Austrian Inheritance Tax 2026 — Abolished, Property Levies

TL;DR — Five Key Numbers

• Spouse / children exemption: 100% — Austria has no inheritance tax since 1 August 2008.
• Top rate (general inheritance): 0% — abolished by the Constitutional Court (VfGH) ruling and the 2008 reform.
• Grunderwerbsteuer on inherited property: 0.5% on the first €250,000, 2% on €250,001–€400,000, 3.5% above €400,000 of the Grundstückswert (special property valuation).
• Per-event gift reporting threshold: €50,000 between non-relatives or €15,000 between close relatives per 5-year rolling window — Schenkungsmeldegesetz.
• Filing deadline for property transfer: 1 month from inheritance acceptance for Grunderwerbsteuer self-declaration.

Austria abolished Erbschaftsteuer (inheritance tax) and Schenkungsteuer (gift tax) with effect from 1 August 2008, following a Constitutional Court (VfGH) ruling in 2007 that found the valuation rules underlying both taxes to be unconstitutional. The legislature chose not to repair them and let both taxes lapse. What remains is Grunderwerbsteuer (real estate transfer tax) on inherited or gifted real estate, and a gift reporting obligation under the Schenkungsmeldegesetz.

Legal Framework

The historic Erbschafts- und Schenkungssteuergesetz 1955 ceased to apply to inheritance events after 31 July 2008 following:

• VfGH ruling G 54/06 (7 March 2007) on inheritance tax,
• VfGH ruling G 23/07 (15 June 2007) on gift tax,
• Both holding the valuation framework unconstitutional and giving the legislature until 31 July 2008 to remedy. Parliament let the deadline expire.

The remaining levies on inheritance-adjacent transactions are:

• Grunderwerbsteuergesetz 1987 (GrEStG) — property transfer tax, modified by the 2016 reform to apply progressive rates to family inheritances based on the Grundstückswert (a special tax-assessed property value).
• Schenkungsmeldegesetz 2008 — mandatory reporting of gifts above certain thresholds, with no tax due but penalties for non-reporting.
• Stiftungseingangssteuer — 2.5% (or 25% for non-transparent foreign foundations) on transfers into Austrian or foreign private foundations.

The tax authority is the Bundesministerium für Finanzen (Federal Ministry of Finance), operating through local Finanzämter.

Heir Classes Table (2026)

Without an inheritance tax, Austria has no formal heir classes for tax purposes — but the Grunderwerbsteuer distinguishes between family members (begünstigter Erwerberkreis) and others when inherited property changes hands.

The 2016 GrEStG reform broadened the family-rates circle for inheritance transfers, capturing siblings and (case-dependent) nephews/nieces under the favourable progressive scale.

Allowances and Specific Reliefs (Property Transfer Side)

Grundstückswert valuation: for family transfers, Grunderwerbsteuer is calculated on the Grundstückswert — a formula-based tax value typically 30–50% of market value, computed from cadastral data, land area and building characteristics. This is significantly below market value, materially lightening the GrEStG burden.

Progressive family scale (2026):

The progression resets per acquirer per transferor over a 5-year window — multiple inheritances from different testators are aggregated only within this perimeter.

Family-business succession: the GrEStG does not provide a specific business-asset exemption, but the Grundstückswert valuation favourably treats operating business real estate. Combined with the abolition of Erbschaftsteuer, Austria is among the most attractive EU jurisdictions for inter-generational family business transfer from a tax perspective.

Privatstiftung route: Austrian private foundations (Privatstiftung) remain a planning vehicle. Transfers into a Privatstiftung pay 2.5% Stiftungseingangssteuer (foundation entry tax). Subsequent distributions to beneficiaries are subject to 27.5% Kapitalertragsteuer. Used for multi-generational wealth concentration and asset protection.

Rates

Austria has no inheritance-tax rate. The relevant remaining rates are:

Filing Process and Deadlines

No inheritance tax declaration is required since the tax was abolished. However, several filings remain in force for inheritance events:

Grunderwerbsteuer self-declaration: within 1 month of inheritance acceptance or notarisation of the property transfer, the heir (typically via the involved notary or lawyer) files a GrEStG self-declaration with the competent Finanzamt. Payment is due with the declaration. The notary will normally handle this as part of the Grundbuch (land register) entry.

Gift reporting (Schenkungsmeldegesetz): for gifts received in a 5-year rolling window:

• €50,000 threshold for transfers between non-relatives,
• €15,000 threshold for transfers between close relatives. Reporting deadline is 3 months from the gift. No tax is due, but failure to report attracts fines of up to 10% of the unreported value (capped at €30,000 per case).

Erbantrittserklärung / Verlassenschaftsverfahren: the formal succession proceedings (probate equivalent) handled by the Gerichtskommissär (court-appointed notary) typically conclude within 6–12 months. The Einantwortungsbeschluss (probate decree) is the trigger for property registration and any GrEStG filing.

Late filing / payment: the Bundesabgabenordnung (BAO) provides standard surcharges and interest for any late GrEStG payment.

Specific Reliefs

Land register fee (Eintragungsgebühr): the 1.1% land register fee for property transfers on inheritance is calculated on the Grundstückswert (same favourable base as GrEStG) for family acquirers, rather than market value.

Family business succession: beyond the favourable Grundstückswert, no specific business-asset exemption exists at federal level — but Austria's no-inheritance-tax regime means there is rarely a planning need for one.

Agricultural and forest land: Land- und forstwirtschaftliche Betriebe are valued at Einheitswert (a special low cadastral value) for both Grunderwerbsteuer and Grundbuch fees, materially reducing transfer costs.

Life insurance: policies paid to a named beneficiary on the deceased's death fall outside the estate and trigger no Austrian tax on the beneficiary (assuming the beneficiary is a private individual). This was already true before 2008 and remains so.

Foreign private foundations: Austrian residents transferring assets into a non-Austrian foundation must pay Stiftungseingangssteuer at 25% (versus 2.5% for transparent Austrian Privatstiftungen) — designed to discourage round-tripping.

Worked Example: €500,000 Estate to Spouse and Two Children

An Austrian resident dies in 2026 leaving a net estate of €500,000: a Vienna apartment (Grundstückswert €180,000, market value €380,000) plus €120,000 in financial assets. The will splits everything equally.

Inheritance tax due: €0 for all heirs — Erbschaftsteuer was abolished in 2008.

Property transfer side — apartment passes to spouse and two children in equal thirds:

• Each acquirer's Grundstückswert share: €180,000 / 3 = €60,000.
• GrEStG family rate: 0.5% on the first €250,000 → 0.5% × €60,000 = €300 per acquirer.
• Eintragungsgebühr: 1.1% × €60,000 = €660 per acquirer.
• Per acquirer property transfer cost: €960.

Total Austrian tax/fees on this estate: approximately €2,880 across the three heirs — entirely composed of Grunderwerbsteuer and land register fees on the apartment. Financial assets pass with zero levy.

For comparison, in Germany under Erbschaftsteuer the same estate to a spouse and two children would likely pay €0 thanks to the spousal €500,000 and child €400,000 allowances. Austria reaches the same effective outcome via a different mechanism: no inheritance tax at all.

For a high-value Vienna villa (Grundstückswert €900,000, market value €2.5m) passing to a single child:

• GrEStG: 0.5% × €250,000 + 2% × €150,000 + 3.5% × €500,000 = €1,250 + €3,000 + €17,500 = €21,750.
• Eintragungsgebühr: 1.1% × €900,000 = €9,900.
• Total: €31,650 on a €2.5m market-value villa — versus a German spouse-child Erbschaftsteuer that might range from €0 to €100,000+ depending on the Familienheim exemption status.

Austria becomes notably more favourable than Germany for high-value, non-family-home property transfers and non-direct-line transfers.

Cross-Border Angle

Deceased resident abroad with Austrian assets. A non-resident deceased's transfer of Austrian-situated real estate to heirs is subject to Grunderwerbsteuer at the family scale (if heirs qualify) or 3.5% flat (non-family). No Austrian inheritance tax applies regardless of residency — it does not exist.

Austrian resident with foreign assets. No Austrian inheritance tax applies. Foreign-situated real estate transfers to heirs are taxed locally according to the country of situs (e.g., Spain, France, Germany). Austria does not impose any further levy.

Double-tax treaties on inheritance: Austria retained inheritance-tax treaties with Germany, Czech Republic, Hungary, Liechtenstein, the Netherlands and Switzerland — but these are now of mainly historical interest given the abolition. The German treaty (and the 5-year German emigrant tail rule) can still affect a German citizen who moved to Austria within the last 5 years before death.

The "Austrian planning emigrant" pattern: wealthy individuals from high-inheritance-tax jurisdictions (Germany, France, Spain, Belgium) occasionally relocate to Austria specifically for the tax benefit. The trigger is genuine tax residency under the Doppelbesteuerungsabkommen definition (centre of vital interests, 183-day rule). Sham residency is policed by the originating country (notably Germany's 5-year tail rule and France's source-rule provisions).

Polish Reader Angle

A Polish heir of an Austrian-resident deceased faces a notably simple analysis:

1. EU Regulation 650/2012 (Brussels IV) determines succession law — Austrian by default (habitual residence), Polish nationality law optionally chosen in will.
2. Austrian tax: 0% inheritance tax. Only Grunderwerbsteuer applies to any Austrian real estate (family rate 0.5–3.5% on Grundstückswert).
3. Polish tax (podatek od spadków i darowizn): applies to the Polish heir on the worldwide inheritance. Group 0 (spouse, descendants, ascendants, siblings) is exempt if SD-Z2 is filed within 6 months of acceptance. Other groups pay 3–20% on the inheritance value above their group threshold.

A Polish child of an Austrian-resident parent inheriting a Vienna apartment would pay:

• Austria: 0.5–3.5% Grunderwerbsteuer on the Grundstückswert (typically a few thousand euros).
• Poland: €0 (Group 0 with timely SD-Z2 filing).

The Polish heir's compliance is therefore disproportionately about the Austrian property side and the Polish SD-Z2 filing, not Polish inheritance tax. There is a Polish-Austrian DTT but it covers income tax, not inheritance.

For a Polish nephew of an Austrian uncle inheriting only financial assets, Austrian tax is €0 outright; Polish tax under Group III applies at 7–20% on the inheritance above PLN 5,733.

Estate & net worth planning sidebar: Austria's no-inheritance-tax regime is unusual in the EU and can shift cross-border family planning materially. Freenance's Financial Freedom Runway lets you model how an inherited Austrian asset (whether Vienna apartment, Tyrolean ski chalet or financial portfolio) affects your timeline to financial independence — factoring in only the Grunderwerbsteuer and ongoing holding costs rather than a one-time inheritance-tax hit. Particularly useful when comparing Austrian inheritances against German or French equivalents.

FAQ

Did Austria really abolish inheritance tax? Yes — Erbschaftsteuer and Schenkungsteuer both ceased to apply to events after 31 July 2008. The Constitutional Court (VfGH) struck down the valuation framework in 2007 and the legislature chose not to repair it. No replacement tax was enacted.

What remains on inherited property? Grunderwerbsteuer (real estate transfer tax) at progressive family rates of 0.5% (up to €250,000 Grundstückswert), 2% (€250,001–€400,000) and 3.5% (above €400,000), plus the Eintragungsgebühr (land register fee) of 1.1% on the same base. Total typically 1.6–4.6% of Grundstückswert.

Do I need to declare an inheritance to the Austrian tax office? There is no inheritance-tax declaration. However, the Grunderwerbsteuer self-declaration is required within 1 month of inheritance acceptance for any real estate transfer, and the Schenkungsmeldegesetz requires gift reporting above the €15,000/€50,000 thresholds within 3 months.

Are gifts during life also tax-free? Yes — Schenkungsteuer was abolished at the same time as Erbschaftsteuer. Gifts above the Schenkungsmeldegesetz reporting thresholds (€15,000 for close relatives, €50,000 for non-relatives, both within a 5-year window) must be reported but trigger no tax.

Is the Austrian Privatstiftung still useful? Yes, but for asset-protection, multi-generational governance and family-business concentration rather than for inheritance tax avoidance. Transfers into Privatstiftung pay 2.5% Stiftungseingangssteuer, and distributions face 27.5% KESt.

Can a Polish family use Austria as an inheritance-tax-free venue? Only if the testator becomes a genuine Austrian tax resident — sham relocation is policed by the originating country (notably Germany's 5-year emigrant tail rule). For a Polish family with no Austrian connection, simply holding assets in Austria via a Polish-resident owner does not avoid Polish inheritance tax — Polish tax follows the heir's residency, not the asset location.

Informational content, not legal/tax advice. Inheritance law is complex — consult a notary or tax advisor.

Practical Planning Considerations

Austria's no-inheritance-tax regime reshapes the planning calculus profoundly. With Erbschaftsteuer and Schenkungsteuer both gone since 2008, the questions Austrian families ask differ structurally from those in Germany, France or Belgium.

Lifetime versus death transfer is largely tax-neutral. A property given to a child during life pays the same Grunderwerbsteuer family-rate progression (0.5/2/3.5% on Grundstückswert) as the same property inherited at death. Financial assets pass freely both ways. The planning question is therefore about control, capacity and family-business continuity, not about tax timing.

The Verlassenschaftsverfahren is the heavy lifting. Austrian succession runs through a court-supervised process led by the Gerichtskommissär (court-appointed notary), typically lasting 6-12 months. The procedure issues the Einantwortungsbeschluss (probate decree) that authorises real estate registration and asset transfer. Heirs cannot dispose of estate assets until this decree is issued — making liquidity planning around the gap a recurring family theme.

The Pflichtteil (forced share) is a 1/2 fraction. Austrian succession law gives descendants and spouses a forced share of half the intestate share. A will can leave less but cannot exclude a Pflichtteil heir entirely without specific Enterbung grounds. The Pflichtteil is a monetary claim, not an in-kind one — this means farms and family businesses can be kept intact in the hands of one heir, paying out the others.

The Privatstiftung route remains relevant. Despite the 2.5% Stiftungseingangssteuer (or 25% for non-transparent foreign foundations) and the 27.5% Kapitalertragsteuer on distributions, the Privatstiftung continues to be used for multi-generational wealth concentration, asset protection from divorces and creditor exposure, and family-governance frameworks. The 1993 Privatstiftungsgesetz remains a uniquely Austrian wealth vehicle.

Inbound emigrants must mind the originating country's tail rules. A German citizen who relocates to Austria within 5 years of death remains in scope for German Erbschaftsteuer under §2(1)(1)(b) ErbStG. A Dutch national has a 10-year tail. A French national may face French source rules. Austrian residency for inheritance-tax purposes therefore needs to predate death by enough margin to clear the originating jurisdiction's anti-emigration provisions.

Polish families with Austrian connections typically encounter Austria via Vienna employment, Tyrolean property or family-business operations. The Polish inheritance side dominates: SD-Z2 within 6 months of acceptance for Group 0, otherwise SD-3 at Group I-III rates. The Austrian side typically resolves at the property-transfer level only.

Sources

• Bundesministerium für Finanzen — Grunderwerbsteuer and Schenkungsmeldegesetz guidance
• Grunderwerbsteuergesetz 1987 (GrEStG), as amended through 2016 reform
• Schenkungsmeldegesetz 2008 (in force from 1 August 2008)
• Verfassungsgerichtshof (VfGH) rulings G 54/06 (2007) and G 23/07 (2007)
• Österreichische Notariatskammer — succession (Verlassenschaft) practice handbook