Young buyers underestimate additional costs

According to a survey conducted by Axa Banque among 1,000 young people aged between 22 and 35, many of them are unclear about the additional costs added to the price of the property they wish to purchase.
The survey found that only one in three young buyers is able to estimate the total cost correctly.

If there is only one thing to remember, it is this: the price of a property = the sum of the various costs, not merely its purchase price.

To help them, we have compiled a list of the costs to take into account.

1. Property tax

This is an annual regional tax. It is determined by the type of property, its location, the composition of the household, the number of dependants, etc. This means that the property's rental value (known as cadastral income) is assessed in order to calculate the tax for which you are liable each year.

2. Registration fees

• In the Brussels-Capital Region, registration duties amount to 12.5% of the property price. However, if this is your first purchase, you will benefit from an allowance of 175.000€, meaning that you will no longer pay registration duties on the first 175.000 € (equivalent to a saving of 21.875 €)! Registration duties are a tax levied by the REGION.
• In the Walloon Region, registration duties also amount to 12.5%, with a possible allowance of 20.000€.
• In the Flemish Region, registration duties amount to 6% (with a possible allowance of 15.000€) when purchasing a sole property to be used as the family home. In all other cases, the rate is 10%).
  
  N.B.: Sales of new-build properties or properties under construction are subject to VAT rather than registration duties. In principle, the VAT rate is 21%.

Please note that when purchasing a modest home (with a cadastral income of less than 745€), registration duties may be reduced.

3. Notary's fees

A ‘notarial deed’ means fees! Do not forget to include them in your calculations, as they represent a fairly substantial sum. The fees are set by law and represent a percentage of the purchase price of your property; this percentage decreases on a sliding scale (allow approximately 1000€ for a loan of 300.000€). These rates are calculated excluding VAT; VAT is therefore an additional amount to take into account.
In addition to the fees, you should also allow for the administrative costs associated with the various searches the notary must carry out to ensure that the sale proceeds correctly. The amount of these costs depends on the workload involved in your purchase. You should allow approximately between 800 and 1100€.

In addition, the mortgage registration costs 230€; this involves registering the notarial deed with the mortgage registry, which must hold a copy of the original deed.
Online tools are available to calculate these costs. We recommend the tool provided by notaire.be, which is reliable and provides a precise breakdown of what each item includes.
CALCULATE THE COSTS OF YOUR PURCHASE DEED

4. Mortgage deed costs

The costs do not end there (that would be too easy). You must also register your loan with the notary.
The registration duty on your loan is 1% (regardless of the region). It is calculated on the basis of the amount borrowed and the ancillary costs associated with the loan (insurance premiums, for example). This tax is transferred to the State.
The mortgage registration duty is 0.3% of the amount borrowed plus ancillary costs; this tax is also transferred to the State.
CALCULATE YOUR MORTGAGE DEED COSTS

5. Administration fees

You will pay administration fees to your bank for setting up your loan. Administration fees are capped at 500€.

6. Insurance

• Fire insurance varies very little between providers; allow approximately 250€ per year for an average-sized house. You can take out this insurance with your bank as part of a mortgage loan and may therefore sometimes benefit from additional advantages, but you are under no obligation to do so.
• Outstanding balance insurance protects your loved ones should you die unexpectedly during the repayment period of your loan. The insurance may cover the entire loan or only part of it. Although this insurance is not legally compulsory, it is generally required by the lender. Please note that you are under no obligation to take out this insurance with the same provider that granted your loan, so do not hesitate to compare offers, as the amounts can vary considerably. However, taking out the insurance with the bank providing your loan may be taken into account when negotiating your interest rate!
  
  Other supplementary insurance policies are available in addition to these two ‘basic’ policies, although they are not compulsory.

As you will therefore have gathered, the total amount of associated costs when purchasing an existing home is between 10% and 20% of the purchase price, with variations depending on the region, the size of the property, etc.