480,000 loan too high, experiences?

Hello Steffen,

it would be smarter to split the amount over different terms; this distributes the risk and offers, for example, the possibility to fully or partially repay loans every 5 years and only refinance the remaining amount.

You could/would split the €450K into 3 loans of €150K each with different terms (5/10/15 years or 10/15/20 years).

You have to assess your business yourself, but I trust you to do so after 8 years. Nevertheless, your amount seems high compared to your income – or I have lower standards for my living conditions, you can see it however you want.

It would also be interesting to know the proportion of the land – based on the numbers mentioned, I suspect it is rather high. So what is usually called a "good location". If that is the case, you will very likely also participate in an increase in value or at least the maintenance of value of the land – which I would not necessarily vouch for with every new building from a professional point of view.

Regarding the discussion about the €50K ... you mentioned this amount as gross. If that threatens you in bad years, it is definitely not a problem if you come back to €150K or about €100K on average before and after ... but at €50K gross or approximately €35-40K net, you pay off the "large version" only grudgingly. If there are children or planned children, then that is a killer; you will manage for 1-2 years but then you won’t be able to make special repayments and may accumulate new debt.

Is this a purely residential property or are office spaces to be included?

Best regards
Dirk Grafe

Hello,

a look into the crystal ball helps here If I were you, I would take out at least 15 years. Apparently, there is enough equity & income. This way you gain 5 more years of security

Why is the tax office to blame? It's good that people who earn a lot of money also have to pay taxes! Don't you use public facilities, roads, etc.?

Because the tax office takes all your money away again. The bad guys

Of course, that was meant humorously by Steffen80... That should not be the point of discussion in this thread.

So...first of all, thank you very much for the answers.

The property is 300,000 EUR and has already been purchased (50% equity, 50% bridge financing with a variable loan). So far so good. A 200 sqm house including approx. 40 sqm office space is planned. 370,000-400,000 including ancillary construction costs must be sufficient. Kitchen, moving, exterior can be on top of that.

I will calculate the variants with different terms

: The thing with the tax office was indeed not entirely serious. I am more than happy to pay taxes.... also for Greece, Hartz4 top-up recipients as a business model (DHL, Klier, etc.) or also for distressed companies like Ebay, Amazon etc. headquartered in Luxembourg.

A rate of only 1165 in total?

: Get advice from your tax consultant regarding the office space. Mine immediately talked me out of the idea or rather advises it only as a last resort. Just for fun, calculate how long you can rent an office if you save the construction costs for it in your own house.

With construction costs of €370K, that amounts to a hefty €74K based on 200m² total area – if the space cannot be operated independently (certificate of separability!), meaning it can also quickly be converted/reassigned to the rest of the living space, you cannot deduct the costs as operating expenses; but rent in an external office can.

For an office with 40sqm and €7.50 (!) cold rent, you pay €300/month – €3600 per year, which you can fully deduct as operating expenses. If you assume "only" €50K for the construction costs, you can easily rent for 12-15 years and you don’t have to argue with the tax office.