Closing costs in Germany are quite high... about 12%.
- 3.57% RE commission
- 2.00% notary
- 6% for the land transfer tax
And the seller also pays 3.57% of the RE commission. So over 6% at the end of the day :)
- 3.57% RE commission
- 2.00% notary
- 6% for the land transfer tax
And the seller also pays 3.57% of the RE commission. So over 6% at the end of the day :)
Then approximately £1000 in legal fees when buying or selling.
Then the big one which is stamp duty (a government tax) which is between 0 and 12% of the purchase price. Typically the lower end of that scale though. (https://www.gov.uk/stamp-duty-land-tax/residential-property-...)
Also it's possible to cut out the estate agent if you really want to save money. There are a bunch of websites that for a minimal flat fee will let you DIY it, but be prepared to make your own for sale sign, photograph your own property, and show prospective buyers around.
Legal fees are more like 2k+ these days (source: buying a house)
In Scotland sellers are legally required to provide a survey to potential buyer, known as the Home Report, which covers all the basics. While it doesn't go indepth on specific issues it does normally highlight them in the first place so you're far less likely to uncover surprise issues after buying. And if it does find potentially major issues the seller will often pay for a more indepth survey or to just get it fixed themselves as otherwise no one will consider the property. For example the home report for the first property I bought found damp which put most people off so the seller paid for a damp survey and quote to fix which they added to the HR. Even then it put a lot of people off and I got it £3k under valuation despite the quote to fix the damp being only £1.8k.
Also I'm not sure if it's the same down in England but "estate agents" in Scotland are all solicitors and thus regulated. Plus when you sell it's one fee to one company for everything and there's no faff about info going between agents and solicitors.
Is that including all legal fees?
Even still that seems like a much bigger rip off than a buyer's agent in the US.
No idea why it is always everybody else who should work for free.
In all seriousness, notaries in Germany are all full lawyers and practices are highly sought after, as the numbers of lisvensed notaries is limited.
You have to pass an exam, same as a public servant, and the number of positions is limited. But you don't have a regular salary like any other public servant: you set up a private office and get the money directly from your clients.
The price for the actions is regulated but it's high, and the number of licenses is limited, so generally they have hefty salaries, specially compared to the rest of the public servants and the mean of the population.
Their salary can be very variable based on location (as you get the money directly from your clients), but it's said to typically be from 100K to 200K€
It looks like they need a law degree, too, so I'm sure they offer legal services other than property transactions?
By contrast, civil law notaries are generally full-on lawyers who are trained and intended to perform several legal tasks.
That would make more sense for the 2% but it's not related to the notary in the US; notary literally just does "I checked the id of the person signing and it matches" which is a service that can be had for free at your bank or at most $50 if you have to pay someone, 2% of a house for that service obviously wouldn't make sense.
By the way, excerpts of the registry for the real estate in question are part of the sales contract (just remembered).
The case of title insurance is only where something weirder happens with wills, contracts, or liens. If there was an owner that died in 2016 and his will said "split my house to all surviving children". And at the time one child shows up who believes they are the sole surviving descendant and claims the house and sells it in 2017, then 2018 a second heir finds out their estranged parent died and shows up to say "actually half of this house was mine, that guy didn't legally have the right to sell it even without any fraud occuring".
Title insurance ends up 'fixing' this problem so that the buyer and actual-should-have-been-owner can both be made whole (and they go after the seller for the amount they didn't actually own, but sometimes that won't be possible to recover). If you don't have title insurance you as the buyer just take the liability that you might not actually own the house (or part of the house) if the record was mistaken and needs to be corrected.
In Germany would this just be a case where if the will is executed and you find out too late the inheritor would be screwed with no way to get what you owned instead?
In Spain the notary "just" works through the signature of the contract:
- Checks the identities of the parties and their legal status
- Makes "sure" both parties understand the contract
- Verifies that the property can be sold (checks for legal issues in the national registry)
- Serves as a legal witness to the signature
- Sends a copy of the contract to the national registry (but AFAIK, doesn't follow up)
Then you have to contact a registrar to make all the legal papers to make all the legal papers in the national registry. That's araound 300-400 €, I think.
It's an expensive, but essential step in Germany.
Because there isn't a default real estate purchase contract, so you need to trust that you'll receive the property. It's like paying a lawyer to mediate an expensive purchase, and they carry some legal risks with it.
They also do the bureaucracy with the government to add your name to the Grundbuch (it's a book from the government about who owns what % of a property), and also clean up the previous debts that it had (they are written there).
They could open this to competition and let lawers do the job as well, but that would go down badly with the notaries who make a fortune.
The actual in-and-out costs are significantly higher than just the agents, though the agents are the most expensive and of questionable value.
Taxed based on value: https://apps.legislature.ky.gov/Law/Constitution/Constitutio...
Value based on fair market value: https://apps.legislature.ky.gov/Law/Constitution/Constitutio...
In Germany, the net average tax rate on a worker is 37.4%, in America it is 24.8%. That's a dramatic difference in taxation!
I’ve never quite understood why people think the US is a low tax country.
Your reply is "what about the 1%ers who live in two of the most expensive cities in the world? What about THEM?"
What about the 99.9% of Americans who don't make six figures in one of those two cities?
I've never quite understood why people think America is a few million people living in 2 cities. You know there's 320,000,000 more us of right?
At this point making “mid six figures” hardly makes you rich. You don’t have to be the top 1% to see a tax rate higher than the one you stated.
Point is arguing that Americans are low taxed when the highest paying jobs are concentrated in high tax states and cost of living is much higher ignores reality for many Americans who pay as much or more than Europeans.
The median household income in California is $80k and of the 40 million in California, very few work in tech.
California actually has extremely progressive tax laws and extremely low property taxes, so while you're right that the actually wealthy folks do pay a European-level of taxation, the working class actually pays a dramatically tax rate than their counterparts in Europe.
Anyone with any knowledge of California knows all of this, so when you made such odd points that seemed to challenge it, I tried to help you by assuming you meant SF.
Point is: the vast majority of Americans pay vastly less taxes than Europeans and no weird focuses on outliers is going to change reality.
Funny side note: I still am the only person who posted OECD apples to apples data, which you have rejected un-critically with no sourcing and nothing but hand waves about your feelings. Hmmm.
That's a gross oversimplification and thus very misleading. While your marginal tax rate on taxable income (not gross income) might be close to 50%, if you are married filing joint, a homeowner, and have children, you are not paying anywhere near 50% effective tax rate[0] on your total income, due to deductions and exemptions, credits, tax-deferred retirement contributions, tax-free health insurance, and progressive tax brackets.
[0] "effective tax rate" does not have a universally agreed single definition, but the statement holds for most reasonable definitions.
Obviously you're right that marginal != effective, but Americans really do pay a LOT in taxes, when you add it up, for a relatively middling level of services (e.g. no public healthcare, no subsidized daycares, marginal-quality public schools)
https://smartasset.com/taxes/income-taxes https://taxfoundation.org/data/all/state/tax-burden-by-state...
From a quick Google: The US federal income tax rate for low earners is something like 12%. In the UK it's 20%. In Sweden it looks like the municipal tax is 32%. The few other countries I looked up had complicated tax systems that made it hard to compare, not that the above examples (and the US) aren't missing their deductions.
To be fair, we (US) outsource much of our taxation to the private sector, so that basics like healthcare fees/taxes are routed through private companies. If it comes out of your check before you get it, and it's not going into your 401(k), it might as well be a tax.