Purchase land and house from the developer in two contracts

Hello everyone,

we came across a free plot in a residential development area with a developer who is developing the entire area and building houses from his portfolio.
We have had intensive discussions about prices and options. Now it is about the contracts. It is clear that we are buying the plot from the developer and must build with him.
However, the developer only wants to handle the land purchase contract through the notary. The construction contract according to the Building Code is then separate. The advantage is that we save a little on notary fees. The disadvantage could be deviations from the otherwise applicable Broker and Developer Ordinance. I haven't found any disadvantage at first glance. The payment plan largely corresponds to the Broker and Developer Ordinance.

Am I overlooking something? What disadvantage is there for us or what does the developer benefit from?

Thanks and regards
Christian

Google "verdecktes Bauherrenmodell", maybe the developer's intention lies in that?

This is the "hidden client model," the notaries view this very critically. Keywords:
- Building permit/client
- Insolvency of the contractor
- Warranty
- Tax (sales tax vs. real estate transfer tax)

The payment plan largely complies with the Broker and Property Developer Ordinance.

Largely?

I just want to understand whether the notaries are concerned about their fees, or whether there are actually disadvantages.

, thanks for the bullet points. I tried to answer that for myself.

[*]It is defined in the contract that the BT obtains the building permit. Once this is available, the construction period starts.
[*]The BT has the house rights and authority to issue instructions during the construction period. Unfortunately, this excludes own labor. Here we still need to check whether we want to do anything ourselves besides floor and painting work (KNX, network, ...)
[*]Insolvency is indeed an issue. Under the real estate agent and developer ordinance, the BT must provide securities for the payments made in advance by the customer. I need to find out what securities we can demand from the BT. We always pay after completing a certain phase and initially only advance 2% upon signing.
[*]I definitely have to pay the real estate transfer tax on the land and the house. The tax office is consistent about this and allows no leeway. I don’t understand what the value-added tax is about. Don’t I have to pay the 19% in every case?

The differences in the payment schedule are as follows:

Real estate agent and developer ordinance vs. BT contract

[*]30% for the plot - separately 100% at the beginning
[*]40% after shell construction completion - 2% upon signing, 20% after foundation slab, 17% after outer walls ground floor, 17% after shell = 56%
[*]8% for the construction of roof surfaces and gutters - 17%
[*]3% for the rough installation of heating systems
[*]3% for the rough installation of sanitary systems - 6% with heating
[*]3% for the rough installation of electrical systems - 4%
[*]10% for window installation - 10%
[*]6% for interior plaster
[*]3% for screed - 5%
[*]4% for tiling in the sanitary area
[*]12% after readiness for occupancy and simultaneously against transfer of possession - 2%
[*]3% for facade work
[*]5% after full completion

In total, therefore, higher costs at the beginning and only 10 payment installments. But always after fulfillment and not in advance.

Best regards Christian

With the building permit, you have the problem that it is no longer the BT who is responsible, but you. That means if the building permit for the house is not granted, YOU have the problem. Although you own the land, you are not allowed to build the agreed house on it.

BT obtains the building permit

Hmm, practically you will probably(?) act as the landowner but as the builder. The "BT" prepares the necessary documents, which you then submit. As with the general contractor/contractor with guarantee. The question is what happens if the construction is not approved...

Also, you will probably(?) no longer have a fixed price, because any incidental costs of construction might partly be passed on to you as a lump sum. Here it depends on the entire contract text.

I don’t understand what the sales tax is about. Don’t I have to pay 19% in any case?

The principle is that the developer contract is subject to real estate transfer tax but exempt from sales tax. That means you pay gross the same as net when buying from the developer. Practically, most developers do not perform their own services (to a significant extent) but purchase them externally. The purchased service must be paid by the developer with sales tax and they are allowed to pass this tax on to you. However, you do not see it on the invoice. So you do not get the luxury bathtub at net price during the sample selection process, but you always also have sales tax -- invisibly -- included! And if the developer performs any own services somewhere (planning services), he will rather assign the saved sales tax to his own margin than pass it on to you. At least in the current market environment.

In the concealed builder model, the sales tax is explicitly shown on the house invoice (as with any craftsman invoice). Real estate transfer tax is then due on that, including on the sales tax, but you already know that.

You can calculate and compare the two payment plans yourself with the euro amounts.

But the question is: Do it or not? Or what does the BT say if you insist on one contract?

Edit: I am too slow, but I do write too much anyway :P