Why building a house almost always costs more than calculated

@lower real estate transfer tax:

Our land purchase price is €31,868.10 and accordingly we have assumed 6% of this as real estate transfer tax in the cost plan --> €1,912
We are building in (Northern) Hesse.

The land price of €31,868.10 consists according to the notary contract of:
a) €3,917.32 = land and soil
b) €7,324.24 = allocable incidental costs
c) €12,830.18 = development contribution for already finished street (building gap)
d) €5,614.40 = one-time wastewater contribution (sewer & treatment plant)
d) €2,181.96 = water contribution for public water supply

In the tax assessment, only a+b (€3,917 + €7,324) as well as a "flat rate cost for house connections of €2,900" were taken as the basis for the 6%.
In total, a basis of €14,141, corresponding to a real estate transfer tax of €848 instead of the planned €1,912.

In some documents from the seller (municipality) we were informed before the purchase that
"the water, wastewater and development contributions contained in the purchase price in accordance with the statute are not subject to real estate transfer tax according to the decree of the Oberfinanzdirektion of 17.11.1994, since in this respect no consideration with already incurred contractual obligations exists."

In response to my inquiry at the municipality I then received the following:
Here you are of course right. Since 2010 or 2011 (please do not take this as fixed) real estate transfer tax is due on the full purchase price. That you were told otherwise was a mistake on our part and is related to the fact that we have overwritten an "older letter". We ask you to excuse this.
Basically, you cannot rely on this before the tax office, since this is a state authority independent of the city.
In general, there is constant "movement" in this matter between the "Oberfinanzdirektion" and the local tax offices. Our current knowledge, however, is that real estate transfer tax is due on the full purchase price.

Possibly this matter has therefore moved again and that is why we were not given the full amount as the taxable basis.

Correspondence with municipality March 2016
Notary contract signed April 2016
Tax assessment June 2016

Of course, I hope that at a later date no second bill will come if they change their mind....

Good collection.

I always have to think of all this when I read that someone prefers to build themselves because all existing buildings are too expensive...

Good day Yvonne,

I hope potential builders/renovators also read your helpful summary! I would like to add one important point from my job perspective:

1A. Overconfidence

I often read here: "that can't be that hard" - "I can get it cheaper" - "I'll do it myself." There are periods when my inbox overflows because it turns out that it is not so *simple*. But since the penny still has not fully dropped that professional help is advisable, people think the moderators will fix it - they will surely answer/help me. To my great annoyance, I even do that; as far as I can help professionally and have time.

It does not matter whether a new build or the purchase/renovation of an existing building is planned: the mechanisms are mostly the same: it *must* be cheap, almost compulsively; meanwhile, Ruskin’s wise observation should always be kept in mind! If the buyer has also learned a technical profession, it gets even more complicated; many members of these professions are simply resistant to learning. An experienced puppeteer knows his limits better!

Building a house/renovating an existing building costs – no matter where in the republic – a lot of money for the respective buyer; it is often the biggest investment of their life. All the more fatal it is when important securities are left out at the outset. A layperson – even with a technical profession – should not rely on luck that everything will turn out fine. This usually happens if reputable providers are chosen as temporary construction partners. The crux behind the frightening construction stories, however, is less a reputable contractual partner, but mostly one’s own overconfidence!

Those who want to securely invest their money in real estate should:

for new builds:

[*]have the BB and work contract including attachments checked before signing
[*]purchase construction supervision; the ordinary 5-phase inspection by TÜV® is generally sufficient

for purchasing an existing property:

[*]_inspect_ before purchase with an architect or expert
[*]_renovate only_ with an architect or expert

Those who follow this save a lot of money, time, and nerves...!

Rhine greetings

Good day Yvonne,

when purchasing an existing property:

[*]inspect with an architect or expert before purchase
[*]renovate only with an architect or expert

Those who follow this save a lot of money, time, and nerves ...!


Rhenish greetings

If renovating, then only with someone who also has experience in the field and can provide references.

If renovation, then only with someone who also has experience in the field and can show references.

Of course, I assume that!
Rhenish greetings

I hope your helpful list will also be read by potential builders/renovators! I would like to add one important point from my job perspective:

I have pinned this list in the forum, so it won’t "disappear."

I gladly ask for additions to the list. I only have experience with construction via general contractors, I can imagine other house building with architects or developers, but only superficially.
It’s not about small amounts, but significant ones that can endanger financing or the house construction.

Renovation is an even more special topic.

By the way, I have just expanded point 1, so I slightly changed my post — it was very important for me to mention it, but I forgot yesterday.