Heritable building right experiences - cost trap or no problem?

Hello,

unfortunately I didn't find anything about it in the search function, namely I could get a [Erbpachtgrundstück] and I'm not sure what to do, does anyone here have experience and has built on a [Erbpachtgrundstück].

The plot is about 900m², the [Erbpacht] is supposed to be about €950 per year, plus €45,000 development costs.

What do you think about the price and costs? The [Erbpacht] can change, how often is the [Erbpachtzins] recalculated, and what increases are to be expected? The plot belongs to the Catholic Church.

Looking forward to your experiences.

We have a leasehold. What do you want to know?

Price depends on the region. We pay about 2300€ for 650. The conditions are contractually regulated: dynamic adjustment, term, etc. You should have this as well. Our increase this year (after 5 years) is 70€ per year. The church as a giver is always good because they waive the first ranking in the land register for the bank. This is very important for the bank regarding the loan. You pay less than 90€ per month for the land. That is ridiculously low. Now come those who have never dealt with heritable building rights and speak badly of the model. That is always spoken lightly, also from acquaintances and friends. Surely there are disadvantages, but also advantages. Basically, you can do whatever you want with the land. Your house will certainly be demolished rather than the contract expires.

Heritable leasehold is great, especially at that price. It is currently out of fashion due to low interest rates. Financing is often not more expensive than leasing. And in the end, it belongs to you. Nevertheless, for the price you mentioned, it is worthwhile. Where is the problem? Do you have to own the land or is it enough to possess it? Usually, the latter is enough.

Well, I'm not a fan of it, but the church as a large landowner is reluctant to part with its land and you can't really choose otherwise. As for me, I always wanted to have everything. But if you can save money on the land, that's also OK.

What surprises me are the €45,000 development costs. What is included in that and is it normal?

Why? It is obviously still undeveloped, but cleared for construction land. The church therefore receives, with a leasehold duration of 99 years, around 100 euros rent per sqm over time. That is very fair. Imagine what a bargain price that will be, say, in 2045. Then they probably pass on the development costs as a one-time payment. If they were to include them in the rent, they might have to finance it themselves now, which they apparently do not want. Those are the rules. And they will get rid of it, bet? At that price always. Karsten