If you let a flat in Austria, you operate within a tightly regulated framework. Many mistakes arise not from bad intent but because the wrong rule is applied. Since 1 January 2026, new rules on fixed terms and indexation also apply. This overview shows you, as a landlord, what matters.
Step 1: Check the scope of the MRG
Before you think about the rent or the length of the contract, clarify which parts of the Tenancy Act (Mietrechtsgesetz, MRG) apply to your flat. There are three levels [S1][S16]:
- Full application: All rules of the MRG apply, including rent caps, the catalogue of operating costs and maintenance obligations. This mainly concerns older buildings.
- Partial application: Only individual provisions apply, namely those on rights of succession (Eintrittsrechte), deposits, fixed terms, protection against termination and some transitional issues (§§ 14, 16b, 29 to 36, 45, 46 and 49 MRG). These include, for example, freely financed new buildings with a building permit issued after 30 June 1953 and rented condominium flats in buildings with a building permit issued after 8 May 1945 [S1].
- Full exemption: The MRG does not apply at all, for example to houses with no more than two independent flats or commercial premises, or to second homes used for leisure purposes. The General Civil Code (ABGB) then applies [S1].
Fictional example: you rent out a condominium flat in a house whose building permit was issued in 1968. This is partial application. You can generally agree the rent freely, but the fixed term, protection against termination and deposit are governed by the MRG.
Flats of non-profit housing associations are subject to separate rules under the Housing Non-Profit Act (Wohnungsgemeinnützigkeitsgesetz, WGG) [S1].
Rent: where caps apply
In the area of full application, an appropriate rent may only be agreed in certain exceptional cases. Otherwise, for flats in categories A to C, the reference rent (Richtwertmietzins) applies, with supplements and deductions; for category D, separate, lower amounts apply [S2]. A location surcharge (Lagezuschlag) requires an above-average location, and you must state the reasons for it in writing at the latest when the contract is concluded [S2]. For a fixed-term main tenancy, the permissible main rent (Hauptmietzins) must be reduced by 25 per cent [S2]. The reference rents are set for each federal state and adjusted regularly; always use the value applicable at the time the contract is concluded.
If the agreement exceeds the cap, it is void to that extent. The tenant side can assert this within three years; for fixed-term contracts, even up to six months after the end or conversion into an open-ended contract [S2]. Amounts overpaid can be reclaimed together with interest [S3].
In the area of partial application and full exemption, the rent is generally free. However, limits arise from general civil law, for example for usury (Wucher) or immorality (Sittenwidrigkeit) [S17].
Agreeing a fixed term correctly
In the areas of full and partial application, a fixed term is only enforceable if it is agreed in writing and meets the minimum duration [S4]:
- five years if, when the contract is concluded, you are an entrepreneur (Unternehmer) within the meaning of the Consumer Protection Act (Konsumentenschutzgesetz),
- three years if you are neither an entrepreneur nor a business.
These rules apply to contracts concluded or extended after 31 December 2025; for older fixed terms, the previous legal position remains in force [S5]. Under case law, whether you count as an entrepreneur depends mainly on how extensive and organised your letting activity is [S14]. In case of doubt, the longer duration is the safe choice.
If the written form is missing or the duration is too short, the contract is deemed open-ended [S4]. If you allow a validly fixed-term contract to simply continue, it is extended once by five or three years respectively and thereafter for an indefinite period [S4]. Tenants may terminate a fixed-term flat contract after one year, with three months' notice to the end of a month [S4].
In the areas of full and partial application, you can terminate an open-ended tenancy only for important reasons and only through the courts [S1][S6][S7].
Indexation 2026: what the Rent Indexation Act changes
The Rent Indexation Act (Mieten-Wertsicherungsgesetz, MieWeG) has applied since 1 January 2026 to main and sub-tenancy contracts for flats in the areas of full and partial application of the MRG, including older contracts for increases from this date onwards [S8]. Co-operative flats under the WGG are generally excluded [S8]. The most important rules [S8]:
- An index adjustment is only possible once a year on 1 April, for the first time in the full calendar year after the contract is concluded.
- The decisive factor is the average change in the consumer price index in the previous year. If it is above 3 percent, the portion above that counts only half.
- For the first adjustment, inflation is taken into account only proportionally according to the full months since the contract was concluded.
- For flats with rent restrictions under the MRG, inflation is set at a maximum of 1 percent for 2025 and a maximum of 2 percent for 2026.
An adjustment also requires an effective indexation agreement. It is sufficient to refer in the contract to the calculation model of the MieWeG [S8]. In the full application area you must also assert an increase in writing at least 14 days before the interest date, and it must not exceed the upper limit [S2]. For old contracts with an ineffective indexation clause, claims for repayment are generally limited to payments of the last five years, with exceptions [S8].
Fictitious example: A contract in the partial application area, i.e. without rent restriction, is concluded on 15 June 2026. Assuming inflation in 2026 is 4 percent, 3,5 percent counts. For the first adjustment on 1 April 2027, six twelfths of this are taken into account, i.e. 1,75 percent.
Deposit, operating costs and maintenance
Deposit: The law does not specify a maximum; three months' rent is common [S15]. You must invest a cash deposit on a savings account or equivalent, secured, with interest and separated from your assets, and inform the tenant in writing on request. After the end of the contract it must be repaid immediately together with interest, less justified claims arising from the tenancy [S9]. These rules also apply in the partial application area [S1].
Operating costs: In the full application area you may only pass on the costs listed in the law. Monthly flat-rate amounts are based on the previous year, and the statement must be presented no later than 30 June of the following year; the tenant may inspect the receipts. Credits and additional payments fall due on the second following interest date [S10]. Outside full application, the contract decides which costs the tenant bears [S1].
Maintenance: In the full application area you must maintain the general parts of the building, remedy serious structural defects inside the flat and significant health hazards, and keep rented boilers and water heaters in working order [S11]. Outside full application the ABGB applies: you must hand over and maintain the flat in a usable condition. This may generally be contractually deviated from – however, in the partial application area not with respect to the maintenance of rented boilers, water heaters and other heat-generating devices [S19]; the tenant cannot waive in advance a rent reduction for unusability [S12][S18].
Typical pitfalls at a glance
- Fixed term only oral or too short: contract is deemed to be indefinite [S4]
- No fixed-term discount in full application: rent partially ineffective, reclaim [S2][S3]
- Index increase before 1 April or above the MieWeG model: increase applies only to the statutory extent [S8]
- Deposit on your own current account: breach of the investment obligation [S9]
- Operating costs statement too late: tenant can apply for presentation at court or conciliation board [S13]
In complex cases, for example an old building with mixed contracts, it is worth seeking advice from an advocacy organisation, a property management company or a law firm.