Negotiations on rent control seem to have collapsed for the time being. After an agreement had already emerged, the ÖVP put a demand for a tax exemption of half a million euros on the table. The coalition partner is angry: On March 1, the rental price brake should have been decided in the plenum.
AUSTRIA. From April 1, rents are expected to rise by 8.6 percent. In order to cushion this inflation, an agreement between the governing parties was already in sight. The Greens called for the increase to be spread over the next three years. Accordingly, rents would rise by 3.8 percent in 2022, by 3.8 percent once more next year and finally by one percent in 2025. This demand was supported by the opposition party SPÖ.
The government wants to introduce rent control next week
The big coalition partner ÖVP wanted a “tax treat” for landlords. A tax break for thermal renovation and boiler replacement was on the table, the Greens accepted the condition. The motion would have been tabled today in a special meeting and decided on March 1st in the plenary session, so that the rental price brake would have ended well before April 1st.
Request at the last minute
Now the negotiations have collapsed. As reported by the Ö1-Morgenjournal, the ÖVP brought in a second demand at the last minute: the governing party demanded an allowance of half a million euros for the real estate transfer tax. The Greens speak of a condition for “approval of what has already been agreed”.
There is a lack of understanding and anger on the part of the Greens. There are too many unanswered questions regarding the ÖVP’s proposal. People who buy a villa worth millions might also benefit from a tax-free half a million. The counter-financing for the exempt amount would be missing. It is regarding three-digit million amounts that would fail. These are also revenues of the municipalities.
ÖVP also thinks of “house builders”
The Treasury Department has not yet commented on the matter. However, the ÖVP side confirmed that the tax exemption for real estate transfer tax is a requirement on their part. If you’re going to put a brake on rents, then you have to think beyond Vienna and the rents and think regarding the “house builders in the flat country”, according to the ruling party.
Only on Thursday did Vice Chancellor Werner Kogler (Greens) speak of the parliamentary negotiations on the rental price brake. “It’s not forever anymore,” said Kogler. However, he might not name a date when the brakes should come.
For Kogler, it is “important and right to intervene in a dampening manner” in order to help people. But he also mentioned the macroeconomic effects of a price spiral. Kogler spoke of investment incentives for real estate owners, even if they are currently not as badly affected by inflation as tenants.
AK calls for a rent cap
Meanwhile, the Chamber of Labor (AK) called for a rent cap once more on Thursday. “We want a maximum of one rent increase per year – it can be a maximum of two percent,” says Walter Rosifka, housing law expert at AK. The union-affiliated Momentum Institute is also campaigning for a rent cap for all rental apartments as long as inflation is well above two percent. In January of this year, inflation was 11.2 percent.
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