Foreigners have a great interest in buying property in Vorarlberg, particularly for their holidays. Quite soon the partially bad examples from Switzerland and France (proliferating cottage areas) have led to a restriction of the purchase of holiday flats and cottages in Vorarlberg and other federal states.

The restriction is effected in the spatial planning regulations. The law on spatial planning in Vorarlberg for example provides that local authorities may determine in the zoning plan where holiday flats may be built. Holiday flats (cottages) may only be built and existing apartments may only be used as holiday flats on these expressly dedicated areas. That applies to nationals (equal before the law: EU-nationals) as well as to foreigners.

Definition of holiday flat
According to the legal definition holiday flats are classified as apartments or living spaces which do not cover an all-season housing need, but which are used only temporarily during the holiday season, for vacation or other recreational purposes.

According to the law on spatial planning in Vorarlberg the use as a holiday flat is not given if the premises are used for the commercial accommodation of visitors or for private room rental.

Commercial letting or private room rental has to be assumed if on the same premises guests often change and no unnaturally long-time use by a special guest, resp. by people who have been invited by him takes place (e.g. the entire winter season).

EU legal concerns
The limitation of access to the real estate and property market for EU-citizens might interfere with fundamental freedoms guaranteed by the EU.

Despite a totally equal treatment of nationals and EU-foreign nationals with regard to the existing restrictions on the purchase of holiday properties, the concerns regarding European law are still not completely dispelled in the opinion of the European Court of Justice.

In similar cases in Italy and Spain the European Court of Justice has already ruled that also the restriction of the passive freedom to provide services constitutes a breach of EU-Law. That means that EU-foreign nationals are being constrained or restricted in accepting services in another State. A substantial part of the guests in Austria come from EU-countries. These guests are now being precluded by the restriction in the Law on spatial planning from using certain possibilities in Austria, as they may purchase holiday flats or cottages only to a limited extent. This may constitute a restriction of the passive freedom to provide services. With regard to Austria however this question has not yet been finally decided.

Exceptions
The Law on spatial planning provides that in case of reasons worthy of particular consideration the local authority may grant an exemption and approve certain apartments as holiday flats. These special approvals are though treated in a very restrictive manner and a respective application has to be well justified. Such reasons are given particularly in cases of hardship or if a great advantage for the entire community/region is connected with it.

Criminal liability
Who contrary to these provisions uses an apartment as a holiday flat although a respective dedication does not exist, commits a regulatory offence which can be punished by up to
€ 36.000,00. In case of permanent use a respective multiple punishment is possible.

Execution of a purchase
In the context of a purchase of real estate it is absolutely necessary to carry out the respective examinations of the dedication, in order not to buy something that cannot be used in the intended way. The intended use by the buyer has to be verified as well as the entire circumstances which the purchase is embedded in and also the respective dedication of the property. Expert advice is inevitable with regard to such transactions. The experience of many years on the property market, in particular in western Austria, provides the security for our clients that we are able to acquaint them with all the aspects of such a transaction.

As the managing partner of P&M Immobilien und Vermögenstreuhand GmbH (P&M Real estate and property trust ltd.) and as a certified real estate agent our Mag. Patrick Piccolruaz is familiar with the market in Vorarlberg and informed about the latest developments particularly by the respective professional interchange of ideas with the legislative power and the real estate trade.