Business Premises in Austria: Rent or Lease?
Business Premises in Austria: Rent or Lease?

When an entrepreneur wishes to use business premises in Austria for a specific or indefinite period for consideration, various legal constructs are considered. Typically, these are business premises rent or business lease. Here we explain the different characteristics and implications of renting and leasing business premises in Austria.

You may have the impression that the German language is playing tricks on you here. This article is about the distinction between business premises rent (Miete) and business lease (Pacht) which are often mixed up by non-legal professionals in German as well. Even though "Miete" and "Pacht" are sometimes used synonymously and described as "lease" or "rent" in English, meaning the very same thing, in Austrian legal language, "Miete" and "Pacht" refer to two different things. So whenever we refer to rent in this article as "Miete," we will use the phrase "rent" and when we are talking about "Pacht," we will stick to the phrase "lease" to make it easier for you. You might find legal information relating to Austria (or Germany) where the same word is used with a different meaning (esp. lease for "Miete").

Contract Designation is Irrelevant

It should be noted that the contracting parties cannot simply decide based on the designation of the contract as a "rental agreement" or "lease agreement" to determine the nature of the occupancy relationship.

Rather, it must be examined on a case-by-case basis whether the criteria for business premises rent or for business lease prevail. Relevant is the purpose for which the property is handed over for use and what rights are granted to the lessee. Jurisprudence employs a flexible system of specific characteristics for this purpose, but it is not entirely consistent in detail. It always involves a case-by-case decision – often, there are typical features for both rent and lease. The demarcation is particularly difficult, among other things, in lease agreements in shopping centers.

Characteristics of a Business Lease

The following criteria speak for a business lease:

  • The business premises must be handed over as a going concern.
  • There is an obligation to operate the business.
  • In addition to mere use of the leased property, the lessee is also allowed to derive income (i.e., the lessee may at least claim part of the income for themselves).
  • A turnover-oriented rent is agreed upon.
  • The lessor provides the lessee with assets beyond just the leased premises, such as machinery, a customer base, personnel, a trade license, or a stock of goods.

Characteristics of a Simple Business Rental

For business premises rent, the following criteria could speak:

  • Only a space is provided for use.
  • The rented property must be returned fully vacated at the end of the contract, i.e., any adjustments made may need to be removed.
  • Typical rental regulations are referenced.
  • No or only very subordinate lease characteristics (see above).

Business Premises in Austria Rent or Business Lease: Implications

Whether it is business premises rent or a business lease has, among other things, the following consequences:

The most important consequence is the applicability or non-applicability of rent protection laws, especially the Rent Act (MRG). While business premises rental agreements generally fall within the scope of the MRG, this does not apply to lease agreements. This has implications for the termination of the occupancy agreement, among other things: while the landlord can generally only terminate the (MRG) rental agreement for significant reasons, the lessor, if agreed upon, can also terminate the lease agreement regularly (i.e., without cause). The classification as a rental or lease agreement also has implications for whether subletting is allowed.

There are also provisions in the Austrian Civil Code (ABGB) that are only applicable to rent or only to lease. For example, there are differences regarding when the lessee/tenant is entitled to a reduction in lease/rent.

In addition, there may be liability differentiations and differences in public law under certain circumstances.

Both business premises rental agreements and lease agreements are occupancy agreements within the meaning of the ABGB. Therefore such agreements are subject to a transaction tax of 1% (2% for hunting lease agreements) of the assessment basis. The assessment basis depends on whether the contract is for a fixed or indefinite term.


It is best to carefully consider in advance whether a rental or lease agreement should be concluded. The contract design should accurately reflect this decision to avoid future disputes. However, the contract must not consist of mere empty phrases (e.g., agreement of an obligation to operate on paper, although the parties do not want this), but must actually be lived. For international renters/lessees, we strongly advise requesting a bilingual contract to ensure full comprehension of all clauses. This will empower you to ask pertinent questions and assert any necessary modifications with confidence.

Do You Have Further Questions in Tenancy or Lease Law?

If you have additional questions regarding business premises rent/lease or if you want to be advised in other areas of tenancy and housing law or if you maybe need a bilingual agreement you are welcome to contact us at office@geuer.at or by phone at +43-1-4380072. We look forward to your inquiry.

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