Debate on the Budget

Marterbauer: Inheritance tax to be introduced by 2029 at the latest

Finance Minister Markus Marterbauer (SPÖ) in Parliament on Thursday(Bild: APA/HELMUT FOHRINGER)

Thursday’s National Council session began with a question-and-answer session with Finance Minister Markus Marterbauer (SPÖ). Although not on the agenda for the current budget negotiations, the debate unexpectedly shifted to a potential inheritance tax.

Given the tight budget situation and gloomy economic outlook, which is being further worsened by the war in Iran, saving money remains the finance minister’s top priority. In total, the additional savings required amount to up to two billion euros. How and where exactly these savings will be made is the subject of negotiations for the 2027/28 biennial budget.

“At the latest” in the next legislative period
During question time, Marterbauer made it clear how he would balance the budget on the revenue side if he had a free hand: with an inheritance tax. This is “sensible, fair, and feasible,” emphasized the SPÖ Finance Minister. At the same time, he made it clear that it would not be introduced during this legislative period because the coalition partners, the ÖVP and NEOS, are opposed to it. However, he is optimistic that an inheritance tax will be introduced in the next legislative period—which begins in 2029 at the latest. “Because the factual arguments speak in its favor,” said Marterbauer.

FPÖ budget spokesperson Arnold Schiefer then raised the concern that capital could flow out of the country if a tax were imposed on inherited businesses. “Solutions can easily be found here,” Marterbauer dismissed the concerns. In countries with inheritance taxes, he noted, there is the option of an exemption for business transfers or payment deferrals over ten years. 

Finance Minister Markus Marterbauer (SPÖ) in Parliament on Thursday(Bild: APA/HELMUT FOHRINGER)

Criticism of the ÖVP
Twenty of the 27 OECD member countries have an inheritance tax, so it is something “quite normal,” the SPÖ finance minister emphasized. For him, it is “only a matter of time.” It is precisely those interested in merit who should advocate for an inheritance tax, as it could be used to offset reductions in taxes on labor or non-wage labor costs. This can be interpreted as a jab at the ÖVP, which has repeatedly used the slogan “merit” in election campaigns.

Minister Marterbauer also rejected Schiefer’s objection that an inheritance tax would increase the overall tax burden in Austria. This is because “wealthy daughters and sons” who live solely off their inheritance have a very low tax rate. Introducing an inheritance tax “would be an improvement overall,” he emphasized.

The National Council convened Thursday morning for the 73rd session of the current legislative period.(Bild: APA/HELMUT FOHRINGER)

Cutting Subsidies
If such a tax does not play a role in the current negotiations, how else is the budget to be balanced? A large portion is to come from cuts to subsidies. The required amounts have been communicated to the ministries, according to Marterbauer. In addition, one subsidy in each department is to be completely eliminated as a “symbolic contribution.”

Additional revenue is expected to come from the plastic tax, which is set to undergo review soon. Furthermore, the finance minister hinted that he had intended to abolish some “climate-damaging tax breaks,” but that the Iran crisis had now “interfered.” He still has “one or two ideas,” however, which he does not yet wish to disclose, Marterbauer said.

Investments in research to remain
He made it clear that, despite the need for austerity, he intends to keep public spending on research and development as high as possible. Direct funding, especially for basic research, would be “very strongly” reflected in the budget.