Selling a House with a Right of Residence. Would you like to sell your home but continue to live in it? Whether for financial reasons or to provide for old age, selling your home with a right of residence is becoming increasingly popular in Austria. But how exactly does it work? And what should you look out for?
What does "right of residence" actually mean?
A right of residence (also known as a "right to use the home") is a Right of use in rem in accordance with § 521 ABGB. It can be agreed for certain rooms or the entire house and is usually for life granted. It must entered in the land register to bind third parties.
Right of Residence Not Just in the Case of a Sale: Gifts, Transfer of Ownership, and Family Protection
A right of residence is not limited to traditional home sales. In practice, it is often used in Gifts or advance inheritance arrangements used. In this process, owners transfer the property—often for tax or family reasons—to their children or close relatives while retaining the right to continue living in the house.
Also regarding the Coverage for Spouses or Partners The right of residence is used, for example, to ensure that the surviving partner can continue to live in the property regardless of ownership arrangements. These situations are particularly relevant in a family context and should be legally and properly addressed at an early stage.
Read also: our article on the topic: Annuity in Austria – How to Sell Your House and Receive an Additional Monthly Pension
Selling a house with a registered right of residence: what you need to know
The right of residence represents a restriction on use that applies to the Market value of the property. The selling price is usually lower as a result.
Tip: The more clearly the right of residence is defined (e.g. rooms, duration, ancillary cost regulations), the more transparent and fairer it is for both parties.
Right of Residence or Right to Enjoy the Fruits? An Important Difference
In addition to the traditional right of residence, a Right to Enjoy Fruit be agreed upon. The key difference lies in the scope of use: While the right of residence entitles the holder exclusively to use the property as a residence, the right of usufruct additionally allows the holder to use the property to rent out the property and keep the rental income.
This option is particularly relevant when the beneficiary moves out due to age—for example, to a nursing home—and needs a steady income. Compared to a simple right of residence, however, usufruct has an even greater impact on the property’s value.
What models are available?
- Sale with lifelong right of residence: Often used by senior citizens as part of their retirement planning.
- Partial sale with right of residence: Only part of the property is sold.
- Right of resale: In combination with a temporary right of residence.
Tax aspects of the sale with right of residence
The Real estate income tax is also incurred here. However, the market value is reduced by the right of residence. The valuation is carried out in accordance with the Valuation Act, taking into account the age of the entitled person.
When does a right of residence end?
A right of residence does not automatically end with a change of ownership, provided it is registered in the land registry. Typical reasons for termination include the Death of the Beneficiary, the expiration of an agreed-upon period, or a voluntary waiver. In certain cases, the right of residence may also be terminated by long-term inactivity expire.
This point is particularly important for buyers, as it affects the property's long-term usability and future value.
Risks and legal pitfalls
- Unclear agreements often lead to conflicts
- No legal right to maintenance by the buyer
- Sale is more difficult to place on the open market
Key takeaways - House sale with right of residence
- Lifelong right of residence must be entered in the land register
- Right of residence reduces the sales price, but also the tax
- Transparent agreements are essential
- Various models such as partial sale or right of resale possible
Conclusion: Selling without moving out - with clear rules
A house sale with right of residence offers financial freedom without having to move. A clear, notarized agreement and a realistic price are important. Get comprehensive advice before you take this step.
Kroy Real Estate Not only does it help with sales—it also supports you with expertise, a network of partners, and personalized advice.
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FAQ – Selling a House with a Right of Residence
What does a right of residence mean when selling a house?
A right of residence is a real right of use recorded in the land register that allows the seller to continue living in the property—usually for life and regardless of a change in ownership.
Can I sell my house and still continue to live in it?
Yes. In a sale with a right of occupancy, the seller continues to live in the property while ownership is transferred to the buyer. This requires a clear contractual provision and an entry in the land registry.
Does a right of residence have to be recorded in the land register?
Yes. Only a right of residence that is registered in the land registry is legally protected and is binding on future owners of the property.
How does a right of residence affect the sale price?
A right of residence constitutes a restriction on use and reduces the market value of the property. Depending on the age of the person entitled to the right and the scope of the right of residence, the purchase price may be significantly lower.
What types of housing rights models are there?
Common models include:
Sale with a Lifetime Right of Residence
Partial Sale with Right of Residence
Sale with a Temporary Right of Residence and Right of Resale
Who is responsible for the ongoing costs associated with a right of residence?
That depends on the terms of the contract. Typically, the tenant is responsible for operating costs, while major maintenance should be explicitly addressed in the contract.
Are there any taxes on the sale of a property with a right of residence?
Yes. In Austria, real estate gains tax is also due on sales that include a right of occupancy. However, the property’s taxable value is reduced by the value of the right of occupancy.
How is the value of a right of residence calculated?
The assessment is conducted in accordance with the Assessment Act and takes into account, among other things, the age of the person eligible for housing and the estimated rental value of the property. You can request the assessment here – Contact us.
What are the risks involved in selling a home with a right of residence?
Among the most common risks are unclear contract language, disputes over maintenance obligations, and limited resale potential of the property.
