One-time and Recurring Costs when buying Real Estate

One-time and Recurring Costs when buying Real Estate

One-time and Recurring Costs when buying Real Estate 2560 1707 HYPOHAUS - Swiss Mortgage Broker Experts
When you think of the costs of buying a property, interest costs and amortisation come to mind quite quickly. However, public charges such as taxes and fees are often forgotten.

In this blog entry, we would like to explain the one-off and recurring costs involved in buying a home, so that you don’t get any unpleasant surprises and can enjoy your dream home without any worries.

One-time costs

One-time costs include the so-called transfer of ownership tax, any broker’s commission, costs for the land register entry, costs for issuing the mortgage certificate and any capital payment taxes.
In this country, the change of power of disposal over a property is regulated and taxed on a cantonal basis. In most cases, this so-called transfer of ownership tax amounts to one to two percent of the purchase price. However, there are some cantons that do not charge any transfer tax. For example, the cantons of Zurich and Baselland. If a real estate agent is used for the purchase of property, the commission in most cases amounts between two and four percent of the purchase price. Due to the fact that a purchase contract must be in written form and publicly notarised, notary fees are also incurred. These are the costs for the notarisation of the purchase contract and the entry in the land register. In addition, the property to be purchased is charged as a security due to the mortgage being taken out. The exact amount of these fees is also regulated by the canton and you can find out about them at your local notary’s office.
Finally, the one-time costs include the capital payment tax, which is due in the case of an advance withdrawal of pension assets for the provision of own funds. These costs are often forgotten in the overall assessment of costs. The amount of these costs is again regulated by the cantons and we therefore advise you to obtain exact information about the actual amount from the tax office of your canton or municipality.

Regular costs

Regular or recurring costs are mortgage interest, amortisation, maintenance and additional costs. These costs amount to approximately three to five percent of the value of the property.

Interest must be paid quarterly on the amount of credit lent to you by a financial institution. Interest rates vary greatly depending on the provider, which is why it is essential to compare offers. With amortisation costs, part of the mortgage sum is paid back each year, so that over time more and more of your property actually belongs to you. Finally, maintenance and additional costs make up one percent of the purchase price and must also be calculated into the budget planning each year. This also includes public charges such as any property tax (depending on the canton). But regular renovations and repairs to the house are also included.

Finally, it must also be mentioned that the purchase of real estate also affects the annual tax bill. Interest and maintenance costs can be deducted from your taxable income. At the same time, however, the tax office will charge you the so-called imputed rental value. Generally speaking, various factors must be taken into account when purchasing a home. Before you buy your own home, you should pay attention not only to the regular costs but also to the one-time costs.

We will be happy to assist you and work out your calculation and individual budget together with you. Please feel free to contact us today.