AIPP • HOW MUCH WILL IT COST?
HOW MUCH WILL IT COST? I
t’s easy to get excited when you spot a “bargain” in the window of an overseas agent. But before you whip
out the chequebook, remember that on top of an advertised purchase price, a property transaction abroad comes with extra costs, and buyers on a tight budget should be aware of this the moment they start their property-hunt.
These additional buying costs can range from around 5-15% of the purchase price, depending on where you buy – in Spain, for example, 10% is a good ballpark fi gure to use. That said, if you’re buying direct from a developer, you may fi nd that some – or all – of these costs are included in the purchase price. Just be sure to get in writing precisely what costs you will be liable for and always pay for your own independent lawyer. In the case of a typical resale transaction
though, there are a number of fees and taxes that you should expect to pay. Firstly, while in the UK the vendor pays all of their agent’s fees, it’s normal in some European locations for buyers to pay agent’s fees. Typically these are around 3%, although in some cases, such as in France, they can be split with the vendor, and there is room for negotiation. Again, unlike in the UK, in most European countries you’ll have to pay notary fees. Notaries are legal representatives of the state and as such fees for their services should be a standard amount in each country. Paying for an independent lawyer, while not an obligation, is an absolute must, just as it is when buying in the UK. Legal fees are typically 1-1.5% of the purchase price but usually there will be a minimum charge of around €1,500 (so if you bought a €50,000 property, you would pay €1,500, not €500 in legal fees). As a new owner, you’ll also need to pay
to have your property registered at the local Land Registry, and then there are the taxes to consider. At the very least
you will usually be liable for an equivalent of stamp duty but your lawyer will advise on other tax obligations. Many countries have taxes particular to them, such as the charge for “military clearance” in Turkey. Usually new properties come with the equivalent of VAT – check whether this is included in the advertised purchase price. If you’re getting a mortgage on your new
property, you’re likely to be charged mortgage arrangement fees, typically between £900 and £1,500 depending on the property. Other incidental costs could be for a
surveyor – especially important if you’re buying an old property – and for translation services, although you can get around this by using a bi-lingual lawyer. Your lawyer should advise you on all of
the above and ensure that any invoices you receive clearly state what they are for – if an invoice is a nicely rounded off lump sum, without a clear breakdown of how that sum was reached, it’s worth querying. Here are some typical purchases with associated buying costs.
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