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Limited-profit housing association

A company that builds, rents out, manages, or potentially sells housing, is only a “limited-profit housing association” if its non-profit status is conferred by way of notification from the regional government. A limited-profit housing association can be organised in the legal form of a co-operative association, as well as a corporation (GesmbH, AG). If a limited-profit housing association uses public grant funds to build housing, then they are additionally subject to the Regulations on Housing Subsidies, which vary according to federal region. The same legal status basically applies for all beneficial owners of flats from limited-profit housing associations, which is also regulated in the Austrian Non-Profit Housing Act (WGG). This particularly affects the composition of rent. Limited-profit housing associations may only make limited profits. They must also reinvest these profits in national housing policies. In contrast to this, private developers can use profits from their building activity or rental income as they wish. In principle, a so-called “cost covering principle” applies, that is, limited-profit housing associations are subject to a strict examination regulation, which is observed with a separate auditing association (Austrian Federation of Limited-Profit Housing Associations), as well as the relevant regional government acting as the supervisory authority.