Many property buyers make the mistake of focusing exclusively on the purchase price when making their investment decision. What they often neglect are the one-off additional purchase costs as well as the ongoing additional house costs during the period of use. Anyone who miscalculates here is often confronted with serious financial problems in the long term. If the Buying a house without equity is made, then the monthly installments are already high. It is therefore important to take the additional costs of the house into account when planning your budget. You can find out what these include and how to calculate them in this article.
What additional costs are there and how are they calculated?
Basically, two types of additional costs can be distinguished. On the one hand, there are the costs that arise in connection with the purchase of the house, and on the other hand, those that have to be paid over the entire period of use, the so-called additional house costs.
Additional costs when buying a house
The additional purchase costs are additional costs that arise in addition to the pure purchase price of the property. They are common in many countries and regions and can represent a significant portion of the overall property purchase budget.
Real estate transfer tax
The real estate transfer tax is an important component of the additional purchase costs when purchasing real estate. This tax is due when a piece of land or property changes hands. The amount of real estate transfer tax varies considerably and usually depends on the country or federal state in which the property is located. In Germany, for example, the property transfer tax is between 3.5 and 6.5% of the purchase price, depending on the federal state. In some cases it may happen that buyers of real estate try to reduce the real estate transfer tax through clever drafting of the purchase contract or other legal measures. However, it is important to carry out such actions carefully and in compliance with legal regulations in order to avoid legal consequences.
Notary fees
A notary plays a crucial role in the property purchase process as he certifies the purchase contract and ensures that all legal requirements are met. The notary costs consist of various fees that are incurred for the notarial work. These can vary depending on the scope and complexity of the purchase contract. The most important include notarization costs, certification costs and expenses. Notary fees are a one-off expense as part of the property purchase, but play a crucial role in ensuring the legal compliance of the transaction process.
Land registry costs
The land register costs arise from the entry of the new owner in the land register. This is a public directory that documents the ownership of real estate. The land register costs consist of the land registry office fee and the notary fees for the land register entry. Land registration costs can vary significantly depending on the country and region. In addition, in some regions they are regulated by law, while in others they can be freely negotiated. Here it is important to discuss the exact costs with the notary in advance in order to receive a transparent cost breakdown.
Broker commission
The broker's commission is the remuneration that the broker receives for his service. It is not standardized and may vary depending on the country, region and individual agreement between the seller and the broker. In Germany it is common for the commission to be between 3 and 7% of the purchase price.
However, it is often negotiable. It is possible to discuss the percentage or type of compensation (e.g. fixed amount) with the broker before signing a contract. The question of who pays the broker's commission depends on local customs and can be negotiated on a case-by-case basis. In many cases, the buyer pays the broker's commission, but it can also be split between the buyer and seller.
Financing costs
Financing costs make up a significant portion of the additional purchase costs when purchasing real estate. These are fees and expenses that arise in connection with financing the property. These include processing fees, interest, building insurance, appraisal costs and other costs that may apply depending on the country and lender. Examples include provision and account management fees.
It is important to clarify the exact financing costs with the lender in advance and to include them in the total costs of purchasing the property. Transparency about financing costs allows the buyer to better understand the financial impact of borrowing and plan the overall budget realistically. Before choosing a lender, it is advisable to compare different offers and check the exact conditions in terms of interest and fees.
What percentage do the additional costs make up when buying a house?
The additional costs when buying a house can make up a significant proportion of the total price in Germany. Exact percentages may vary by region and individual circumstances. Here is an illustrative example:
Suppose you buy a house for 300,000 euros. In this case, the additional costs could look something like this:
- Real estate transfer tax: In Germany, the real estate transfer tax is between 3.5% and 6.5%, depending on the federal state. Let's assume an average value of 5%. In this case that would be 15,000 euros.
- Notary and land registry costs: These costs vary, but can amount to around 1% to 2% of the purchase price. Assuming they amount to 2%, that would be 6,000 euros.
- Brokerage commission: If a broker is involved, the commission can typically range between 3% and 7% of the purchase price. Assuming it is 5%, that would be 15,000 euros.
In total, the additional costs in this example would be 36,000 euros. To calculate the percentage of the additional costs of the total price, proceed as follows:
Percentage additional costs = (additional costs/purchase price) × 100
Percentage additional costs = (36,000/300,000) × 100 ≈ 12
This 12% is just an example. Actual percentages can vary, which is why it is important to research the specific percentages for your individual case.
Hausnebenkosten
Additional house costs are ongoing costs that have to be paid monthly, quarterly or annually. These must be taken into account when deciding for or against the respective property, as they have a long-term influence on your own financial situation. The focus here is primarily on the following cost centers.
Property tax
Property tax is a municipal tax that is paid by property owners due to the ownership of developed or undeveloped land. In many countries, the amount of property tax depends on the unit value of the property. The standard value is determined by the tax authorities. The second important variable is the assessment rate. This is the percentage set by the municipality by which the calculated unit value is multiplied to determine the amount of property tax. The assessment rate can vary from municipality to municipality.
Waste charges
Waste fees are often collected by municipalities or waste disposal companies in order to finance waste management. Fees may vary depending on each municipality's waste disposal system. Some regions charge a flat fee for waste disposal, while others calculate fees based on actual waste volume or weight.
Street and sidewalk cleaning
Street and sidewalk cleaning is a municipal service designed to keep public streets, sidewalks and squares clean and safe. Many communities charge fees for this service. Billing can be done in different ways, for example via the property tax bill or as a separate invoice.
Water/wastewater
Wastewater costs relate to the disposal of wastewater from the household. The calculation is often based on real water consumption. In some regions, fixed fees are charged for wastewater disposal.
Maintenance reserve
The maintenance reserve, also known as the maintenance fund or reserve fund, is an important aspect of managing real estate property, particularly in residential complexes or communities. It serves to collect financial resources for future maintenance and repair work on the shared property. In many countries and regions, homeowners' associations are legally required to set aside an appropriate maintenance reserve. The exact regulations may vary depending on local law. The amount of the maintenance reserve should be reviewed periodically to ensure that it covers current and future needs. A reserve that is too low can lead to financial difficulties if major repairs are required.
Further additional costs
There are also a number of other ongoing costs that you should take into account before purchasing. These include, among others:
- Schornsteinfeger
- Heating costs
- Heating maintenance
- Strom
- Insurance
- telecommunications
- Road expansion contribution
How much does a house cost in additional costs per month and how do you calculate them?
How high the additional costs are in individual cases can vary greatly from case to case. To give a more concrete idea, we will illustrate it using an average single-family home with a living space of 150 square meters. In this case, the estimated monthly additional costs could look like this.
- Property tax: 150 euros per month
- Water and wastewater: 50 euros per month
- Electricity: 80 euros per month
- Gas (heating): 100 euros per month
- Garbage disposal: 20 euros per month
- Insurance (building and liability): 60 euros per month
- Maintenance and repairs: 30 euros per month
- Municipal taxes and fees: 40 euros per month
In this example, the total monthly additional costs would be 530 euros. It is important to emphasize that these are only fictitious averages and actual costs may vary depending on region and individual circumstances.
It is advisable to get specific quotes for insurance, utilities and other services to get accurate estimates. In addition, annual costs, such as property taxes, can be converted into a monthly amount to better plan the budget.
Conclusion
Both when purchasing and in the later use phase of a property, a variety of costs arise that are often not taken into account when selecting a property. These include additional purchase costs such as property transfer tax, broker commissions and notary costs, as well as costs that arise later during ongoing operations such as property tax, sewage and heating costs. If you don't look closely here, you run the risk of incurring significant additional costs later. It is therefore advisable to break this down transparently when making the purchase decision and to make it an essential selection criterion.
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