Incidental purchase costs: this is how much more buyers can expect

Property buyers often overlook or underestimate the fact that they will incur additional costs on top of the purchase price. This is because not all property purchase costs are obvious at first glance. Read our article to find out everything you need to know about this topic.

Incidental purchase costs are fees and expenses that are incurred in the transaction of a property in addition to the pure purchase price. 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. In an international comparison, ancillary costs are particularly high in Germany when buying and selling property.

What are the most typical ancillary purchase costs?

The ancillary purchase costs are calculated as a percentage of the property purchase price and include

• the land transfer tax (3.5 per cent to 6.5 per cent of the purchase price)
• the notary’s fee and land register costs (1.5 to 2.0 per cent of the purchase price)
• the estate agent’s fee (up to 3.57 per cent of the purchase price)

Builders should expect further ancillary purchase costs, for example

• the building permit (around 0.5 per cent of the construction sum)
• development costs (depending on the scope)
• builder’s liability (around 0.1 per cent of the purchase price)
• building insurance (around 0.12 per cent of the purchase price)

What is the breakdown of the ancillary purchase costs?

The amount of ancillary purchase costs is influenced by various factors, including whether it is a purchase or a new build, the purchase price itself and the federal state. The main reason for the different costs in the various federal states is above all the land transfer tax, which varies between 3.5 and 6.5 per cent in the federal states and accounts for a considerable proportion of the ancillary purchase costs.

To get an idea in advance, as a buyer you can expect incidental purchase costs of around ten per cent of the purchase price. Roughly speaking, for a property with a sales value of 300,000 euros, you can expect incidental purchase costs of around 30,000 euros.

Incidental purchase costs and external financing

Banks do not cover the financing of ancillary costs when buying a house. This can be particularly problematic in the case of external financing. It is therefore important for you as a buyer to have sufficient equity to cover the additional costs.

Careful preparation is of paramount importance when buying a property. For this reason, it is advisable to seek the support of an experienced local estate agent at an early stage.

Are you looking to buy a property? Let us advise you as your local quality estate agent. Make an appointment with us, we will be happy to help you!

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where 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 individual case.

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