In a modern state, taxes cannot be escaped, especially when it comes to buying an apartment. This important operation on the path to the cherished freedom in personal space is accompanied by many additional processes, which professionals and relevant authorities will be happy to help you cope with. We have previously talked about how to become the rightful owner of the apartment. But that's not all! What you will have to face and how much to spend on all this - we will tell you about this in a new material. Lawyers, real estate agents, notaries and government agencies, as well as the chefs in the restaurant where you will “wash” your purchase with your loved ones, work for more than one sincere “thank you”...
To the cost of the apartment you will have to add...
With the purchase of real estate, associated expenses go hand in hand. Their size and number may vary in specific conditions and largely depend on the object itself. In most cases, you will face the following additional costs:
- real estate valuation is not mandatory. The need for such a procedure may arise when the buyer takes out a loan from a bank. An accurate determination of the market value of the property will convince the financial institution that every penny will be spent for its intended purpose. The cost of assessment can range from 1 to 500 hryvnia and depends on the location and characteristics of the specific property
- When re-registering real estate and registering it in the state register, an appropriate registration fee is charged, which is 1% of the value of the property. There are certain limits beyond which its size cannot go - from 3 to 400 hryvnia
- VAT or value added tax will have to be paid if the seller is a legal entity. This tax is 20% of the total amount
- Paying an annual property tax for “extra” square meters or exorbitant luxury has become an unpleasant, but obligatory tradition for those who already own an apartment or house. If the seller did not worry about paying this tax in advance, the new owner will have to pay it after signing the appropriate agreement on the transfer of property from one hand to another. You can find out more about this tax in the relevant article on our blog
- Just signing an agreement and handing over the keys from hand to hand is not enough for the transaction to be considered closed, and most importantly, legal. Only after its official registration can you proudly call yourself the rightful owner. Only a notary can certify the legality of the transaction and your new status. The average price tag for a specialist is 1-3% of the value of the property, but it cannot be less than 5 hryvnia
- the realtor's commission is within the same range
- Without qualified legal advice, you will not be able to make sure that all documents are drawn up correctly and that there are no scammers hiding on the other side of the contract. You have to pay for your peace of mind and safety
Here we immediately want to point out a great way to save a little. Why do you need to hire a lawyer and a realtor separately if you can contact a real estate agency? THE Capital and get the “2 in 1” service? We offer each of our clients qualified assistance from our experts and lawyers. We will accompany you at all stages, make sure of the reliability of the other party and relieve you of the smallest doubts that can torment your soul with such large and expensive acquisitions.
Not only taxes, but also fees: additional expenses when buying an apartment
When calculating the required amount from your savings to purchase an apartment, be prepared to include a little more than planned in your initial budget. In addition to the expenses already mentioned, you may encounter fees - pension and military.
- Pension fund fee – 1% of the property value
- Military tax – 1,5% of the property value
Despite their different sizes, these taxes have much in common. As a rule, they can be included in the costs associated with registration and conclusion of the purchase and sale agreement. Most often, both of these taxes are paid by the seller, but this issue is resolved on an individual basis. Payment of fees may become the responsibility of either party in whole or in part. It is not uncommon for cases when, for convenience, the buyer and seller decide to divide responsibilities among themselves - one pays taxes, and the other covers the cost of notary services.
When purchasing real estate, you can be exempt from the Pension Fund fee if you meet at least one of the conditions:
- this is your first real estate purchase
- you are registered in the waiting list for housing
Even if you couldn’t avoid additional expenses, don’t attach much importance to them, because in return you get the apartment you’ve been dreaming about for so long and which you were lucky enough to find among thousands of options on the market.
