Just as high as with ownership. At least I hardly see any ads saying "House to give away, but the land must be paid for," and if so, they are building ruins.
Apart from that, there is compensation when the leasehold expires. And this compensation the municipality cannot and will not afford. So the leasehold is extended. That's how it looks in 99.9% of all cases in the last 30-40 years.
Please just be concrete for the OP and don’t babble. You don’t really want to calculate correctly either ;-)
The land would cost €420,000 if bought or with a leasehold interest of €3,500 per year.
Now let's reduce the 75 years to 40 years, since the OP will not live in the house for 75 years. Thus, with normal usage duration, it’s €140,000 in leasehold interest. He didn’t mention any adjustments to the CPI in any way (it was about 1% in the last 5 years) – assuming 1% annually, that’s €171,000 paid in 40 years.
Of course, he has no ownership, but by signing the leasehold contract, he immediately saved a quarter of a million. That’s the key factor.
Who cares what happens in 75 years? TODAY I want to build. And either I go to the bank and borrow €420,000 and pay about €525,000 in 40 years (calculated as a 40-year loan with 1.2% interest and 2% repayment). So either a €1,120 monthly payment to the bank or initially €263 to the leasehold issuer. For someone who wants to build, that’s only a mere €857 more per month (which reduces to still €690 monthly in year 40).
This calculation contains exactly the huge advantage of leasehold. You can simply build cheaper = more liquidity-friendly.
Give me an objective reason – not the feeling of ownership or inheritance – why one shouldn’t have signed the leasehold contract yesterday at the latest.
The objective reason is actually quite easy to find:
After 40 years, he has paid €140,000 for the leasehold, which is gone, of which he has nothing left. If he had paid the same amount for a purchase property in the same period, this money would still be available to him because a higher purchase price could be achieved upon sale.
Maybe one does not live in the house until death, but wants to downsize, move to an apartment, a retirement home, etc. Then it’s quite nice if one has saved this sum oneself.
If it is not otherwise possible, it is certainly an opportunity. But something great is something else.
