Ancillary costs when buying real estate

When purchasing real estate, there are various additional costs to consider on top of the actual purchase price, which must be factored into your home financing plan. These ancillary costs can quickly amount to several thousand francs and may affect affordability. The most significant additional costs include notary fees, taxes, and reserves for renovations.

Notary fees and entry in the land register

A notary is required for the legally valid transfer of ownership. The notary certifies the purchase agreement and ensures that the property is registered in the land registry. Notary fees are based on the purchase price and vary depending on the canton. You should expect costs of approximately 0.1% to 0.5% of the purchase price. In addition, there are land registry fees, which range from 0.1% to 0.2%.

For an apartment with a purchase price of CHF 800,000, notary and land registry fees can quickly amount to CHF 4,000 to 5,600. These amounts must be available as equity when financing your home.

Taxes when purchasing real estate

Depending on the canton and municipality, various taxes may apply when purchasing an apartment. These include, for example, the property transfer tax, levied when ownership changes. In Bern, for instance, this tax amounts to 1.8% of the purchase price, whereas other cantons such as Zurich do not levy a property transfer tax.

Sellers are often required to pay capital gains tax on their profit. The amount depends on the holding period, the increase in value, and local regulations. Value-enhancing investments can be deducted from the taxes.

Reserves for renovations and repairs

Especially with older properties, it is important to set aside sufficient reserves for potential renovations. Experts recommend allocating around 1% of the purchase price annually to maintain the property’s value. For a home valued at CHF 1 million, this would amount to CHF 10,000 per year.

Inevitably, major repairs to the roof, facade, heating, or plumbing will become necessary over time. After 25 to 50 years at the latest, a full renovation may be required, which can easily cost several hundred thousand francs. By consistently building up reserves, you will be prepared for such expenses and avoid having to finance them through costly increases of your mortgage.