Five things you need to know about Austria’s complex inheritance tax laws

Inheritance laws in Austria can be complicated, with unique rules and considerations that may surprise newcomers. Whether you’re planning your estate or navigating the system after losing a loved one, here are five key things to know about how inheritance works in Austria.

Your will may become invalid if your relationship status changes

Austria’s inheritance laws underwent a significant reform in 2017, introducing stricter rules for wills involving partners, as Die Presse reported.

If a couple separates after a will is written, the inheritance clause for the partner becomes invalid unless explicitly stated otherwise. This applies to married couples, registered partners, and cohabiting couples.

In recent years, Austrian courts have seen disputes over what constitutes a valid partnership. For example, the Supreme Court ruled in favour of a woman who inherited from a partner she was not living with. The court found that their relationship was primarily physical and lacked cohabitation or shared finances, which meant the will naming her as heir remained valid since they never “separated”.

In contrast, other cases have resulted in wills being invalidated due to a lack of clarity about the relationship’s nature, such as when a couple had a falling out before one partner’s death.

Without regular updates to a will, relationship changes—whether separations or reconciliations—can lead to disputes among heirs and potentially override the deceased’s wishes. Lawyers recommend revising wills promptly after significant life changes to avoid complications.

Non-registered partners do not inherit

Under Austrian law, non-registered partners are excluded from intestate succession (inheritance when there is no will), even if the couple has lived together for decades.

Intestate succession prioritises relatives such as children, parents, and siblings. Spouses and registered same-sex partners are also recognised as legal heirs, but without a will, non-registered partners inherit nothing. Only if no relatives are found—and before the estate falls to the state—can a partner inherit under extraordinary rights.

For non-registered partners, the absence of statutory rights can have devastating consequences. For example, if a deceased partner owned a shared home, the surviving partner might face losing it unless explicitly included in a will.

Close relatives are entitled to part of your estate

Austria’s inheritance laws protect close relatives through compulsory portions. Even if the deceased excludes certain family members in their will, descendants and spouses are entitled to a mandatory share of the estate.

For instance, if a parent leaves their entire estate to a charity, their children can still claim half of their legal inheritance share. The compulsory portion is based on the net value of the estate, accounting for debts and procedural costs. However, lifetime gifts may also be considered, making calculations complex.

Waiving these rights through a formal agreement, often for financial compensation, is possible.

For example, a spouse might waive their share to protect a family business or to avoid future conflicts among heirs. Notaries or legal experts are often required to draft these agreements to ensure fairness and legal compliance.

There’s no inheritance tax—but real estate transfer taxes apply

Since 2008, Austria has had no inheritance tax, setting it apart from many EU countries.

However, inheriting real estate is subject to a property transfer tax: 3.5 percent of the property’s value for most heirs, or 2 percent for close relatives.

Additionally, cash or share gifts exceeding €50,000 for relatives—or €15,000 for non-relatives—must be declared to Austrian tax authorities. Failure to declare these amounts can result in significant penalties.

Future changes to inheritance laws are possible

Discussions about reintroducing inheritance taxes have emerged as Austria’s government grapples with a growing budget deficit. The centre-left SPÖ has proposed wealth and inheritance taxes, arguing that they would target Austria’s wealthiest individuals and align the country with EU norms.

However, such proposals are controversial.

Critics argue that new taxes could drive capital out of the country and create administrative challenges. For now, no decisions have been made, but experts recommend monitoring potential legislative changes that could impact estate planning.

Five things you need to know about Austria’s complex inheritance tax laws

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