
Additional purchase costs: So much more for buyers to expect
Incidental purchase costs are fees and expenses that arise in addition to the purchase price when buying or selling real estate. These are often overlooked or underestimated by buyers. Incidental purchase costs are all costs that are incurred in addition to the purchase price of the property. Compared to other countries, incidental costs in Germany are particularly high when buying and selling real estate.
What are the most typical additional purchase costs?
Incidental purchase costs are calculated as a percentage of the purchase price of the property and include:
- the real estate transfer tax (3.5 percent to 6.5 percent of the purchase price)
- Notary fees and land registry costs (1.5 to 2.0 percent of the purchase price)
- the real estate agent's fee (up to 3.57 percent of the purchase price)
Builders should expect additional purchase costs, such as:
- the building permit (around 0.5 percent of the construction cost)
- Development costs (depending on scope)
- Builder's liability insurance (around 0.1 percent of the purchase price)
- Construction insurance (around 0.12 percent of the purchase price)
How are the additional purchase costs calculated?
The amount of additional purchase costs is influenced by various factors, including whether it is a purchase or a new build, the purchase price itself, and the state. The main reason for the significant differences in costs between the various states is the real estate transfer tax, which varies between 3.5 and 6.5 percent in the states and accounts for a significant portion of the additional purchase costs.
To get an idea in advance, buyers can expect additional costs of around ten percent of the purchase price. Roughly calculated, a property with a sales value of €300,000 will incur additional costs of around €30,000.
Incidental purchase costs and external financing
Banks do not finance incidental costs when purchasing a house. This can be particularly problematic in the case of external financing. It is therefore important for you as the buyer to have sufficient equity capital to cover the incidental costs.
Careful preparation is of paramount importance when buying real estate. For this reason, it is advisable to seek the assistance of an experienced local real estate agent at an early stage.
Are you looking to buy a property? Let us advise you as your local quality real estate agent. Make an appointment with us, we are happy to help!
Notes
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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