What are the costs involved in buying a house or apartment? Of course there is the purchase cost, but in addition there are additional costs that it is best to take into account. In this article we list them all. So you can avoid surprises.
1. Price of the property
First of all, the price of a house or apartment is always an asking price. So you can bid less or bid more than what the seller is asking. When the supply in the housing market is greater than the demand for houses, you will find it easier to make an offer below the asking price. When there is more demand than supply, there is a greater chance that buyers will overbid if you make a low offer. Always be careful about this. Never bid more than you can afford. In the end, there are a lot of (hidden) additional costs, often estimated at about 15% extra of your purchase price.
2. Cost of estimating your property
Before the bank will grant you a mortgage, most banks ask you to perform an appraisal of the house or apartment. This way they make sure the value of the home is at least equal to the amount they will lend you. The filing fee for this varies from bank to bank. According to the law, these fees can be a maximum of 500 euros. In addition, the limit of taking out a bridge loan is a maximum of 300 euros. So the processing fee is a maximum of 800 euros.
3. Notary fees
“Notary fees” is a term used to describe the taxes involved in buying a new house or apartment. Under this heading fall these 3 pillars.
3.1. Registratierechten bij de aankoop van een woning
Anyone who buys a house or apartment pays taxes on it. This is called registration fees. You owe this cost to the government when you register a deed or writing, as you do when you buy a home. This cost is in addition to the purchase cost of the house. The notary pays this cost on your behalf. In the end, registration fees often add up to thousands of dollars on top of the purchase price. It is not always possible to borrow extra money from the bank for this, so inform yourself well in advance. The rate of this tax varies by region. Flemish Region: The overview of registration fees*:
- General rate for home other than sole owner-occupied home: 12%
- General rate for undeveloped long-term land and natural assets: 10%
- Reduced rate for purchase of sole owner-occupied home: 2%(conditions)
- Reduced rate for energy renovation of sole owner-occupied home: 1%(conditions)
- Reduced rate for protected moments as sole owner-occupied property: 1%(conditions)
- Reduced rate for purchase of social housing: 1.5%(conditions)
- Reduced rate for purchase of property for social rental: 7% (conditions)
- Reduced rate for purchases by professional sellers: 4%(conditions)
- Reduced rate for purchase of protected monuments: rate halved(conditions)
- Special regime of sales right for exchange of undeveloped estates: exempt, 6% or 10%(conditions)
To meet the 2% reduced rate for a family home, you must meet these conditions:
- The buyer is a natural person.
- The buyer occupies the property within 2 years of purchase.
- The property is a family home.
- The property is zoned as a sole, owner-occupied residence.
Note: A new construction home is subject to 12% registration tax on the land and 21% VAT on the construction(details). A home is a newly built home by law if someone has NOT lived in the home for at least 2 years. So a house that was built in 1980, but no one has ever lived in it, is a newly built house. This is not logical, but is how the rule works. Brussels Capital Region: The registration fee rate is 12.5%. Since April 1, 2023, the first bracket of 200,000 euros has been exempt from registration fees. This is also called abattement. This amounts to an amount of 25,000 euros. To get this exemption, you must meet these conditions:
- The buyer is a natural person.
- The buyer does not own any other property(s).
- The buyer uses the home as his or her primary residence for at least 2 years and stays there for at least 5 years.
- All or part of the property is zoned for residential use.
- The total price of the property does not exceed 600,000 euros.
- The property has been sold (not received via gift or inheritance).
Caution:
- Do you leave the home within 5 years of purchase? Then you must repay the amount of 25,000 euros in proportion to the number of years you actually lived in it.
- Do you sell the home within 2 years of purchase? Then you can apply for a refund of the registration fees. This is a refund of up to 36% of the fees you paid.
Walloon Region: The registration tax rate is 12.5%. In Wallonia, there is a tax advantage on the purchase of a family home:
- Purchase price less than 350,000 euros: The first tranche of 40,000 euros is exempt from registration fees. This amounts to 5,000 euros of tax relief.
- Purchase price between 350,000 and 500,000 euros: The reduction decreases as the price of the home increases. The tax-free bracket is between 40,000 and 20,000 euros. This amounts to between 5,000 and 2,500 euros.
- Purchase price higher than 500,000 euros: The first tranche of 20,000 euros is exempt. This amounts to 2,500 euros.
Want to get this tax benefit? Then you must meet these conditions:
- The buyer is a natural person.
- The buyer does not own any other property(s).
- The buyer occupies the property within 3 years of purchase.
- The buyer will use the home as a primary residence for at least 3 years.
- The property is zoned as a sole, owner-occupied residence.
- The property is entirely zoned for residential use.
3.2. Ereloon van de notaris
Of course, the notary himself must also be paid. This remuneration is called a fee or honorarium. The fee is set by law in the Royal Decree. It is not negotiable. The percentage is degressive: the higher the purchase price of the property, the lower the percentage. It is difficult to put a figure on this. Do you have a property in mind? Then contact a notary (office) for a cost calculation.
3.3. Administratieve kosten
The notary will record the purchase of your home in a notarized deed. This involves administrative costs. You pay these directly to the notary. He or she ensures that the money then reaches the right government agencies. Here is an overview of those costs:
- Registration fee on your mortgage: 1% of the amount you borrow in mortgage, if you take out a loan.
- Mortgage duty: 0.3% on the total sum for which you take out a mortgage.
- Search work: about 1,000 euros for searching extracts in the registry, making the necessary requests, right to writs, etc.
- Third-party expenses: depends on what needs to be requested (e.g., requests for city planning information).
4. Additional hidden costs
On top of all the above points, there are hidden fees that people very often forget about. Keep this in mind before you go to the bank for a loan.
4.1. Verplichte uitgaven
- Mandatory fire insurance.
- Municipal tax: garbage collection.
- Annual property tax (land registry).
- Purchase of furniture, kitchen appliances, cleaning products, etc.
- Advances on your contracts for internet (wifi, ethernet) and utilities (electricity, gas, light and water).
- Moving: gasoline for transportation for your equipment as well as administrative costs (change of address, changes of domicile and identity documents).
- Specific to apartments: common costs (use of elevator, hallway cleaning service, intercom maintenance).
4.2. Optionele uitgaven
- Remodeling/renovation costs.
- Additional insurance: e.g., against theft.
- Purchase broker who helps you search, value, verify and purchase a home.
- Debt balance insurance: if you buy as a couple and one partner dies, this insurance guarantees that the other partner will receive a (partial) repayment of the capital.
- Unforeseen emergencies (repairs, maintenance): optional, but strongly recommended to keep an “emergency” amount in reserve.
Finally, don’t forget your own hours. Ultimately, the whole process of buying a home is a big job. You put in a lot of hours and probably even have to take leave from work at times to get things in order. Even though you are excited about your new home, you will often grit your teeth during the process. Don’t underestimate this time and effort.
Sources: HoeveelKostMijnHuis, Immoweb, Notary & Flanders(*)
Would you like to cite this article as a source? Then use:
Biets, R. (2024, Nov. 23). All costs when buying a house or apartment. Apartment.com. Accessed on (date XX/XX/202X), from https://www.appartement.be/kosten-aankoop-huis-of-appartement/
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