The aim of the government, which announced its intention to seize the house in April, is to stop the building become a shrine for neo-Nazis. A 12-person commission is currently examining the different options.
Gerhard Baumgartner, head of the Austrian Resistance Documentation Centre, said that the building should be "completely depoliticised" to stop what he said was the building's growing attraction among neo-Nazis.
"We are seeing that a kind of European tourism. Last year there was a bus trip from Hungary visiting, this year different prominent far-right figures stopped on their way through," Baumgartner told Oe1 public radio.
"It should be turned into something that nobody wants to be photographed in front of... a supermarket, a Humana (second-hand clothes shop) or a fire station -- a sensible usage."
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The house is an unremarkable three-story yellow-painted building in the center of a quaint and quiet town.
But local historians say Hitler, who came into the world in 1889, was not born in the house itself but in a building behind it that has long since been demolished. His family moved away from Braunau when Hitler was three.
Outside there is a stone memorial that reads: "For Peace, Freedom and Democracy. Never Again Fascism, Millions of Dead Warn."