations, said Schrangl. However, it is important to take into account the legitimate interests of both tenants and landlords. A dig into the housing policy mothballs is not a solution. According to Fürst, the reason why housing is becoming more and more expensive is, among other things, because construction costs have “shot up” in recent years, it is becoming increasingly difficult to get loans and there is too little investment in social housing.

NEOS MP Nikolaus Scherak was particularly irritated by the fact that the ÖVP, “as a former economic party”, supports the introduction of new taxes and duties, especially since the tax and duty ratio in Austria has already reached a “record high”. He fears that the constitutional amendment would further aggravate the “complexity of competences” in the housing sector. In the future, the states will be able to introduce vacancy taxes of any amount. It also remains unclear what constitutes underuse of an apartment. For example, Scherak wonders whether someone who has an apartment that is far too large or someone who only uses a residence for a few months a year will also have to pay a tax. According to him, in order to bring more apartments onto the market, a reform of tenancy law would be a more sensible way. The MP also accused the ÖVP and the Greens of “largely ignoring” the comments received in the review process.

Scherak’s parliamentary group colleague Johannes Margreiter has doubts that high vacancy or second home taxes will stand up before the Constitutional Court. After all, there is no general rental obligation, he argued. For him, the fact that there are “too few” social housing units is “a political failure” and not a failure on the part of private property owners. In order to create additional living space, the NEOS advocated reintroducing the earmarking of housing subsidies, but were unable to get a corresponding motion for a resolution. He only received the support of the opposition in the vote.

SPÖ calls for rent and interest caps

On the part of the SPÖ, Julia Elisabeth Herr, Jörg Leichtfried and Selma Yildirim, among others, committed themselves to collecting vacancy fees. If you look at the situation in some cities, such a levy makes sense, emphasized Herr. After all, apartments are there to live in “and not to speculate”. Leichtfried expects that a vacancy tax will bring more apartments onto the market and hopes that this will also reduce rents. In addition, this “basically sensible measure” could revitalize town centers.

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In general, the SPÖ accused the government parties of doing too little to provide affordable housing. Rents have risen by up to 25% in the last two years and have now become the “number one driver of inflation,” claimed Herr and her party colleague Ruth Becher. In this sense, they called for a “real” rent cap.

Specifically, the SPÖ proposed in a resolution that all rents – including freely agreed rents and business premises rents – be frozen until the end of 2026 and that the annual rent increase thereafter be capped at a maximum of 2% per year. She also pushed for an “interest price cap” of 3% for variable home loans up to a loan amount of €300,000. According to Herr, this measure would cost around €900 million to €1 billion, which could “easily” be brought in by skimming off the banks’ excess profits. Ultimately, the banks would “enrich themselves” from the current high interest rates, as their “record profits” in the last two years have shown. Other points in the motion for a resolution concerned the introduction of a minimum interest rate of currently 3% for all bank customers up to a certain deposit amount, the introduction of an inheritance and gift tax for inheritances of €1 million or more and the introduction of a “millionaire’s levy”. However, this received no approval beyond the SPÖ.

ÖVP: The federal government is not introducing any new taxes

The ÖVP MPs Johann Singer and Gabriel Obernosterer rejected the accusation of introducing a new tax. Singer claimed that there is already a vacancy tax in four federal states. The current constitutional amendment simply gives the states more scope for action. According to him, the shift in authority makes sense because different regions have different needs and there are different vacancies. Furthermore, the fundamental right to property should not be interfered with in the future either.

According to Obernosterer, the proposed “clarification of jurisdiction” was a wish of all nine state governors. He also pointed out that the first federal state to introduce a second home tax was Carinthia under a liberal governor. Hans Stefan Hintner (ÖVP) emphasized that municipalities would not receive any revenue shares for people with second homes through financial equalization and would therefore not make any contribution to the costs of the infrastructure.

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Singer also pointed out that the current constitutional amendment is part of a large construction and housing package. The aim is not only to create more affordable living space, but also to stimulate the construction industry and secure jobs. He expects that the planned additional funding for non-profit housing in the amount of €1 billion will trigger investments amounting to €5 billion. Singer also referred to the temporary waiver of the land registry registration fee and the craftsman bonus.

Greens want vacancies to be “taken to task”

“We want to tackle vacancies,” said Green MP Nina Tomaselli, justifying the constitutional amendment. After all, apartments are there to live in, she said, and drew attention to the problem of “desolate” inner cities or deserted winter sports resorts. She believes that many apartments are not rented out due to speculation or out of sheer convenience. Those who suffer are “tens of thousands of people looking for housing,” and the FPÖ is showing them “a hard shoulder.”

Tomaselli’s party colleagues Astrid Rössler, Ulrike Maria Böker and Ulrike Fischer also see vacancy taxes as an important instrument for curbing land consumption and revitalizing town centers. “Vacancy activation” also makes a contribution to climate protection, explained Böker, especially since revitalizing town centers also results in less traffic because more trips can be done on foot. In this context, Rössler also pointed out the high vacancy rate in the commercial and industrial sectors, whereby according to her, twice the area in Salzburg is vacant.

Edtstadler: Vacancy taxes must be justified.

Constitutional Minister Karoline Edtstadler pointed out that affordable housing was a big issue and accused the FPÖ of turning a blind eye to existing problems. According to her, the proposed clarification of competences does not change the fact that the states would have to present a constitutionally compliant solution for any vacancy charges. Of course, a vacancy tax is an interference with property, said Edtstadler, the barrier is the principle of objectivity. Vacancy charges must be justified. (Continuation of the National Council) gs

NOTE: Meetings of the National Council and the Federal Council can also be followed via live stream and are available as video-on-demand in the Parliament media library.

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