Austrian Parliament Approves 5th Tenant Protection Act Amid Criticism from Property Owners
The Austrian National Council has passed the Fifth Tenancy Law Inflation Relief Act (5. MILG), a legislative package intended to address inflation impacts within the housing sector. However, the decision has drawn significant criticism from property owners' organizations, who express concerns regarding increased regulatory complexity and potential negative effects on the housing market.
The Austrian House and Landowners Association (ÖHGB), which represents private property owners across the country, voiced disappointment over the passage of the new regulations. The association highlights that prior feedback and extensive critiques from industry practitioners were not reflected in the final legislative text. According to the ÖHGB, the brief consultation period generated approximately 40 critical submissions, yet these points were largely overlooked in the government proposal submitted to parliament.
Key measures in the 5. MILG include extending the standard minimum contract period for residential leases to five years. Exceptions for individuals not considered business operators are available, but these require landlords to provide proof of the tenant's non-commercial status. This adjustment shifts the burden of evidence towards property owners, which, according to critics, introduces legal uncertainty--especially for smaller, private landlords.
Another major aspect of the legislation involves updated rules for rent indexation and value adjustments. The new system, intended to limit the inflation-driven increase in rents, introduces more complex requirements for calculating permissible rent increases. Property owner associations argue that these changes will significantly expand administrative workload and increase the potential for errors and legal disputes between tenants and landlords.
The ÖHGB further contends that the legislation fails to clarify the status of business operators versus private tenants, leaving important definitions ambiguous. They assert that the new rules do not improve legal certainty and instead may strain the relationship between landlords and tenants, with landlords potentially facing unwarranted suspicion in cases of uncertainty.
Property owners challenge the rationale behind the legislative changes, arguing that main rental prices have not been the primary driver of inflation. According to their data, average main rents have risen at a rate below overall inflation since 2020. They attribute the rise in housing costs to factors such as increased energy prices, local taxes, and ongoing operating expenses, rather than to rental rates themselves.
Concerns have also been raised about the broader impact of continuing regulatory interventions in the rental market. The property owners' association warns that heightened rent controls could discourage investment in new housing development and in the renovation of existing properties. This, they argue, risks exacerbating the shortage of available housing and could ultimately disadvantage tenants searching for accommodation.
The passage of the 5. MILG follows a series of rapid legislative adjustments affecting the rental sector in recent years. According to industry representatives, this sequence of changes has eroded confidence among property owners in the stability and predictability of housing policy, affecting both ongoing investments and the willingness to participate in the rental market.
The Austrian House and Landowners Association remains committed to representing the interests of private landlords, advocating for policies that protect property rights and support a stable investment environment. The organization emphasizes the need for a balanced approach that considers the perspectives of both tenants and property owners in addressing the challenges facing the country's housing market.