From 1872 to 1884, he had the Palais Nathaniel Rothschild erected at 14-16 Theresianumgasse in Vienna-Wieden in a lavish Ringstraße style inspired by French Renaissance architecture.

The picturesque Reichenau area had become easily accessible from Vienna by the opening of the Southern Railway line and evolved into a popular retreat of the Viennese society, among them Habsburg Archduke Karl Ludwig of Austria who had Villa Wartholz built nearby.

Nevertheless, Nathaniel Rothschild only spent two years at his palace before he placed it at the disposal of the Ministry of War to use it as a convalescent home for veterans.

On his father's death in 1874, Nathaniel and his brother Ferdinand (1839–1898), owner of Waddesdon Manor, inherited most of the family's property and art collection.

Nathaniel Rothschild became known for his substantial philanthropic and charitable activities and was highly popular with members of Vienna's aristocratic society, something that aided the family image and therefore its business.