How Much Does Housing Really Cost? A Guide to Additional Purchase Charges
How Much Does Housing Really Cost? A Guide to Additional Purchase Charges
Buying an apartment is an investment that is not limited to the price of the property. Young investors and people buying their first apartment are often surprised by the list of additional fees, which can increase the total cost of the purchase by several or even more than a dozen percent. Awareness of all the costs associated with the purchase of an apartment is crucial for proper budgeting and avoiding unforeseen expenses. Below is a list of the most important additional fees to consider when planning to purchase a property.
1. tax on civil law transactions (PCC)
The tax on civil law transactions (PCC) is an important cost for those buying an apartment on the secondary market. Its amount is 2% of the value of the apartment and is paid by the buyer when finalizing the transaction. In the case of primary market apartments purchased from a developer, this tax is not charged, which is a certain financial convenience for those buying new real estate. However, it is worth remembering that in the case of used apartments, the PCC is one of the more significant fees.
2 Notary Fees
The costs associated with the services of a notary public is another important expense that must be incurred when buying a home. A notarial deed is a document required to complete the real estate purchase transaction and secure the buyer’s rights to the property. Notary fees can range from 1% to 2% of the value of the apartment, and their amount depends on the so-called notary’s fee, the maximum rate set by law. In addition, costs may include the issuance of extracts from the notarial deed, which are also payable and depend on the number of copies required.
3. notary’s fee
Notary fee is the fee that a notary sets for drafting a notarial deed. Although its amount is regulated by law, notaries have the ability to adjust it depending on the value of the property and the region. For example, for higher-value apartments, the fee can reach several thousand zlotys, which means that it is worth finding out in advance the exact cost of the fee before signing the contract.
4 Judicial Fees
When buying an apartment, it is necessary to establish or update the real estate register. Court costs for establishing the land and mortgage register are a one-time expense of PLN 200. If the buyer finances the purchase with a mortgage, an additional fee is the registration of the mortgage in the land and mortgage register, which costs PLN 150. Land and mortgage registers are a guarantee for the buyer that the property being purchased is not encumbered by other obligations, and that all rights are duly recorded and protected.
5. commission to the Intermediary
If the purchase of an apartment is made through a real estate agency, the broker’s commission must be taken into account. It usually ranges from 2% to 3% of the value of the apartment and is paid by the buyer or, depending on the arrangement, shared between the buyer and seller. This cost can be a significant burden on the budget, so it is worth checking carefully what services the commission covers and whether the intermediary helps with documentation issues, price negotiation or notarial formalities.
6 Credit and Property Insurance
When financing a purchase with a mortgage, banks require property insurance, which is designed to protect the lender in case of damage to the property. The cost of insurance can range from several hundred to several thousand zlotys per year, depending on the value of the apartment and the extent of coverage. In addition, some banks require life insurance for the borrower, which increases the total cost of the loan, but also provides financial protection for the borrower and his relatives.
7 Finishing and Adaptation Costs
If you buy an apartment from a developer in shell condition, you need to factor in finishing costs, which can significantly affect your budget. Finishing includes, among other things, installation of floors, painting, installation of lighting, doors, and bathroom and kitchen equipment. Finishing costs depend on the standard of the finish and the buyer’s preferences, but it can be assumed that they will be around PLN 1,000-2,000 per square meter, which for a 50-square-meter apartment adds up to an additional cost of about PLN 50,000-100,000. In the case of apartments from the secondary market, there may be a need to refresh the interior or carry out minor renovations, which also generates additional expenses.
8 Property Management Fee and Initial Rent
When buying an apartment in a new building, it is worth taking into account the rent, which is charged by the developer from the time the apartment is taken over until the establishment of a housing community. Often these amounts are intended to cover administrative costs and maintenance of common areas. In addition, developers sometimes charge a fee for managing the property for the first period, such as the first year, which can be an additional expense.
9. charges for utilities and installations
When buying an apartment in developer condition, the buyer often has to pay the cost of connecting utilities, such as gas, electricity and water. While these fees are usually minimal, they can vary depending on the location and developer. It is also worth checking whether the developer provides an Internet connection, which is already standard in modern buildings, but in older ones may require additional installation work.
Summary
The total cost of buying an apartment includes much more than the price of the property itself. Planning a budget for additional fees related to taxes, notary, finishing or insurance allows you to avoid financial stress and surprises. When buying an apartment, it is a good idea to study all costs in detail and prepare a budget that includes even the less obvious fees. This will make the process of buying an apartment go more smoothly, and the investment will be more predictable and well protected.
