Austria to reintroduce inheritance tax after 2029

Austria's inheritance tax debate reignites as 2029 revival looms

Austria's long-running debate over inheritance and gift taxes has flared up again. For five years, political parties and business groups have clashed over whether to reintroduce these levies, abolished in 2008. Now, Finance Minister Markus Marterbauer has announced plans to bring them back after 2029.

The issue has split opinion sharply. Left-wing parties argue the taxes would tackle wealth inequality, while opponents warn of capital flight and economic harm. Both sides agree the current system leaves gaps in public funding despite Austria's high tax burden.

The push to revive inheritance taxes gained momentum as property prices soared and wealth gaps widened. In 2022, the SPÖ proposed a 30% tax on estates worth over €1 million, but the bill failed. Two years later, the Greens suggested a progressive 20–50% rate, which also stalled in committee. Even NEOS, a liberal party, put forward moderate reforms in 2025, but these too lacked support.

Opposition has been fierce. The Federation of Austrian Industries has campaigned against the tax, arguing it would drive wealth abroad. The ÖVP, part of the governing coalition, has repeatedly blocked reforms, most recently in its 2026 agreement with the FPÖ. Yet critics point out that Austria's high tax rates do not translate into strong public services, partly due to low revenue from wealth-related taxes. SPÖ leader Andreas Babler has long framed the tax as a way to target the wealthy, while Green leader Leonore Gewessler focuses on the 'super-rich'. But polls suggest fear of inheritance taxes is spreading beyond the affluent. Many middle-class Austrians now worry they could be affected, even if proposals explicitly exempt smaller estates. Marterbauer's plan to introduce the tax after 2029 marks a shift. His approach may hinge on tying the policy to broader economic reforms, ensuring it rewards upward mobility rather than simply raising revenue. Analysts note that a clear, performance-friendly strategy could be key to winning public and political backing.

The inheritance tax debate remains unresolved, with no reforms expected before 2029. Marterbauer's delayed timeline gives parties more room to negotiate, but resistance from business groups and conservative lawmakers stays strong. If introduced, the tax would reshape Austria's fiscal landscape, though its final design—and its impact on voters—remains uncertain.