Housing Subsidies



The public (“Länder”) afford € 1,950m (2010) for subsidized new construction. Roughly 1/3 goes to LPHA, 1/6 to commercial housing developers and the remaining 1/2 to individual households and municipalities. In 2010, new construction of as many as 28,000 dwellings have been subsidized. This is roughly 60% of all new construction. Provision of subsidies is usually linked with limitations of purchase prices and rents. Due to the big volume and accessibility for a big part of population, this supply of subsidized new housing strongly influences market prices of commercial housing as well. It mainly limits the price level of economy housing and leads to a smooth market development in this segment. At the same time, this scheme protects the markets from downturns.


Subsidized new construction


In 2010, all “Länder” together have subsidized as many as 28,000 dwellings, compared to 46,000 housing permits. This is 3.3 dwellings per 1,000 inhabitants, an amazingly high number, compared to any other EU country (even Scandinavian). Some one third have been single family homes, 2/3 dwellings in multi-apartment buildings. The number of subsidized dwellings has decrease strongly in 2010 by 17%. The “Länder” show a quite divergent development, mainly dependent on demographic development, the fiscal background and ecological requirements. Subsidized housing construction is expected to continue its decrease in the years to come.


Figure: Housing construction, subsidized housing


Source:  BMF, Statistik Austriat, IIBW


Subsidized refurbishment


The public spends some € 850m on subsidies for housing refurbishment (2010). This goes both to individual home owners, LPHA, commercial housing developers, municipalities and even tenants. Comprehensive refurbishment projects are widely subsidized and steered by the public. Housing subsidies have a strong focus on ecological improvements. This strongly influences the quality standards of retrofit projects. By contrast, tax incentives for private owners to refurbish their assets are hardly in place.


Following different Governmental documents, a share of comprehensive thermal refurbishments of at least 3% per year of the total housing stock should be achieved, to meet the climate targets of Austria. Despite of strong efforts of the ”Länder”, the actual refurbishment rate is still below 1.0%. Meanwhile all “Länder” have introduced generous subsidy schemes for thermal retrofit. Refurbishments on passive house standard may get subsidies of in some “Länder” >50% in actual cash value.


Additionally, the Federal Government has introduced a “refurbishment check” program in 2009, in cooperation with the very well established Bauspar (“contract saving”) sector. Despite of low financial incentives, the program is quite successful.

Contact us

 +43 (0) 1 968 60 08