New construction - now, in 3 years, or never?

  • Erstellt am 2024-12-29 00:56:33

helen85

2024-12-29 00:56:33
  • #1
We bought a plot (semi-detached house) through a municipality. Plot - 400 sqm Purchase price with development - €380K (equity €19K, financing €361K) Building obligation - 3 years The neighbor’s house is already standing. The development plan requires the same profile as the neighbor’s house. A rough price (without basement) from a solid construction company: With 140 sqm living space, about €420K. Plus kitchen, furniture, etc. We would need to finance a total of €600K. Monthly payment is 45-50 percent of our net income. Current monthly expenses: €3K (cold rent €800 included) One child in kindergarten, no other child planned. We both will turn 40. Future salary growth is hard to estimate. I ask for your experiences and tips to estimate the further course of action, whether we should build the house. If not building and returning the plot to the municipality, how much money would we probably lose? Notary, bank interest, property transfer tax, what else? Many thanks to you!
 

ypg

2024-12-29 01:17:29
  • #2
How are the expenses broken down, and what are your salaries?
 

HilfeHilfe

2024-12-29 06:19:20
  • #3
What are you currently saving? Are large salary jumps through changing jobs realistic?

When I hear a 40-50% burden through installments, I wonder what repayment rate you have or when you will be finished.

If you still have too much outstanding debt at 60 years old, I would honestly advise against it. Then you have an adult child, a house that is not paid off, and renovations ahead.

Better smaller and finer. Condominium or still rent?
 

tempusfugit

2024-12-29 09:29:03
  • #4
Ah, now I get it: 190 thousand was the equity and not 19 thousand.

The losses definitely include:

    [*]Real estate transfer tax (depending on the federal state)
    [*]Notary fees (purchase price × 1.5–2 %)
    [*]Interest/early repayment penalty (outstanding debt × agreed interest rate × remaining term) divided by 12)
    [*]Return fees (if agreed)

Additionally, the variable loss:

    [*]Market value loss
    [*]Any planning costs. Broker fees should not occur when selling through the municipality

In general, there are also opportunity costs, i.e. lost profits because the tied-up capital (e.g. real estate transfer tax, loan interest) could have been invested elsewhere. There may also be tax consequences, e.g. speculation tax, and the incurred losses (e.g. early repayment penalty, market value loss) usually cannot be claimed for tax purposes if it concerns a private property.
 

11ant

2024-12-29 13:20:45
  • #5
I stay out of financing discussions, so I will not address your position on this matter.

These are three alternatives, of which I do not really see the middle one as given, and I would also put it differently: "Plot with encumbered potential bought, return or possible development?" If you do not sell it immediately, I would at most wait for the upcoming government formation and then reconsider the decision ("yes" or "no," I do not see "later").


The neighbor’s house is already there, which is unfavorable. Ideally, it has a basement and you build none. In all other cases, you have higher costs to ensure the structural safety of the neighbor’s house.
Building with the same profile is manageable, second best is brick on brick, best if it is a prefab house with the same provider, but always with the additional risk that the neighbor’s house is already there.
I hope the plot does not have further pitfalls. How flat is it, what does the quality of the soil say, show the neighbor’s ground floor layout within the plot including heights.
As a significant adjustment option, I still see the width of your house. In terms of construction method, there is certainly no potential; wooden construction costs the same with identical features. If you build, then best with the same architect and at least also the shell construction builder.
 

nordanney

2024-12-29 13:44:48
  • #6
That should settle the topic of house construction. The notary and real estate transfer tax issue should be regulated in the original purchase contract. Have a look. Normally, the municipality charges you for the notary and the real estate transfer tax (which is different from the usual case, since the municipality has no interest in bearing these costs). If, contrary to expectations, nothing is stated in the original contract, then the municipality pays both notary and real estate transfer tax. You can calculate a possible prepayment penalty online. It depends on your interest rate level compared to the bank’s reinvestment options at the repayment date (NOT to be confused with a current loan interest rate. No one cares about that; only reinvestment in specifically defined securities counts). Without further knowledge, your loss could range from €0 up to a low five-digit amount. You are lucky that such a low real estate transfer tax is applied in Bavaria.
 

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