The Additional Costs When Purchasing Real Estate
When purchasing a property, you are making a major financial decision that can significantly impact your personal and financial future. Therefore, it is essential to carefully plan your real estate purchase – including a detailed calculation of all associated costs.
What additional costs are incurred beyond the purchase price?
In addition to the property purchase price, there are further costs associated with acquiring real estate in Austria. These additional costs are made up of various elements – some of which you can influence, while others are beyond your control.
Contract drafting costs
For a legally valid transaction, a contract must be drafted, notarized, and registered in the land register by a legal professional. The costs for this service, including escrow handling, usually range between 1% and 3% of the purchase price plus VAT.
Land register entry fee for ownership transfer
Although the notary or lawyer prepares and submits the application for registration in the land register, the fees for this process are charged in addition to the contract drafting costs. The land registry office imposes an entry fee of 1.1% of the purchase price. This registration is crucial to legally secure ownership of the property.
Land register entry fee for liens
If you, as the buyer, need to take out a loan to finance your property, the financing bank will require a lien to be entered into the land register as collateral. This entry incurs additional fees of 1.2% of the loan amount registered as a lien. Here, you may have some leeway: the lower the registered loan amount, the lower the entry fees.
Real estate transfer tax
One of the most significant additional costs is the real estate transfer tax, which is always incurred when buying property. In Austria, this tax is generally 3.5% of the purchase price. Exceptions include gifts and inheritances, which are subject to a reduced tax rate of 2%.
Real estate agent’s commission
If a real estate agent assisted you with the transaction, commission fees will apply. In Austria, agents may charge a maximum of 3% of the purchase price plus VAT for their services. Typically, agents’ fees are split equally between the buyer and the seller, although individual arrangements may vary.
Better advice with BAMBERGER IMMOBILIEN
In total, the additional costs for purchasing real estate in Austria amount to approximately 10% of the agreed purchase price. If you wish to reduce these costs, there are several ways to do so. For example, you can try to reduce the requested loan amount – by using more equity or contributing more personal work during renovations – and work with a BAMBERGER IMMOBILIEN partner for contract drafting. We can recommend a broad network of experts who can provide top-notch services at a great price.
As your real estate agents, we always strive to negotiate the best possible price for your property in Salzburg. We are happy to assist you in discussions and negotiations with the seller. Ideally, we can reduce the purchase price – and consequently the additional costs of acquiring the property. Feel free to seek comprehensive advice from our experienced team at BAMBERGER IMMOBILIEN!