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On April 1, the first part of the government’s budget austerity package comes into force.
The first part of the new government’s austerity package comes into force on 1 April. In order to restructure the ailing state budget, 6.4 billion euros are to be saved this year alone, or more is to be collected. The first measures for this, with a volume of 1.1 billion euros for this year, have already been passed in parliament and will come into force on 1 April.
Until now, motor vehicles with zero CO₂ emissions were exempt from the motor-related insurance tax. This exemption will no longer apply from 1 April. This exemption also applies to e-motorcycles and e-motorhomes. According to the ÖAMTC, the additional annual costs for e-car owners due to the new tax obligation will be between 70 and 2,000 euros, depending on the model.
Finance Minister Markus Marterbauer expects this to generate an additional revenue of 65 million euros.
Anyone considering installing a solar power system will have to dig deeper into their pockets in the future. This is because, from April 1, the VAT exemption for solar modules for smaller photovoltaic systems will be abolished. This means that from April, the tax rate of 20 percent will apply—solar modules will, therefore, be that much more expensive. Only purchase contracts concluded before 7 March 2025 (the day the law was passed in the National Council) are exempt.
The state already earns a lot from smokers – around 2.8 billion flowed into the budget from tobacco and VAT last year – but it is set to earn even more. The last round of spring cigarette price increases occurs on 1 April. Each packet of cigarettes will be 20 to 50 cents more expensive. This also applies to alternatives to the classic cigarette, such as tobacco heaters. For example, the “Heets” from Philip Morris will cost 6.20 euros from 1 April instead of the previous 5.70 euros.
These price increases result from the regular increase in tobacco tax and have nothing to do with the new package of measures for budget consolidation. However, this also includes a further increase in tobacco tax as of 1 April, so it is quite possible that smokers will face another price increase this year.
In any case, the Minister of Finance plans to generate 50 million euros in additional revenue this year from a further increase in tobacco tax.
From 1 April, the so-called betting fee will rise from two to five percent of the betting stake. This mainly affects sports betting. The companies offering bets must pay this fee. Customers will not notice the fee increase directly when betting. However, it can be assumed that it will affect the odds, for example, or changes to betting offers. In any case, the industry is moaning about this short-term tax increase of 150 percent.
An additional 50 million euros will flow into the state coffers this year.
Another cost increase that many mobile and Internet customers face every April has nothing to do with budget restructuring. This is because many telecommunications providers link their tariffs to the consumer price index (CPI), which means automatic price increases in line with annual inflation. Last year, many customers had to swallow a hefty price increase of 7.8 percent; this year, it is 2.9 percent.
At least there is one piece of good news: Not everything that becomes more expensive in April will be more expensive this year. This is because the government is stepping on the inflation brakes regarding rents. Specifically, rents in old buildings and cooperative apartments will be frozen for 2025, meaning they may not be adjusted for inflation this year, as is usually the case in April.
The corresponding change in the law comes into force on 1 April. Otherwise, these rents would have risen to 4.2% in April. However, the rent cap does not apply to newly built apartments at this time. According to the government program, this is to follow.
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