Real Estate Zurich
Housing transaction costs in the OECD area
In OECD countries, roundtrip transaction costs are generally lower 10%.
However, there are some countries that transaction costs are just too high. South Korea has the highest cost of housing transaction, 22% of the value of property in Seoul, according to work by the Global Property Guide.
Transaction costs Belgium, Italy, France, Luxembourg and Greece exceed 15% of the value of the property.
On the other hand, the total costs to purchase a home in Slovakia, Iceland and Denmark are around 3% or less.
Transaction costs are generally between 5% and 7% in the United Kingdom, Norway, New Zealand, Switzerland, Australia, Japan, Sweden, Poland, Ireland and Canada.
Assumptions
To make the calculations comparable, the Global Property Guide has assumed that the property purchased is a condominium, or $ € 250,000 (for European countries) or $ 250,000 for other countries, and located in the financial or administrative capital. This allows us to arrive at a "typical" Figure transaction costs, although transaction costs are a practical range, depending on many factors,.
Transaction cost figures reflect the the purchase of goods old, not new (and therefore in most cases, the value added tax (VAT) is not included). The costs also reflect costs of aliens, not people "(often very different). When foreigners must purchase property through companies, the cost training and maintaining a business is not included.
Costs included in the term transaction costs ":
• Fees Registration
• Legal fees
• estate agents fees
• Transfer Taxes
Property and Capital gains are not included, but they generally must be paid before the property is registered. Costs to acquire the prerequisites to buy goods such that residence permits and business creation are not included.
Over-taxed
high transaction in Korea South costs are largely due to the peculiarity that all property transfers are subject to 10% VAT (only vacant land and government produced housing are exempt).
In most countries, however, as new properties are subject to VAT.
home buyers in South Korea are also required to purchase bonds of home value of 5% of the official price. Product Housing Bonds intended for housing for the poor. In general, most buyers immediately sell the securities at a discount of approximately 10% to 15%.
Buyers in South Korea must pay registration tax (3% of purchase price), tax on education (20% of registration fee), acquisition tax (2% of purchase price), agriculture and fisheries tax (10% of acquisition tax) and stamp duties (maximum of 0.2% of property value).
These fees are intended to curb demand and discourage property speculation. However, in reality, these very high transaction costs exacerbate the housing shortage, adding the overall cost of housing. Housing is more expensive, less people can afford to buy, less is built. The housing shortage may be better relieved by other means – the improvement of transport and rural services, more competition in the construction industry.
French law is a handicap
The average cost of transactions in the French legal origin countries are much higher than anywhere Moreover, as noted in a previous article about European costs (Housing transaction costs in Europe).
The same phenomenon is observed throughout the OECD. The average cost of transactions in the OECD countries with French legal origins are 14.2% of the property value, while in countries of German origin, they are 11.5%, Socialist 7.4%, English 6.5% and 5.2% Scandinavian.
consolidate countries in terms of legal origin reveals institutional differences in property transactions. Sales taxes and transfers are more frequent in French legal system countries. transaction costs return normally exceed 10% of the value of property.
The services of lawyers are the most widely used in French and English legal systems. In several countries with French legal systems, the use of lawyers is mandatory with fees set by law.
Countries grouped by social origin
The common law of England: Australia, Canada, Ireland, New Zealand, United Kingdom, United States
French commercial code: France, Belgium, Greece, Italy, Luxembourg, Mexico, Netherlands, Portugal, Spain and Turkey;
German commercial code: Germany, Austria, Japan, South Korea, and Switzerland;
Scandinavian civil law: Denmark, Finland, Iceland, Norway and Sweden, and
Socialist civil law: the Czech Republic, Hungary, Poland and Slovakia.
Source: La Porta et al, 1999
Restrictions on foreign ownership
Several OECD countries restrict foreign ownership of houses. Iceland and Denmark, only resident foreigners are allowed to buy houses. The property can be used as a principal residence and not as a rental investment.
In Switzerland, the federal government has set an annual quota of permits for non-resident foreigners seeking to acquire property. Typically, large cities such as Zurich, Frankfurt and Lausanne are closed to foreign buyers.
Foreigners need approval of the Administrative Office (AOB) before they can buy a property in Budapest. In Australia, the approval of the Foreign Investment Review Board (FIRB) necessary.
Foreigners can freely buy condominium units in Poland, but the land purchase is a little more complicated. Speaking Generally, a permit from the Ministry of the Interior is required.
In Greece, EU nationals can freely buy property, while there are few restrictions for non-EU nationals. Acquiring property near national borders and in some islands requires special permission from the City Council. This authorization is not granted to non-EU nationals.
In Turkey, property purchases are open foreigners on the basis of reciprocity, namely, the Turkish people must be empowered to purchase real estate property in the country of purchase a property abroad.
In Mexico, foreign buyers need to set up a bank trust called fideicomiso to be able to buy properties. The bank (trustee) holds the trust deed to the purchaser (beneficiary). Although the trustee is the legal owner of the property, the recipient retains ownership rights and responsibilities and may sell, rent, mortgage, and transfer property to heirs.
References:
La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny (1998). "Law and Finance", Journal of Political Economy 106, 1113-1155.
Housing transaction costs in the OECD area (Full Report) – http://www.globalpropertyguide.com/articleread.php?article_id=95&cid =
Housing transaction costs in Europe –
http://www.globalpropertyguide.com/articleread.php?article_id=88&cid =
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