Alternative to buying

Dream home under building law deters buyers

A year ago, the excavators started work on Dossenweg.

(Bild: Tröster Andreas)

People who buy usually want "real" property: but landowners often only grant temporary contracts. There is also skepticism about the Dossenweg project in Salzburg-Gneis, where only a few apartments have been sold. 

The residential location on Dossenweg in Salzburg-Gneis is first-class: A total of 258 apartments are being built, almost half of them freehold. And that's where it gets complicated. 69 times, the dream home is "only" being granted building rights. The landowner decided not to sell the land, but only to make it available on a temporary basis.

Alternative to buying and renting in cities
Especially in cities, where property prices continue to spiral upwards, the proportion of building rights is increasing. "It's often the only way to get hold of land," says Stephan Gröger, Managing Director of Heimat Österreich, which is building on Dossenweg. The church in particular and more and more farmers are selling their land this way.

Building rights are not generally a catch with subsidized apartments: you need less equity to start with (1000 euros/m2 on Dossenweg), but you have to pay a monthly building right fee, i.e. a kind of rent for the land. However, buyers still have to fork out an impressive 5200 euros per square meter for the Dossenweg project.

Overview of the Dossenweg project

(Bild: Krone KREATIV/stock.adobe)

What happens to the apartment after 99 years
If you want to bequeath, it's more difficult. After 99 years, the apartment reverts to the owner of the property. The right is then extended or a transfer fee is paid. "Building law is something exotic for many people. We have an increased need to raise awareness," says Director Gröger. After 150 initial applications, only 41 Dossenweg apartments (around two thirds genuine ownership) have been sold so far.

The city is now relaxing the guidelines. The allocation is no longer just by random draw. The developer is allowed to advise directly. The registration period in the city will be shortened. For those who want to sell, however, there is still a brake on speculation.