Buy a house: Don't forget the extra costs

When a decision is made to buy an existing home, an adequate budget must be provided. The main expenditure will, of course, be devoted to the purchase of the real estate itself, but it must be borne in mind that there are a whole host of other ancillary costs which add a little more to the bill. The main costs to be considered are as follows:

Notary fees

What is generally referred to as "notary fees" is actually a combination of different fees. These are the registration and transcription fees in the Registration Authority and the domains which are calculated at the rate of 7 per cent (6 per cent for registration fees and 1 per cent for transcription fees) on the value of the land and the construction on it. Under certain conditions, these costs may be the subject of a tax credit called "Bëllegen Akt" (up to 20,000 euros per head).

To this should be added the fees of the notary, which are fixed by a Grand-Ducal regulation and correspond to approximately 1% of the amount of the acquisition. Lesite juretrived.offers her a calculator to simulate these expenses.

The notary will also ask for reimbursement of the costs incurred to collect the documents necessary for the transaction, such as the request for the cadastral extract, the fees of the surveyor, etc. As well as mortgage charges (see below).

The costs of the bank loan

In the majority of cases, the purchase of a home is carried out with the help of a mortgage loan taken out in a bank. This loan is accompanied by a mortgage fee. Indeed, the bank requires a mortgage on the property being acquired in order to be able to sell it and recover its money in the event of inability to repay the credit. The deed of mortgage must be drawn up by a notary who registers it with the Mortgage Office. The amount of these fees depends on the amount of mortgage credit granted.

Credit means interest to be repaid, the amount of which depends on the profile of the borrower, the duration of the loan, and the amount of the loan. This is usually negotiated with the bank.

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For this, it is generally advisable to also take out balance and invalidity insurance, although this is not compulsory. This insurance covers the remaining monthly payments in the event of premature death or disability. The price of the insurance varies according to the duration of the loan and the amount of the loan and may also be negotiated.

Finally, there will be an application fee associated with the opening of the loan, which is generally modest and is sometimes offered as a commercial gesture on the part of the bank.

Costs related to the accommodation itself

In order to be able to enjoy the property fully, it is also necessary to provide for other costs, such as home insurance, water connection, electricity, possibly gas, telecommunications or, depending on the case, the cost of cleaning up the land and the development of the surrounding area.

Some municipalities also require an infrastructure tax and / or a connection tax. In the case of a condominium purchase, there will be common expenses and potentially future expenses expected by the condominium (facade cleaning, roof maintenance, change of gutters, etc.). . All this, not to mention future property taxes and contingencies.

The different aspects of this series on real estate in Luxembourg:

1. Construction: a heavy (very) heavy sector

2. The paradox of unoccupied housing

3. These biases that inflate real estate prices

4.What makes the value of a house or apartment

5. Buy a house: do not forget the associated costs