Judgment — ECLI:EU:C:1999:271
Date: 1999-06-01
Language of the case: German
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Anti-discrimination;Non-discrimination on grounds of nationality
Concepts: Free movement of capital and freedom of payments;General;Free movement of persons, services and capital
Procedure: Reference for a preliminary ruling
Origin: Austria

Summary of the Judgment 
1. Freedom of movement for persons — Freedom of establishment — Free movement of 
capital — Treaty provisions — Scope — National legislation regulating the acquisition 
of land — Covered 
(EC Treaty, Art. 54(3)(e) (now, after amendment, Art. 44(3)(e) EC); Council Directive 
88/361, Annex I) 
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SUMMARY — CASE C-302/97 
2. Accession of new Member States to the Communities — Austria — Finland — 
Sweden —Freedom of movement for persons, free movement of services and capital — 
Transitional measures concerning Austria — Existing legislation regarding secondary 
residences — Concept of 'existing legislation' 
(1994 Act of Accession, Art. 70) 
3. Free movement of capital — Restrictions on the acquisition of immovable property — 
Transitional measures, under the 1994 Act of Accession, concerning Austria — 
Scheme, adopted before the date of accession, for prior authorisation of the acquisition 
of immovable property — Exemption only for own nationals — Justification put 
forward — Article 70 of the Act of Accession 
(EC Treaty, Art. 73b (now Art. 56 EC); 1994 Act of Accession, Art. 70) 
4. Free movement of capital — Restrictions on the acquisition of immovable property — 
Transitional measures, under the 1994 Act of Accession, concerning Austria — 
Scheme, adopted after the date of accession, for prior authorisation of the acquisition 
of immovable property — Whether justified — No justification 
(EC Treaty, Art. 73b (now Art. 56 EC); 1994 Act of Accession, Art. 70) 
5. Community law — Rights conferred on individuals — Where breached by a Member 
State — To be assessed by the national courts 
6. Community law — Rights conferred on individuals — Where breached by a Member 
State — To be assessed by the national courts — Obligation to make reparation for 
damage caused to individuals — In federal States, reparation to be ensured by public 
authorities — Application of national law — Limits 
1. National legislation on the acquisition 
of land must comply with the provi­
sions of the Treaty on freedom of 
establishment for nationals of Member 
States and the free movement of capi­
tal. As is apparent from Arti­
cle 54(3)(e) of the Treaty (now, after 
amendment, Article 44 EC), the right 
to acquire, use or dispose of immovable 
property on the territory of another 
Member State is the necessary corol­
lary of freedom of establishment. Capi­
tal movements include investments in 
immovable property on the territory of 
a Member State by non-residents, as is 
clear from the nomenclature of capital 
movements set out in Annex I to 
Directive 88/361 for the implementa­
tion of Article 67 of the Treaty. 
2. The concept of 'existing legislation' 
within the meaning of Article 70 of 
the 1994 Act of Accession — a provi­
sion which permits Austria to maintain 
its existing legislation regarding sec­
ondary residences for five years from 
the date of accession — is based on a 
factual criterion, so that its application 
does not require an assessment of the 
validity in domestic law of the national 
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KONLE 
provisions at issue. Thus, any rule 
regarding secondary residences which 
was in force in the Republic of Austria 
at the date of accession is, in principle, 
covered by the derogation laid down in 
Article 70 of the Act of Accession. It 
would be otherwise if that rule were 
withdrawn from the domestic legal 
system by a decision by the constitu­
tional court of the Member State 
concerned subsequent to the date of 
accession but with retroactive effect 
from before that date, thereby elimi­
nating the provision in question as 
regards the past, it being for the courts 
of that Member State to assess the 
temporal effects of declarations of 
unconstitutionality made by the con­
stitutional court of that State. 
3. Article 73b of the Treaty (now Arti­
cle 56 EC) and Article .70 of the 1994 
Act of Accession do not preclude a 
scheme for acquiring land such as that 
introduced by the Tiroler Grundver­
kehrsgesetz 1993 (Tyrol Law on the 
Transfer of Land), exempting only 
Austrian nationals from having to 
obtain authorisation before acquiring 
a plot of land which is built on and 
thus from having to demonstrate, to 
that end, that the planned acquisition 
will not be used to establish a second­
ary residence. Although that legislation 
creates a discriminatory restriction 
against nationals of other Member 
States in respect of capital movements 
between Member States, that is author­
ised by the Act of Accession which 
allows Austria to maintain its existing 
legislation regarding secondary resi­
dences for five years from the date of 
accession. 
4. Article 73b of the Treaty (now Arti­
cle 56 EC) and Article 70 of the 1994 
Act of Accession preclude a scheme for 
acquiring land such as that introduced 
by the Tiroler Grundverkehrsgesetz 
1996 (Tyrol Law on the Transfer of 
Land), which places all prospective 
acquirers of land under an obligation 
to apply for administrative authorisa­
tion prior to the acquisition of such 
property. 
As regards Article 73b, such a require­
ment entails, by its very purpose, a 
restriction on the free movement of 
capital and constitutes a restrictive 
measure which can be justified only if 
it meets a town and country planning 
objective such as maintaining, in the 
general interest, a permanent popula­
tion and an economic activity indepen­
dent of the tourist sector in certain 
regions, provided that it is not applied 
in a discriminatory manner and that 
the same result cannot be achieved by 
other less restrictive procedures. That is 
not the position, however, given the 
risk of discrimination inherent in a 
system of prior authorisation for the 
acquisition of land and the other pos­
sibilities at the disposal of the Member 
State concerned for ensuring compli­
ance with its town and country plan­
ning guidelines. 
As regards the purported justification 
based on Article 70 of the Act of 
Accession, which enables Austria to 
maintain its existing legislation regard­
ing secondary residences for five years 
from the date of accession, the relevant 
provisions of the 1996 Law cannot be 
covered by the derogation provided for 
by that provision. Although no mea­
sure adopted after the date of accession 
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SUMMARY — CASE C-302/97 
is, by that fact alone, automatically 
excluded from the derogation — for 
example, it is covered by the deroga­
tion if, in substance, it is identical to 
the previous legislation or limited to 
reducing or eliminating an obstacle to 
the exercise of Community rights and 
freedoms in the earlier legislation — 
legislation such as that at issue, which 
is based on an approach which differs 
from that of the previous law and 
establishes new procedures, cannot be 
treated as legislation existing at the 
time of accession. 
5. It is in principe for the national courts 
to assess whether a breach of Commu­
nity law is sufficiently serious for a 
Member State to incur non-contractual 
liability vis-à-vis an individual. 
6. It is for each Member State to ensure 
that individuals obtain reparation for 
damage caused to them by non-com­
pliance with Community law, which­
ever public authority is responsible for 
the breach and whichever public 
authority is in principle, under the 
law of the Member State concerned, 
responsible for making reparation. 
A Member State cannot, therefore, 
plead the distribution of powers and 
responsibilities between the bodies 
which exist in its national legal order 
in order to free itself from liability on 
that basis. Subject to that reservation, 
Community law does not require 
Member States to make any change in 
the distribution of powers and respon­
sibilities between te public bodies 
which exist on their territory. So long 
as the procedural arrangements in the 
domestic system enable the rights 
which individuals derive from the 
Community legal system to be effec­
tively protected and it is not more 
difficult to assert those rights than the 
rights which they derive from the 
domestic legal system, the requirements 
of Community law are fulfilled. 
Accordingly, in Member States with a 
federal structure, reparation for 
damage caused to individuals by 
national measures taken in breach of 
Community law need not necessarily 
be provided by the federal State in 
order for the obligations of the Mem­
ber State concerned under Community 
law to be fulfilled. 
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