A foreign individual or corporate investor may invest in Austrian property directly or through a local company, such as an Aktiengesellschaft (AG) or Gesellschaft mit beschränkter Haftung (GmbH) or a partnership.
Generally, in Austria, income earned from the leasing of real estate will be classified as rental income. Income earned by legal entities (corporations, limited liability companies) is always classified as business income. Income earned by a local partnership is also classified as business income, provided the partnership performs business activities other than pure rental activities.
From 1 January 2006 onwards, any income earned by a non-resident corporate investor holding real estate in Austria is classified as business income. The same applies to a non-resident individual, holding Austrian real estate in a business abroad.
Source : PWC