Austria plans state-funded investment accounts for children

The Austrian government is planning to introduce a new investment model called ‘Zukunftsdepot’ (Future Deposit) to encourage long-term savings for children. Scheduled to take effect in January 2027, the plan aims to provide financial support for children as they transition into adulthood for expenses such as education or housing.

Under the proposed system, parents or family members can open a tax-advantaged investment account in a child's name. Families would be permitted to deposit up to 5,000 euros annually. A key feature of the plan is a potential one-time state contribution of up to 500 euros per child. To ensure long-term growth, funds in these accounts would be inaccessible until the child reaches the age of 18.

To incentivize participation, the government is considering significant tax benefits, including an exemption from the standard 27.5 percent capital gains tax on earnings accumulated within the account until the child reaches adulthood. Additionally, the plan aims to waive account management fees.

While coalition partners have reached a principle agreement, discussions regarding financing continue. The Ministry of Finance, led by the SPÖ, has raised questions regarding the funding model, and the Green Party has expressed opposition to using the Family Assistance Fund (FLAF) to cover the state contributions. The FPÖ has supported the concept but called for more comprehensive tax relief for traditional savings methods.