What are the costs associated with the property?
Investing in real estate means building wealth, but it is also ancillary costs that must be anticipated.
Two types of costs are to be noted: the costs of acquiring the property and the costs during the entire holding period of the same property.
What are the costs of acquiring a property?
- Notary fees, which include notary fees but especially transfer taxes (taxes and other standard registration and management fees) accruing to the State. It does not matter if you buy in the new or the old.
🖊 Also note that notary fees on the acquisition of an old property are valued at approximately 7 or 8% of the price against 2 to 3% of the sale price for new real estate!
- Real estate agency fees (if you go through a real estate agency). Agency fees represent a significant sum that will inflate the overall cost of your transaction from 1 to 7% of the selling price, approximately.
OR Brokerage fees (Unless you have decided to sell your home on your own, you can do business with a real estate broker)
- Moving expenses, which are ancillary costs not to be neglected when completing your real estate purchase budget.
- The financing application fees / the guarantee fees of the mortgage (mortgage, mutual or personal guarantee, collateral, death / disability insurance for this loan, registration in Lender of Money Privilege (PPD))
Note that there are also discharge fees: When selling your property, the notary will have to cancel your mortgage and therefore, remove it from the land register.
Some definitions :
- Collateral : This last type of guarantee is reserved for those who already have a substantial patrimony and can afford to give as collateral other investments.
- The PPD : This type of guarantee is very similar to a mortgage. Where the PPD is more interesting than the latter is that there is no land registration tax.
- The mortgage : In case of default on your part on the repayments of your mortgage, the mortgage taken by the bank on your house or apartment allows him to seize it. Your home is then sold at judicial auction to make up the amount you still have to repay.
What are the costs associated with holding a property
- Local taxes, it is essential to find out about the local taxation of the place where the housing you plan to acquire is located. In the case of Paris, local direct taxation includes:
> Property tax on built properties (TFPB)
> The territorial economic contribution that is paid by companies and is composed of the business property assessment (CFE) and the contribution on the added value of companies (CVAE).
- The payment of water after the survey made at the end of the year (this can be paid monthly)
- Co-ownership fees: it is a question of participating financially, like all other co-owners, in the realization of major maintenance work on a building such as the installation or renovation of an elevator, the maintenance of common areas, the renovation of facades, etc.
- The repayment of a credit
- The housing tax which is established according to income and your dependents, which is also the responsibility of the tenant (if rental investment there is). A gradual abolition of the housing tax applies according to income. From 2023, no household will pay council tax on its principal residence.
> The housing tax depends on your accommodation, its location and your personal situation (income, composition of the household ...) on January 1st.
- The audiovisual tax or TV licence fee
- Property tax (only the responsibility of the owner)
- Compulsory home insurance. Home insurance helps protect the family patrimony. This type of contract mainly covers damage to property, the civil liability of the insured and the civil liability "private life". There is no law that requires you to take out a property and casualty insurance contract.
- The tax (or fee) for the removal of household waste
Ce qu’il faut retenir :
- Investing in real estate is building wealth,
- It is necessary to anticipate certain costs
- Two types of costs are to be noted: the costs of acquiring the property and the costs during the entire holding period of the same property.
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Posted on 03/11/2022 by
Andy LECUYER
