Tax relief for long-term investments

Published: January 26th 2026 (week 5 of 2026)

Wiener Börse presents its case for a tax relief for profits made on shares held long-term.

In my opinion, it makes sense. The typical advice for regular people is "buy, hold, do not day trade". A tax relief scheme for profits from long-term portfolios would match this, and would actually benefit regular people. Austria already has a tax system that removes the preferential treatment of accumulating (thesaurierend) vs distributing (ausschüttend) ETFs present in tax systems of some other countries, and such tax relief would further improve the position of a regular person investing in the stock market.

What is a bit disappointing is that Austria used to have a tax relief exactly like this. What Wiener Börse argues for is just a reintroduction of a good piece of legislation, not a completely new rule.

Unfortunately, it is much easier to explain to people how reducing VAT on groceries will affect them, as it is something immediate and visible almost every day, than to explain how a change in tax law will help them save money for the future. Politicians like easy wins, though, so of course they will prefer an easily-marketable thing that is good for short-term PR over something far more beneficial, but requiring long-term thinking.

In this sad case, they have preferred reducing Mehrwertsteuer from 10% to 5% over reducing Kapitalertragsteuer (KESt) ie, tax on people's savings, from 27.5% to nothing.

Let's look at a concrete example: buying an apartment for €200'000. With the help of the Eigenkapital calculator we see that you need:

€18'200 for the Nebenkosten
€40'000 of Eigenkapital to get a Wohnkredit

Rounding the sum up, you need about €60'000. Imagine you have this much money saved up in a brokerage, and you saved it over five years, while the portfolio was returning 4% a year ie, enough to cover inflation. Due to how compound interest works, the above means that when you cash out you will have to pay taxes on roughly €10'700 of profit, and 27.5% of that is around €2900.

SPÖ are all proud of themselves that their Senkung will save Austrians around €100 a year. Having a €100 and not having a €100 makes €200, but it still pales in comparison to savings that people could make if their savings were relieved of tax—which in the example considered in the previous paragraph would be €600 a year ie, three times as much.

The problem is, many fewer people manage to save money than not, so the ones for whom savings from reduced Kapitalgewinnsteuer would outweigh savings from lower VAT on groceries are an irrelevant group of the electorate. Therefore, they can go fuck themselves.

In my opinion, penalising people saving money in order to "tax the rich" is terribly short-sighted and counterproductive. "The rich" will be able to evade the tax anyway, while "the misérables" will have a much more difficult time escaping their plight, since not only their income from work is taxed to hell and back—their savings are not being spared either.

How's that for fighting wealth inequality?

Consequently, the aforementioned misérables, who are predominantly young and working, see that they have a fat chance at winning their future, which gives them all the incentives to indulge in their present. On one hand, one might pause and think that this is a self-fulfilling prophecy, and one would not be completely wrong; but on the other hand one has to consider that when the probability of winning a game is minuscule and the rules are stacked against the player, it may make sense to avoid playing at all... which brings us againt to a place, where a tax relief for long-term savings and investments is relevant to a tiny fraction of people.

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