Tax hammer and pension cuts: What Austria expects from April

Tax hammer and pension cuts: What Austria expects from April

The new government of ÖVP, SPÖ and Neos has unveiled its ambitious savings plans, which will already have noticeable consequences for numerous Austrians from April 2025. Under the pressure to avert an impending deficit procedure of the EU, there are several tax increases in the room. Tobacco tax and the betting fees will be raised from the coming month, while the circle of engine-related insurance tax now also includes e-cars. These measures are intended to bring government income more than 1.2 billion euros and thus burden smokers and e-car owners. As 5min.at is also abolished, while at the same time pensioners could cost several hundred euros are.

A central topic is pension expenses that will increase in the upcoming budget to almost 30 billion euros, which makes up for around a quarter of the entire federal expenses. The new government has agreed to reintroduce the previously exposed system of the first pension adjustment, which means that future increases will only correspond to 50 percent of the calculated value. At the same time, the conditions for the corridor pension should be tightened from 2026 by gradually raising the required pension aging age - from currently 62 to 63 years for men. The health insurance contributions of the pensioners are also increased from 5.1 to 6 percent and are an additional burden. According to 2.9 billion euros by 2031.