Report: Romanians pay among the lowest taxes associated with a mortgage in Europe
Home buyers in Bucharest pay among the lowest taxes and associated costs in Europe when purchasing a home through a mortgage loan, about EUR 2.500 for an average one-bedroom apartment, according to a market analysis issued by online broker Ipotecare.ro.
The associated costs when buying a home include the property registration fee, notary costs, mortgage loan granting fees charged by financial institutions, the property valuation cost, and the possible fee of the credit broker.
The lowest level of associated costs, reported as a percentage of the price of a two-bedroom apartment, are paid by buyers in Chisinau, of 0.85% of an average property value, which amounts to approximately EUR 1.120, and by buyers in Prague, of 1.08% of an average property value, about EUR 7.450.
The next position is held by Bucharest, where the minimum costs associated with buying a home through a mortgage loan amount to 1.59% of the property value or EUR 2.530. The report considered a value of EUR 107.500 for a one-bedroom apartment.
The largest share of the associated costs in the case of Bucharest represents notary costs, which amount to an average of 1,5% - 2% of the property price, while the mortgage loan granting fee has a value between zero and EUR 200. The property valuation cost has an average value between EUR 100 and EUR 200. The broker’s credit services are free of charge.
On the other hand, the associated costs paid by buyers of a home in other European capital cities are much bigger and could reach tens of thousands of euros for an average one-bedroom apartment. A home buyer in Sofia pays an average of 3.78% of the home price, or EUR 5.125, while a one-bedroom apartment in Budapest pays additional costs of 5.48% of the home price, or almost EUR 10,000.
Costs in Rome can reach 5.66% of the home price, or about EUR 35,780, the biggest cost being the property registration fee, which amounts to 2% of the value, or 9% in the case of a second property owned. At the same time, home buyers in Madrid end up paying minimum associated costs of 7.99% of the property value, which can go up to a minimum of around EUR 20,500, while those in Amsterdam pay minimum costs of around 3% of the property value, or around EUR 15,000.
”The impact of the associated costs is much greater and, considering that the additional costs could reach tens of thousands of euros in other analysed capital cities, they can be a decisive factor in closing the transaction or not. The affordability of buying a home in Romania, given the price/wage ratio, is doubled by the lower level of associated costs,” said Laurentiu Bogdan, managing partner Ipotecare.ro.
Percent-wise, the highest additional costs relative to the home prices are paid by buyers in Vienna, at 11.64%, with total costs rising to almost EUR 56,000 for a one-bedroom apartment, while the highest net amount is registered in Paris, where the minimum total associated costs amount to just over EUR 58,000.
In general, the highest costs are represented by the property registration taxes. If they are equal to zero in Bucharest, in Madrid go up to 6% of the home price, and in London, they vary between 2% and 5% of the property value.
Notary fees vary between 0,2% of the home price in Chisinau and 8% for properties older than three years located in Paris. Mortgage loan fees charged by financial institutions are between zero in Bucharest, Chisinau, and Warsaw, and 1.2% of the property value in Paris, respectively 2% in Rome.
The credit broker services are free in Romania, Bulgaria, the Czech Republic, Germany, Greece, Hungary, and Poland. They can reach 1% - 2% of the home price in Spain, 1% - 3% of the property value in Italy, 3% - 4% of the property price in Vienna, and between EUR 1,300 – 2,000 in Amsterdam.
(Photo source: tsyhun|Dreamstime.com)
