Land first or construction project first?

Hello!

We have the following situation:

The financing is almost complete. We just need to decide with which bank we want to finance.

The plot of land is reserved and we have a (pre-)contract.

The house is almost completely planned with the construction company and is only waiting for the contract to be signed.

Now, the construction company is running a discount promotion until the end of November. Of course, we would still like to take advantage of it. But that would mean that we sign the construction contract before buying the plot of land.
We were whispered to that this has a very annoying side effect with the notary regarding some payment, as the future value of the house is taken into account there and not just the plot of land.

Is that really the case or can I sign the construction contract without any concerns before buying the plot of land (the two have nothing to do with each other, so no property developer), since these are two separate legal transactions?

Hello Evolith,

based on my own experiences, I would definitely not do that. Possible problems that could come up for you (depending on the contracts):

- You sign, take out the loan, and the land purchase is delayed or does not take place. Then it may be like in our case, that you pay commitment interest even though construction has not even started yet

- There was someone in the forum who did it that way, but for some reason had to pay the property transfer tax on the house construction price as well... best to search for that

- The house building companies always have some kind of discount promotions.... don’t let yourself be pressured by that. If the pressure from the company gets too strong, I would start to think about whether you really want to entrust such people with the construction of your own home...

Hello matthias84! The company is not putting any pressure. We were only once reminded not to lose sight of November 30th. So very discreet. If necessary, I'll take it easy too. I won't let myself be rushed.

I had already looked, but apparently I was missing the right keywords. I need to fire up the machine again.

Aunt Edit: I looked again. Those were all cases where the property was acquired or at least searched for through the construction company. No such connection exists between ours. But I'll inquire with the tax office to be sure.

I'll try to present it somewhat simplified for the layperson:

In the Real Estate Transfer Tax Act, there is a difference whether the real estate transfer tax must be paid only on the land or on the land and house. The point in time considered is the purchase of the land. If at this time you are no longer free to decide with whom you build, the real estate transfer tax applies to both. That would be the case for you. The risk would therefore be 6.5% (for NW) on the house price.

If it is not already clear that it is a property developer transaction (land and house from a single source), such cases are avoided by having the date on the construction contract after the notary appointment or by having any withdrawal clauses whose decision is still pending after the notary appointment. A lawyer or tax advisor can surely provide more details.

Ah thanks. That’s really nasty then. We will probably sign the BV only after purchasing the property to be safe. 6.5% on the house construction sum is not exactly little.

I just spoke again with the tax office responsible for the region.

Property tax applies to both if there is a clear connection, meaning the developer mediates or sells the land.
In our case, there is no connection because we found and are purchasing the land as private individuals and basically have the construction contract independent of the land.

He also pointed out that if you really want to do it that way, you should urgently include clauses in the construction contract that allow for withdrawal if financing or the land purchase is not possible.

Nevertheless, we will probably prefer to take it easy and do everything step by step. In the worst case, the discount is simply gone.