Buy apartment, then buy/exchange house - tips

Hello everyone,

my wife and I are currently in a somewhat tricky situation and maybe someone here can help me.

Situation:
We have been searching for a property for about 2 years and it has always been our dream to own a single-family house. At the moment we are renting. Since my girlfriend’s father is in need of care and my wife will be working again after 1-2 years (bringing the children to the parents-in-law), only a property in one or two municipalities is an option for us. Recently, a new development area was released in the dream municipality based on a points system, and unfortunately, we did not get one. We do not have children yet but they will come in the next 2 years.

In a few weeks, apartments will also be offered for sale in the same new development area. My wife now wants to buy a 4.5-room apartment with a small garden (we estimate about €480,000 excluding additional costs), but I would wait until the other new development areas (2 more are coming) are developed and try again.

Together we have a net income of about €5,300 and currently equity of €140,000. The planned annuity should be about €1,800 - €2,000 per month.

Now my question:
If we actually decide to buy an apartment and take out a loan of about €400,000 and then suddenly do get a property (purchase price about €250,000 + house in at most 1-2 years), would there still be a possibility to buy the property or would the bank never grant a "second loan" or another option?

The decision is really difficult for us. If the apartment is bought, the dream of the house will probably fall apart. And if we wait for the property (and don’t buy an apartment), there is the risk of ending up empty-handed if we don’t get the property.

We would be very grateful for tips or advice, maybe someone has faced a similar situation.

Best regards

Simon

An apartment for 480 TE with 10 to 13% incidental purchase costs would mean shooting away 50 to 60 TE of no longer replaceable powder!

Spread over an assumed 4 years until moving into a fictitious house, that would be 1200 per month - just for the incidental costs when buying. As mentioned, you won’t get these back when selling anyway, that’s gone and may possibly hinder the financing of the house later. I wouldn’t speculate on capital gains here.

With part of the 1200 euros, you could better rent a three-room apartment risk-free for that long (usually sufficient for 2 small children) and further increase the buffer. And please don’t get into a panic of missing out, that’s a bad advisor. In parallel, you could increase your search efforts for building gaps: actively search and inquire, start the grapevine or offer about 5 TE reward for tipsters ;o)

For 1-2 years, capital gains tax will probably also be added, prepayment penalty, and the property will probably not achieve the same sales value.

With 1-2 years, a speculation tax probably applies, prepayment penalty, and presumably the property will not achieve the same sales value.

There is no speculation tax! And with owner-occupancy, the profit is also tax-free. However, there will be no profit after 1-2 years. The financing can be fixed for a short term or transferred to the house.

I would buy the apartment. But I am also an advocate of the view that a property is just a utility item. You can take over the financing, no speculation tax applies. With 3% repayment, the ancillary purchase costs are covered again in about 3.5 years. I do not see the property drastically losing value in the coming years if it is in a reasonable location and has good quality. If you then do not get a suitable plot of land, you will be doubly annoyed.

there is no speculation tax! and with owner-occupation the profit is also tax-free. However, there will be no profit after 1-2 years. The financing can be fixed short-term or taken over on the house

Of course there is, and with owner-occupied properties the period is just shorter. We recently discussed this with a new user who was affected.