Building on Someone Else's Land? What Do I Need to Watch Out For! Topic: Building Rights
A building right enables, as the name suggests, the right to construct a building on someone else's land at one's own expense. The property remains in the ownership of the grantor of the building right. The…
What is a building right? A building right enables, as the name suggests, the right to construct a building on someone else's land at one's own expense. The property remains in the ownership of the grantor of the building right. The building is constructed at the expense of the holder of the building right. The whole arrangement is governed by a building rights contract in accordance with the Building Rights Act. The duration is between 10 and 100 years. A building right is a so-called property right (dingliches Recht) and is entered in the C-sheet (encumbrances sheet) of the land register. A monthly building rights fee (Baurechtszins) is paid to the owner of the property, the grantor of the building right. Upon expiry of the contract, the building passes to the grantor of the building right, i.e. the owner. However, should the parties reach an agreement, a succession arrangement can be made.
Advantages: As the holder of the building right, I save myself the cost of purchasing a property along with all the associated ancillary costs. The saved costs can partly be invested, for example, in more exclusive fittings for the new house, or elsewhere.
Disadvantages: Financing the new single-family home through a bank is naturally more complicated, as banks generally do not look favourably upon this. Due to the fixed-term building rights contract, such a project is usually only advantageous for a single generation.
Conclusion: In principle, a building right is a matter of personal preference, and no real recommendation can be given here. For people without children, this type of ownership is very well suited, as the overall investment costs can be kept very low. In the meantime, property developers have also discovered building rights for themselves, granting individual apartments under building rights after the completion of a residential complex. The advantage for the future apartment occupant is a lower purchase price.
One of the major grantors of building rights in the east of Austria is Stift Klosterneuburg, which also grants building rights to many commercial users.
Your contact and expert:
Constantin Makarius [email protected] www.4m-immo.at
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