Rene Benko’s family villa targeted by Austrian tax authorities

Austrian authorities are targeting Rene Benko’s Alpine home over unpaid taxes, creating a new headache for the luxury retail and real estate tycoon as he tries to stem the flood of insolvencies that have swamped his sprawling empire in recent months.

Tax collectors placed a €12.1 million ($13.3 million) lien on the property in December to cover almost eight years of unpaid sales tax, according to official documents filed in Austria’s property register and seen by Bloomberg News. State broadcaster ORF was first to report the news.  

A spokesperson rejected the allegation that Benko didn’t pay taxes on the property, which is owned by Schlosshotel Igls Betriebs GmbH, a front company owned by Benko’s family trust Laura Privatstiftung. The demand that the owner re-pay value-added taxes already refunded by authorities “has no legal basis,” a Laura representative wrote in an email.

Since November, insolvency administrators have struggled to untangle the hundreds of shell companies operating inside Benko’s Signa Group. The latest allegations suggest that the mogul’s penchant for them also extended to his homes, where his family lived like Matryoshka nesting dolls within multiple layers of financial construction. 

The villa in Igls, just outside of Innsbruck in western Austria, was a luxury hotel before it was acquired by the company controlled by Benko’s foundation in 2016. It had previously been used as a summer getaway for Austrian politicians and was put under around-the-clock armed guard when renovation began, according to local reports. 

Austrian tax officials allege that the villa’s owner must pay sales tax for each of the last eight years, beginning with a €1.9 million bill from the first year and peaking at €5.2 million in 2021. Independent advisers to Austria’s government have also urged the Finance Ministry to investigate who was responsible for allowing the taxes to go unpaid.

This is the latest in a striking turnaround for Benko. At its height, his empire appeared to have no limits. It extended from Europe to the U.S., boasting a real estate trophy case that included stakes in some of the world’s most recognizable properties, including the Chrysler Building in New York and the U.K. department store Selfridges. 

Now, only a few years later, the key pillars of Signa group have collapsed into insolvency, leaving the future of its glittering array of assets — and the fate of the hundreds of creditors and co-investors — contingent on a restructuring process the company is keen to control.