Berlin,Real,Estate,Cost,Buying finance, share, loan Berlin Real Estate - Cost of Buying


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A burning question for investors coming to Berlin concerns the cost to be expected when making a property investment.The cost is directly related to the price of the property to which the fee tables for the notary public and the land register relate. The percentage for the fee is decreasing with a higher price.
  • For a property with a purchase price of € 1 million the cost would be roughly:
  • Notary Public for the contract: € 6,965
  • Escrow account if required (based on € 500k): € 3,020
  • Land Register: € 4,280
  • Property Sales Tax 4.5% in Berlin: € 45,000
  • Agent Commission: Between 4 and 6 % plus VAT, (4%): € 47,600
  • Total: € 106,865
    • For a property with a purchase price of € 2 million the cost would be roughly:
  • Notary Public for the contract: € 13,660
  • Escrow account if required (based on € 1 mill.): € 5,995
  • Land Register: € 8,410
  • Property Sales Tax 4.5% in Berlin: € 90,000
  • Agent Commission: Between 4 and 6 % plus VAT, (4%): € 92,200
  • Total: € 213,265
  • For the quoted size of investment as a rule of thumb it is safe to use 10 % purchase cost for an initial calculation, with higher values reducing the percentage slightly. These figures also identify the items where savings can be achieved:1.    If it is a straight forward purchase an escrow account should be avoided as the saving can be quite substantial.2.    Traditionally in Berlin the commission for the property agent is paid by the buyer. For a long time 6% plus VAT was custom and practise. With the recent influx of international investors these margins have come under pressure, especially with the agents not assuming any responsibility for the information provided by them.The cost of financing will depend on many factors like the amount of equity used etc.. There will be cost for Technical Due Diligence and valuation, "handling fee" between 0.25 and 1 % of the loan charged by the bank and entry of the loan into the deeds register. With the right approach and experience there is also a money saving way of doing this.Naturally there are many more aspects to be considered before making a purchase: Review of the rental contracts, maintenance, ancillary cost to mention only a few of them. Language can be quite an obstacle because an investor can not expect every property manager or care taker to speak English.For a FREE German English Property Glossary there is an options to sign up on the website below.Businesses like Berlin Portfolio Ltd and their network of Real Estate Professionals from Notaries to Tax Consultants and Finance Brokers are specialised in assisting international investors in their investment decisions, providing a "home base" for their activities in Berlin -- before and after the purchase.For more detailed information how to avoid unnecessary cost please visit the website of Berlin Portfolio Ltd. or contact the author using the contact form provided there.

    Berlin,Real,Estate,Cost,Buying

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