Posted at 20.01.2018 | | in Buying Properties, Market news, News
What to factor in the budget when purchasing Berlin property
We’ve written a lot about the various steps to buying an apartment in Berlin, but there are always little details that get overlooked until you’re in the process. When you’re purchasing property in Berlin, you’ll also need to think about all the costs involved and some of them are less obvious than others.
You’ve gone through the hurdles of researching the city, you’ve gone on appointments to view Berlin apartments, and you’ve finally found the one within your budget, now what? Your perfect home might be within your budget, but both the additional taxes and fees as well as monthly costs make a big difference in what you’ll actually able to afford. We at Black Label Properties highly recommend working with a tax professional, especially if you come from abroad. A tax consultant will be able to give you the various pieces of information of what will be expected of you when you purchase property and after, as well as give you a better overview of the end-price. First of all there will be the agency fee, which averages around 7.14% of the purchase price.
Other fees include:
- (Grundbucheintrag) Land registry fee: 0.5%
- Property transfer tax: 6%
- Notary fees: 1-2%
Most people don’t have enough funds to buy an apartment in Berlin in one fell swoop, so understanding bank loans and possibilities available to you will be a big part of the purchasing process. Knowledgeable financial advisors will be able to find you the possibilities that best fit your situation and help take you through the process. Obtaining a loan from a German bank is different as a foreigner, but you’ll often be able to get a loan of up to 50% of the property value.
If you’re thinking of buying Berlin property as an investment and letting out the apartment, you’ll also want to consider hiring a property management service (Hausverwaltung). Also if you’re considering renting out the apartment, it’s good to consider furnishing the apartment first to attract more renters. You can purchase all of the furniture yourself and move it into the apartment, but there are also services with complete furniture packages to handle the style and process for you as well.
After you’ve calculated the purchase costs, and you’ve made sure you have the financial means to buy Berlin property, there will still be additional costs down the line. Most apartments in Berlin do not come with finished kitchens, so must first-time apartment buyers will need to factor in the costs of kitchen appliances: refrigerator, dishwasher, stove etc. as well as the installation costs. Radio tax, albeit not a great cost, will also be a monthly part of your bills as well.
At it’s simplest, you should expect to spend about 15% of the purchase price on the necessary elements. After those initial additional costs, you’ll need to consider what you want to do with your new apartment and take a look at the steps needed. While it’s good to research on your own, speaking with professionals is always the best way to get a well-rounded and informed overview of what to expect.