Transaction fees catch investors off-guard

Published on: 10/09/2007

More than two million Brits now own a property abroad but many looking to buy are unaware of the full costs of making a purchase.

But investors cannot afford to be unaware of the risks as property transaction costs vary widely across the continent, warn

While the average transaction cost in the UK is around 5.6 per cent, this can rise to nearly 15 per cent in mainland Europe.

France has some of the highest transaction costs, with around 14.2 per cent of the value of the property being taken in fees.

German costs are also high, at around 11.5 per cent of the value of the property.

“While most OECD [Organisation for Economic Cooperation and Development] countries have transaction costs below ten per cent of the property value, costs for Belgium, Italy, France, Luxembourg and Greece can exceed 15 per cent,” warned Justin Figgins, head of RightmoveOverseas.

However, some of the lowest transaction costs can be found in Scandinavia where the average transaction fee is just 5.2 per cent of the property value.

“Essential information will determine final expenditure and possible restrictions on their ownership can be neglected, leading to complications, stress and disappointment,” continued Mr Figgins.

“In addition to awareness of transaction costs independent legal advice should be sought and property laws should be thoroughly researched.”

RightmoveOverseas advises buyers to establish their investment goals, personal needs and level of risk before making a purchase.

Finally, the organisation warns while less-developed markets may increase returns on an investment they often come at a higher risk.End of story


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