Austrian VwGH: No Fees Exemption for Hotel Leases

Apr 18, 2025 Benn-Ibler Rechtsanwälte

The exemption from fees for residential leases pursuant to Section 33 TP 5 (4) no. 1 of the Austrian Fees Act (Gebührengesetz, hereinafter GebG) does not apply to the lease of hotel buildings. The Austrian Administrative Court (Verwaltungsgerichtshof, hereinafter VwGH) ruled that a hotel lease agreement does not fall under the above-mentioned exception for a fee-exempt residential lease agreement, as hotels are primarily used for commercial accommodation in the form of a service and not for long-term residential use.

In the case at hand, the tax authorities had imposed a charge of approximately EUR 405,000 on a lease agreement for a newly constructed hotel building with 134 guest rooms, a restaurant area, a lobby, and underground parking. The lessee was required to operate the hotel as a four-star hotel, and part of the lease was dependent on turnover. The Austrian Federal Finance Court (Bundesfinanzgericht, hereinafter BFG) had ruled in favour of the exemption, as the guest rooms were considered to be residential space and 68% of the leased property consisted of residential space.

The VwGH rejected this view and clarified that the content of a document is decisive for the obligation to pay fees (‘document principle’). A hotel business differs significantly from the classic letting of residential premises, as the rooms are not rented for long-term residential purposes, but for short-term accommodation. In addition, a hotel offers a lease and not a rental agreement, which precludes exemption from fees. The decisive factor is the economic use of the property: a hotel is operated with the intention of making a profit and is therefore not comparable to a basic residential letting.

The VwGH also referred to the purpose of the statutory exemption from fees. It is intended to provide financial relief for residential tenants and to make housing more affordable. Extending the exemption to commercially operated hotels would contradict this purpose. The legislative materials on the amendment to the GebG also confirm that an exemption only applies to basic residential leases.

Finally, the VwGH held that the legal assessment of a fee does not depend on the percentage of the rented space used as residential space. Rather, it is the character of the contract and the actual use of the building as a hotel that is decisive. On the basis of these considerations, the VwGH overturned the decision of the BFG and confirmed the lessee’s obligation to pay a hotel lease fee.

VwGH Ro 2024/16/0004 (14 May 2024)