Living on someone else's property: What does building lease mean?
Buying your dream home, but it's on someone else's property? Austrian building lease makes it possible. We provide you with all the relevant details on building lease from a private law perspective, the advantages of building lease properties and valuable tips from our building law expert Mag. Arno Pajek, lawyer and contract judge from Vienna.
Should I or shouldn't I? Buy a house or apartment on a plot of land that doesn't even belong to me? Glorit plans and realises around 15 percent of its properties on leasehold land. The construction company is therefore familiar with the most frequently asked questions on this topic and knows exactly what it takes to build on legally secure ground. But let's take a look at the basis, or more precisely, the legal basis.
Building lease simply explained
In Austria, building lease under private law makes it possible to build on third-party land. This means that you can fulfil your dream of owning your own home even without buying land. With a building lease property, you therefore acquire:
1. a house or a apartment and
2. an owner with entry in the land register
However, as the owner of a building lease property, you are NOT the owner of the land on which the house or apartment was built. But how does a property owner benefit from this?
In Glor text! Private building law in Austria makes it possible to erect a building on someone else's property - or under its surface. |
What does building interest mean?
Owners of a building leasehold property only acquire the right to build on someone else's property. In return, they pay an annual building rent (= a form of rent) to the landowner.
Good to know! In the case of Glorit projects, the respective municipality or the Klosterneuburg Canons' Monastery are usually the landowners of the building rights properties. |
Typical questions relating to building law under private law
People often have similar questions before buying a property with building lease rights. Our building lease expert Mag. Arno Pajek, lawyer and contract judge from Vienna, provides the answers.
Question 1: "What if the owner has other plans for his property at some point?"
Mag. Arno Pajek: This question primarily concerns the term of the private building lease. In general, the term must be contractually fixed. This is usually a minimum of ten years and a maximum of 100 years. This period can also be extended with the landowner.
Good to know! Maximum quality and sustainability form the foundation of Glorit. The term of the building rights for Glorit projects is generally 100 years and can be extended by agreement with the landowner. |
Question 2: "I want to leave something to my children, but the property doesn't belong to me. Is that even possible?"
Mag. Arno Pajek: The building lease right is an inheritable and alienable right in rem. This means that the rights acquired with a building lease can also be passed on. Also good to know: The annual building rent within an existing building right cannot simply be increased, even in the event of inheritance or sale, as the heir or buyer enters into the existing building right including rights and obligations. The only possible adjustment to the building interest can be based on the indexation of the interest rate.
Further advantages of leasehold properties
With leasehold properties, there are no costs for the land itself. The advantage is therefore obvious: properties with building rights can be offered at a much more favourable purchase price.
Another advantage is that investors can expect a higher return due to the lower purchase price. Plus: unlike the purchase of buildings on your own land, 100% of the acquisition costs can be amortised for properties on building rights.
Speaking of the purchase price and financing of dream homes. We recommend that you read our article on the A clear view of the financing jungle: What is the KIM Regulation?
Our Glorit advisors are also always ready to listen and provide valuable tips when it comes to making your dreams a reality.
