Over the past few years, the media have regularly reported on topics surrounding holiday homes, rights of use, and the corresponding legal regulations. In Tyrol, there are 16,000 residences which have been granted the right to be used as holiday homes, but it is now nearly impossible to obtain these rights. There is a great deal of uncertainty amongst many investors, whereby the correct and legal use of a residence is of primary concern. It is now evident that a residence may not be used mainly for holiday purposes if the appropriate rights have not been granted. There is a need for information concerning other property usage categories and the legal requirements surrounding the rights of use in general.
Engel & Völkers places emphasis on solid knowledge and professional real estate advice. Stefan Ross, solicitor at HRR (Hochstaffl | Rupprechter | Rass) law firm in Wörgl, is a civil engineer. As a specialist in the field of construction and real estate law, he has the necessary expertise. In an interview with Engel & Völkers, Mr. Rass outlines the most important facts surrounding the topic of holiday homes.
According to the provisions set out in the Tyrolean Spatial Planning Act, holiday homes are houses, or other parts of buildings, which do not serve to satisfy the needs of year-round living associated with the centre of one’s life, but are used for stays during holidays, school holidays, weekends, or on other temporary occasions for relaxation purposes.
Can a building located in Tyrol be used as a holiday home?
Generally, it is neither allowed to use a building or home in Tyrol as a holiday home nor hand it over for use as a holiday home, unless the property concerned has been granted the right to be used as a holiday home. However, properties with such rights are rare—in Tyrol, there are only approx. 16,000 in total.
Are new rights granted for holiday homes?
Generally, it is possible to gain the right to use a property as a holiday home. In this context, the holiday home quota of 8% plays an important role. If more than 8% of the residences in a council are already holiday homes, the limit has been reached. In practice, it is currently rather difficult to obtain the right to use a property as a holiday home. Exceptions might be granted under certain conditions (e.g., when a property has been inherited or if personal circumstances change).
What happens if I use my property as a holiday home without having been granted the right to do so?
The administrative bodies may only act upon justified suspicion, an example of which might be a well-founded complaint. In this case, the authorities are obliged to initiate an investigation, usually request a statement from the owners/residents, carry out checks, and gather information from third parties and utility companies.
What do you advise our clients to do, should they be contacted by the council concerning the use of their residence or requested to provide a statement?
The property’s resident has a certain duty to cooperate and an obligation to provide proof during such investigations. This is why it is beneficial to document the use of the property in as much detail as possible right from the beginning. Generally, it is not necessary to be represented by a solicitor in such investigations. As such, the parties concerned could deal with the authorities themselves. My experience shows, however, that it makes sense to seek the help or advice of a solicitor as soon as possible.
What are the consequences if the authorities deem that the holiday home ban has been violated?
It is an administrative offence for a person to use a residence as a holiday home or hand over a property for use as a holiday home if there is no authorisation for such use. This kind of offence may result in the district administration issuing fines of up to €40,000, whereby the exact amount is based on several parameters (the extent of the fault, first-time or repeat offence, income level, etc.). In my experience, an initial violation by somebody with average levels of private income and assets (assumed by the authorities if not specified) is met with a fine of between €500 and €4,000.
Moreover, the mayor or the construction authorities of first instance can prohibit further use of the property.
There are rumours that the authorities may auction off a property if it has been incorrectly used as a holiday home. What is your opinion on this?
This potential sanction was reintroduced within the last amendment to the Tyrolean Land Transfer Act in November 2021, provided that three conditions are all met, namely:
(i) the property has been newly acquired since the new regulation came into force
(ii) the property is located in a so-called reserved municipality (this is a municipality in which the pressure on the housing market is particularly high), and
(iii) there has been non-compliance with an official order to immediately refrain from unauthorised use (as a holiday home).
In the meantime, 142 of the 277 Tyrolean municipalities have been declared to be reserved municipalities by decree. Previously (until 2016), there was a legal regulation in Tyrol that (in theory) would have allowed the compulsory auctioning of properties if they were used illegally as holiday homes. The reason this was only theoretical was because in practice not a single compulsory auction was or could be enforced, apparently because the previous regulation was not compatible with the fundamental rights of the Austrian constitution or the fundamental freedoms of the European Union. In the new regulation, which is structured in a more differentiated manner, the legislator wanted to address this issue of fundamental rights.
However, in a detailed statement on the current regulation, the Tyrolean Bar Association has expressed considerable doubts about its conformity with fundamental rights, which I share. Basically, the point is that (holiday home) use bans can also be enforced in other ways—after all, it is legal to leave a property empty and simply own it as an investment property. It therefore remains to be seen whether the new regulation will withstand judicial scrutiny.
What is the correct way to use a property which has not been authorised as a holiday home?
There are several options:
For further questions or a consultation Mr. Ing. Mag. Rass is at your disposal and looks forward to hearing from you.
Ing. Mag. Stefan Rass is a lawyer and partner in the law firm HRR Rechtsanwälte in Wörgl. As a trained civil engineer, he specializes in construction and real estate law.
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The province of Tyrol regulates the use of a property as a holiday home both in building regulations as well as in regional planning laws. The goal is to ensure that Tyrolean properties remain affordable and to keep places lively. According to the perspective of the government, such properties are leading to increases in the property prices in Innsbruck amongst other places. Holiday homes are solid investment properties with valuable added benefits. Despite the high property prices in Kitzbühel, St. Johann, Fulpmes and Kirchberg in Tirol, for example, the owners of these houses and apartments use them both as investments as well as for their own weekend and holiday breaks. This is why investors both from Austria as well as from neighbouring countries like to invest in Tyrolean properties. Some popular hotspots for such properties include the locations in which you can also visit out Engel & Völkers shops in Tyrol:
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