Incidental costs in the case of property purchase

When buying a property, the purchase price is not the end of the story. The acquisition of a real estate always brings also purchase additional costs with itself. These amount to approximately 10.1% of the purchase price. Unfortunately, most of those can't be saved either. Incidental purchase costs also play a role in financing the purchase of land through credit.

Here's what's important in a nutshell

  • When buying a property, not only the purchase price is due but also incidental costs.
  • The additional purchase costs amount to approximately 10.1% of the purchase price.
  • Land transfer tax, land registration fee, broker's commission and notary's fees all fall into the category of incidental costs when buying a property.
  • Financing through the bank also generates ancillary costs.

How high are the additional costs when buying a plot of land?

Of course, it is not possible to say in general how high the incidental costs of buying a plot of land are. Although many of the items are incurred in any case, some are variable or do not come into play at all. The guideline value of 10.1% of the purchase price gives a first orientation, in order to be able to estimate as a consumer, what I can afford at all.

The following incidental charges apply in this 10.1%:

Land transfer tax

Real estate transfer tax is one of the largest expenses in the purchase of a plot of land. It amounts to 3.5% of the purchase price. This tax is a one-time payment that is due when the contract is signed, not when the land is registered in the land register.

There are very few possibilities in Austria to be exempted from the real estate transfer tax. The petty cash limit of € 1.100,- is also hardly applicable. Therefore, anyone who acquires a property (it does not even necessarily have to be a purchase) should expect to pay this tax.


The real estate agent, if one was involved in the purchase, also wants to be paid after signing the contract and issues a fee note for his services. These fees are capped by law and may not exceed 3% of the purchase price. On top of that we have to pay 20% sales tax. Percentage wise more expensive in the brokerage are cheaper properties.

Under € 36.336,42 the broker may demand a maximum of 4%, between € 36.336.42 and € 48.448,51 the maximum commission is € 1.453,46. But these are upper limits, which must not be exceeded. That doesn't necessarily mean the buyer has to pay for it.

It is up to the skill of the buyer and the extent of the commissioned brokerage activities, how high the commission in the end turns out to be. Whoever actively sends the real estate agent in search of a property must expect higher costs than someone who has only made two visits to the desired property. A broker's commission does not arise at all if the purchase is completed entirely without a broker.

Land registry entry

The land registration consists of two parts:

  • The entry of the new owner in the ledger, which makes the acquisition of the property legally binding in the first place.
  • Registration of the bank's lien in the register of encumbrances.

The former is charged with 1.1% of the purchase price. This fee becomes due only with entry into the land register. Naturally this should take place promptly to the signing of the contract, since otherwise the buyer without legal security stands there. The mortgage for the loan is also deposited in the land register.

For it once again 1.2% of the pledge, speak the financing sum, result. In the rare cases where no outside financing is required for the purchase of a property, the registration of the lien obviously does not come into play. The 1.1% of the purchase price for the land register

Notary and/or lawyer fees

Also the costs for the notary and/or lawyer are variable. Only the notarization of signatures at the time of signing the contract can not be saved in any case. These are also non-negotiable, as they depend on the assessment basis (purchase price, amount of lien) and the respective chamber tariff. On the one hand, the purchase contract itself is notarized, on the other hand, the lien of the bank is also notarized. Both notary acts are necessary to certify the authenticity of signatures, which in turn is essential for the land register entry.

A variable related to notary or lawyer fees is the contract processing. If one of the two instances writes the contract, this offers legal security, but also costs. Besides, you need either notary or lawyer also for the fiduciary settlement. The trustee makes sure that both parties get what was agreed upon:

The buyer the property and the seller his money. There is, of course, the possibility of combining all these services together. Then it definitely makes sense to negotiate a flat rate. Whether it is more favorable to handle everything directly with the notary or to involve him only for the certification must be compared. It is best to obtain several offers here as well.

What does not fall under the incidental purchase costs?

When buying a property, there are other ancillary costs that have nothing or nothing directly to do with the purchase. Nevertheless, one should calculate these from the beginning with, in order to prevent bad surprises.

Ancillary credit costs

Actually, the registration fee of the lien should also already be placed in this category, since they are related to the financing, not directly to the purchase. Aside from this item, other fees come into play when financing through a mortgage loan.

Borrowers often make the mistake of comparing only the debit interest rate in offers. However, this is only one of several factors that distinguish financing.
In addition, there are the following costs:

  • Processing fees
  • Appraisal fees
  • Possible premiums for credit default insurances
  • Account management fees

Except for account maintenance fees, these items are included in the so-called APRs. Therefore, it makes more sense to compare the effective interest rate than the nominal interest rate of different offers. If you can't find your way through the jungle of bank offers, you would be well advised to hire a financing specialist.

INFO: On the subject of financing, it should also be mentioned that banks always consider the incidental costs of purchase to be the responsibility of the borrower. Even with the very best credit rating, at least the ancillary costs of the land purchase must be covered by the company's own funds. As a rule, however, banks require 10% – 30% of purchase price PLUS incidental costs as equity from the buyer.

Development costs

Another, often forgotten cost factor, is the development of the property. These costs are also not included in the incidental purchase costs. Depending on location and preparation, the development can be expensive even before construction begins. Newly parceled properties usually have the advantage that the required connections have already been run to the property line.

Meant are water, electricity, gas (or heating) and sewer connections. Before purchasing the property, it is therefore advisable to obtain information in this regard:

From where must the connections to the property be led?

Because the costs depend on this.

Incidental costs in the purchase of land summarized:

When buying a plot of land, one must expect incidental costs of about 10.1% of the purchase price. These consist of: Land transfer tax, land register registration fee of the property such as the lien of the bank, broker commission and costs for notary and/or lawyer. Some of them, such as the broker and notary fees are variable, the others, unfortunately, are not.

In addition to the ancillary costs of the purchase, financing through the bank also generates further fees, which are referred to as ancillary credit costs. Not to be forgotten with the land purchase also the development costs, which are indispensable for the house building. Neither ancillary credit costs nor development fees are included in the 10.1%.

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