Calculate purchase price: Property, ancillary costs, taxes, notary, land register, … Checklist + example
Calculating the purchase price including incidental purchase costs – How is the final purchase price of a property made up? How high are the ancillary purchase costs and how is the broker’s commission divided up? In addition to the land transfer tax, costs for notary, land register entry and broker are also due. Find out here how to calculate the final purchase price of your property, including a checklist and example.
Calculate purchase price: Important factors
To calculate the purchase price depends on several factors. The location of the property, its location, as well as its year of construction are important. Once the purchase price of the property has been determined during the property valuation, the ancillary purchase costs must be added.
The final purchase price is therefore composed of
- Purchase price of the property
- Incidental purchase costs
Incidental purchase costs: land transfer tax, broker & Co.
Not all incidental purchase costs are the same in all federal states. Some incidental costs, such as the real estate transfer tax, differ from state to state. Sometimes it also depends on whether you are buying a house, an apartment or an apartment building. The investment strategy, i.e. income property or investment property, can also have a different effect on the ancillary purchase costs. If you also buy through a real estate agent, you will also incur a broker’s commission, which also varies by state.
Reading tip: Real estate transfer tax by federal state
So what counts as an incidental cost of purchase?
- Real estate transfer tax (3.5-6.5%)
- Notary fees (1.5%)
- Land register entry (0.5%)
- Broker commission (3.57-7.14%; 50:50 for private purchase)
in a home of one’s own in a dreamlike setting. What are the ancillary purchase costs here?
Example: Buying a house in NRW including incidental purchase costs
We will show you how these ancillary purchase costs add up to the original purchase price using this short example. Let’s assume you want to invest in a single-family home in NRW. To keep the example simple, let’s assume that after technical and commercial inspection the purchase price is 100,000 euros.
- Purchase price for house in NRW: 100,000 euros
Calculate real estate transfer tax in NRW
Depending on the federal state, the real estate transfer tax ranges from 3.5% to 6.5%. Our property is located in NRW. One look at the table and we find out: The property tax in NRW is 6.5%.
- Real estate transfer tax in NRW (6.5%): 6,500 euros
Notary costs: sealing the purchase contract
You will also incur notary fees. After all, the purchase agreement must be sealed. You can estimate this amount at 1.5% of the purchase price of the property.
- Notary fees (1.5%): 1,500 euros
Land register entry Costs: Transfer of ownership
The land transfer tax has been paid, as well as the notary? Very good! Next comes the land register entry. Here, the property you have purchased is now registered as your property. For this transfer you should calculate 0.5%.
- Land register entry (0.5%): 500 euros
Broker costs: commission & distribution
If a broker is involved, the broker’s commission is still due in the last step. It is important to note here: If it is a private real estate purchase, the broker’s commission is split 50/50 between the buyer and seller. However, if the real estate purchase is a commercial purchase (for example, on behalf of a company), then the commission and distribution are freely negotiable. The amount of the broker’s commission varies depending on the federal state. In NRW it is 3.57%.
- Brokerage commission (3.57% [3,570 / 2]): 1,785 euros
Conclusion: Purchase price and ancillary purchase costs at a glance
The actual purchase price of the property is therefore 100,000 euros. If the ancillary purchase costs are added, we are then at 110,285 euros, which must be invested in total. Our tip: Right from the start, make a concise checklist of the ancillary purchase costs that you will incur and add these to the original purchase price. This prevents any nasty surprises with regard to financing.
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