Our Expert in Austria
Tenancy law Austria underwent its most significant overhaul in decades when the 2026 rental reform package entered force, introducing the Rent Value Guarantee (Mietwertgarantie), statutory rent indexation caps, revised minimum lease terms and stricter landlord disclosure obligations. For commercial landlords, property developers and hotel operators, the reforms demand immediate contract-level action, existing leases must be audited for non-compliant clauses, new agreements must incorporate updated indexation mechanics, and operational procedures need realignment with enhanced tenant-protection requirements. This guide delivers a clause-by-clause compliance roadmap, ready-to-use drafting language and worked numeric examples so that in-house counsel and property professionals can act without delay.
Austria’s 2026 rental package amends the Mietrechtsgesetz (MRG) and introduces companion provisions affecting both the Austrian Civil Code (ABGB) and sector-specific regulations. The legislative instruments were published in the Federal Law Gazette (Bundesgesetzblatt) and are accessible via the Austrian Legal Information System (RIS). Three pillars define the package: the Rent Value Guarantee mechanism, reformed indexation timing and caps, and new minimum-term and termination rules. The table below summarises each element, its effective date and the categories of tenancy it affects.
| Reform Element | Effective Date | Applicability (Residential / Commercial / Hotel) |
|---|---|---|
| Rent Value Guarantee (Mietwertgarantie), statutory cap mechanism linking maximum rent increases to an independently verified reference value | 1 April 2026 | Full MRG tenancies (residential); partial application to commercial tenancies where the MRG applies; hotel operator leases covered where premises fall within MRG scope |
| Annual indexation timing & cap, indexation limited to once per calendar year; maximum annual increase capped at a defined percentage above the consumer price index (CPI) | 1 April 2026 | All MRG-governed leases (residential and commercial); ABGB-only leases may adopt by contractual incorporation |
| Minimum lease terms & revised notice rules, new minimum durations for fixed-term tenancies; extended statutory notice periods; restrictions on landlord-side ordinary termination | 1 July 2026 | MRG tenancies (residential and commercial); limited application to short-term tourist accommodation; hotel leases with operators subject to specific transitional provisions |
| Transitional provisions, existing leases grandfathered until next indexation event; mandatory alignment required at first rent adjustment after effective date | Varies (aligns with first post-reform indexation date per lease) | All tenancies within MRG scope |
The Rent Value Guarantee Act represents a deliberate legislative response to the sharp rent increases driven by high CPI indexation in recent years. Stadt Wien’s official tenancy guidance confirms that the mechanism is designed to anchor rent adjustments to verifiable market reference values rather than unconstrained CPI pass-throughs. Industry observers expect the practical effect to be a compression of permissible annual rent increases austria-wide, particularly for older-stock residential buildings in Category A and B MRG classifications.
The rent indexation cap is the single most contract-impactful element of the 2026 reforms. Prior to the package, landlords in full-MRG tenancies could pass through CPI increases, often exceeding five per cent annually, at intervals as short as every twelve months, and in some contractual arrangements even more frequently through accumulated threshold triggers. The new regime imposes three constraints simultaneously: (1) indexation may occur only once per calendar year; (2) the maximum permissible increase is capped; and (3) the landlord must provide written notice at least three months before the increase takes effect, calculated using the reference month specified in the statute.
Example 1, Pre-reform lease (old rules): A commercial lease signed in 2022 sets the monthly net rent at €2,000 with a CPI-linked escalation clause triggered whenever the index moves by five per cent or more. Between April 2024 and March 2026, the CPI rose by approximately 8.3 per cent. Under the old mechanism, the landlord could demand a one-off increase of €166 per month (8.3% × €2,000), resulting in a new rent of €2,166.
Example 2, Same lease under the 2026 cap: The reform caps the annual increase. Assuming the statutory cap limits the annual increase to the lesser of the CPI change or a defined ceiling, and assuming that ceiling is set at five per cent for the first adjustment year, the landlord could increase rent by at most €100 per month (5% × €2,000), yielding a new rent of €2,100. The remaining CPI overshoot cannot be banked or carried forward.
These examples illustrate how the rent indexation cap compresses landlord revenue growth and why lease clauses must be redrafted to avoid disputes over impermissible increase demands.
| Lease Type | Permitted Indexation Frequency | Maximum Annual Increase |
|---|---|---|
| Full-MRG residential | Once per calendar year (April cycle) | Capped at the statutory ceiling (Rent Value Guarantee reference) or CPI, whichever is lower |
| MRG-governed commercial | Once per calendar year | Same statutory ceiling applies; contractual caps below statutory cap remain valid |
| Hotel operator lease (MRG scope) | Once per calendar year | Statutory ceiling applies to base rent; service-charge and operating-cost components may be adjusted separately per agreement |
| ABGB-only lease (non-MRG) | Per contractual terms (no statutory frequency limit) | No statutory cap; however, parties may voluntarily incorporate the MRG cap by contractual reference |
Usage note: This clause is designed for MRG-governed commercial or hotel leases. It incorporates the 2026 cap and annual-only adjustment mechanic. Parties should confirm the applicable reference month and statutory ceiling percentage on RIS before execution.
“The monthly net rent shall be adjusted once per calendar year, effective on 1 April, in line with the change in the Austrian Consumer Price Index (VPI) published by Statistik Austria for the preceding reference month, provided however that any such adjustment shall not exceed the maximum annual increase permitted under the Mietrechtsgesetz as amended by the 2026 Rent Value Guarantee provisions. The Landlord shall provide the Tenant with written notice of the adjusted rent at least three (3) months prior to the effective date, specifying the calculation basis. No accumulation or carry-forward of unused indexation entitlements shall be permitted.”
The 2026 reforms strengthen tenant security of tenure by imposing new minimum durations on fixed-term tenancy austria arrangements and extending statutory notice periods. Under the amended MRG, fixed-term residential leases must now run for a minimum of three years (previously, shorter terms were possible in some circumstances). For commercial leases within MRG scope, parties retain greater flexibility, but any fixed term below three years must be explicitly justified by a recognised statutory ground (e.g., personal use, demolition plans). Hotel leases are treated as commercial for this purpose.
Statutory notice periods for landlord-initiated ordinary termination have been extended. For residential tenancies, the notice period is now at least six months. For commercial tenancies, the previous three-month minimum remains, although the government portal (oesterreich.gv.at) advises that longer contractual notice periods remain enforceable and are recommended.
| Factor | Fixed-Term Tenancy | Periodic (Open-Ended) Tenancy |
|---|---|---|
| Duration certainty | High, both parties bound for the agreed term | Low, terminable on notice by either party |
| Minimum term (post-2026) | Three years (residential MRG); flexible for commercial with justification | No minimum, runs indefinitely until terminated |
| Tenant early-exit risk | Limited, tenant generally bound unless break clause is included | Moderate, tenant may terminate on statutory notice |
| Rent security for landlord | Higher, guaranteed income stream for the term | Lower, vacancy risk on tenant departure |
| Recommended use | Hotel operator leases, development financing structures, institutional portfolios | Smaller commercial units, flexible co-working, mixed-use buildings |
“This Lease is entered into for a fixed term of [●] years commencing on [●] and expiring on [●], in compliance with Section [●] MRG as amended. The Lease shall not be subject to ordinary termination by either party during the fixed term. Upon expiry, the Lease shall convert to a periodic tenancy terminable on [six/three] months’ written notice unless the parties agree in writing to a renewal for a further fixed term of at least three (3) years.”
One of the most critical questions for landlords managing existing portfolios is whether the 2026 residential lease reforms and commercial-lease changes apply automatically or require mutual amendment. The transitional provisions take a hybrid approach: existing leases are grandfathered until the next rent-adjustment event, at which point the new rules, including the rent indexation cap and notice requirements, become mandatory. This means that a landlord who triggers a rent increase after the effective date must comply with the reformed mechanics, regardless of what the existing clause states.
Unilateral rent increases that exceed the new cap or fail to meet the three-month notice requirement are voidable at the tenant’s election. Early indications suggest that Austrian tenancy tribunals will scrutinise post-reform rent demands closely, making proactive lease amendment the prudent course.
“The Parties acknowledge that the Mietrechtsgesetz, as amended by the 2026 Rent Value Guarantee provisions (BGBl I No. [●]/2026), applies to this Lease from the date of the first rent adjustment following 1 April 2026. Accordingly, Clause [●] (Rent Indexation) of the Lease is hereby amended and restated in its entirety as follows: [insert updated indexation clause, see Sample Indexation Clause above]. All other terms of the Lease remain in full force and effect.”
The 2026 reforms expand the scope of landlord obligations austria practitioners must track. Beyond rent mechanics, the package introduces enhanced disclosure duties, standardised rent-increase notice templates and tighter record-keeping requirements. Hotel operators face additional layer obligations relating to service-charge transparency and operational interruption disclosures.
| Obligation | Commercial Landlord | Hotel Operator / Lessor |
|---|---|---|
| Written rent-increase notice (3-month advance) | Mandatory for all MRG leases | Mandatory; must separately identify base-rent and service-charge components |
| Calculation disclosure (reference month, index value, cap applied) | Must accompany every rent-increase notice | Same, plus disclosure of any temporary-closure adjustment |
| Annual rent receipt / confirmation | Must be issued within 30 days of request | Must be issued within 30 days; includes operating-cost breakdown |
| Record retention (indexation calculations, notices) | Retain for duration of lease plus three years | Same; additionally retain service-charge reconciliation records |
| Lease-term disclosure at commencement | Inform tenant in writing of statutory minimum term and termination rights | Same; additionally disclose any seasonal operation restrictions |
| Energy performance certificate | Mandatory at lease signing and renewal (unchanged) | Mandatory; must reflect most recent building certification |
A practical lease drafting checklist for compliance teams should include: (a) verify MRG applicability for each property; (b) redline all indexation clauses; (c) update notice templates; (d) confirm minimum-term compliance for new leases; (e) schedule annual rent-receipt issuance; and (f) update property management software to enforce the once-per-year adjustment cycle.
The following clauses are designed for direct incorporation into Austrian lease agreements governed by the MRG. Each clause includes a brief usage note. All clauses should be reviewed by qualified Austrian counsel before execution.
Usage: Supplements the indexation clause by expressly stating the annual cap, preventing disputes about whether accumulated CPI changes may be applied in a single adjustment.
“Notwithstanding any other provision of this Lease, the annual rent increase shall not exceed the maximum percentage permitted under the Mietrechtsgesetz as amended, including the Rent Value Guarantee provisions. Any CPI change exceeding the statutory cap shall not be recoverable in subsequent adjustment periods.”
Usage: Establishes mutual awareness of the statutory framework. Recommended for all new leases and amendment side letters.
“Both Parties acknowledge that this Lease is subject to the Rent Value Guarantee provisions of the MRG (as amended, BGBl I No. [●]/2026). The Landlord confirms that the initial rent agreed herein does not exceed the applicable reference value determined under those provisions. Any future adjustment shall comply with the statutory mechanics, including the annual cap and notice requirements.”
Usage: For hotel operator leases and long-term commercial tenancies requiring certainty of tenure.
“This Lease is granted for a fixed term of [●] years. Neither party may terminate the Lease by ordinary notice during the fixed term. Termination for cause (wichtiger Grund) remains available to both parties under applicable law. At the expiry of the fixed term, the Lease shall automatically convert to a periodic tenancy unless either party gives written notice of non-renewal at least [six] months before expiry.”
Usage: Preserves landlord remedies in the event of material breach while complying with MRG restrictions on ordinary termination.
“The Landlord may terminate this Lease with immediate effect by written notice if the Tenant: (a) is in arrears of rent for more than [●] days despite written demand; (b) uses the premises for a purpose materially different from that specified in this Lease; (c) causes substantial damage to the premises and fails to remedy such damage within [●] days of written notice; or (d) commits any other breach constituting important cause (wichtiger Grund) under Section 1118 ABGB or the applicable provisions of the MRG.”
Usage: Addresses hotel lease austria scenarios where temporary closure (seasonal, renovation or force majeure) affects rent obligations.
“In the event that hotel operations are temporarily suspended due to seasonal closure, mandatory renovation or force majeure, the base rent shall be reduced pro rata for the period of closure exceeding [●] consecutive days in any calendar year. The Operator shall notify the Landlord in writing at least [●] days prior to any planned closure. Service-charge obligations shall continue during closure unless otherwise agreed.”
Usage: A general-purpose clause for side letters updating pre-2026 leases. Cross-reference with the specific amendment clause in the Transitional Rules section above.
“This Amendment supersedes and replaces Clause [●] of the Original Lease dated [●]. The amended clause incorporates the requirements of the MRG as amended by BGBl I No. [●]/2026 and shall govern all rent adjustments from [date of first post-reform adjustment]. The Parties confirm that all other provisions of the Original Lease remain unaffected.”
Usage: Ensures compliance with the new disclosure obligations for hotel operators and mixed-use buildings.
“The Landlord shall provide the Tenant with an annual service-charge reconciliation within [●] months of the end of each calendar year, itemising all operating costs by category. The Tenant shall have the right to inspect supporting documentation upon reasonable notice. Disputes regarding service charges shall be submitted to mediation before either party may commence court proceedings.”
Proactive contract management is the most effective way to minimise litigation under the reformed tenancy law austria framework. Landlords should implement quarterly inspection schedules, use standardised notice templates for all communications, and document every rent-adjustment calculation in a form that can be produced in proceedings.
A sample mediation clause, “Any dispute arising out of or in connection with this Lease shall first be submitted to mediation under the Austrian Mediation Act (Zivilrechts-Mediations-Gesetz). If the dispute is not resolved within sixty (60) days of the appointment of the mediator, either party may commence proceedings before the competent Austrian court.”, provides a practical escalation framework.
The 2026 rental reform package is not a distant policy aspiration, it is in force, and non-compliant rent demands are already voidable. Landlords, developers and hotel operators should prioritise the following actions immediately:
Acting now avoids the risk of voided rent increases, tenant disputes and regulatory scrutiny. The sample clauses and checklists in this guide provide a working foundation, but each lease portfolio will require tailored review to account for property classification, MRG applicability and the specific commercial context of each tenancy.
This article was produced by Global Law Experts. For specialist advice on this topic, contact Stefan Weishaupt at WHG Rechtsanwälte – Custom Legal Solutions, a member of the Global Law Experts network.
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