How does Brexit affect real estate transactions in Austria?

Currently, natural persons holding an EU passport or companies domiciled in the UK and under control of UK citizens are treated as domestic real estate investors. With respect to Austrian real property (other than land used for agriculture or forestry) this basically means that the direct or indirect acquisition of real property, the conclusion of long-time lease agreements or the acquisition of rights in rem over real property (such as mortgages or easements) do not require the approval of an Austrian Land Transfer Authority. Contrary to that – depending on the Federal Province where the real property is located – such transactions are however subject to such approval if the acquirer is able to refer neither to the fundamental freedoms granted by EU law nor to an international treaty. Transactions missing the required approval are null and void.

From today’s perspective, it is likely that the acquisition of real property or the acquisitions of rights over real property located in Austria by UK citizens or companies domiciled in the UK and controlled by UK citizens will become significantly more difficult once the UK leaves the EU. This will affect both private property transfers on the one hand and M & A deals with an Austrian real estate nexus on the other. Further, the absence of the benefits of EU law might even affect UK-based or controlled lenders seeking mortgage security over the Austrian properties of their borrowers, as in certain cases even the establishment of mortgages could be subject to approval.