Equity should be 15 to 20% cash (capital).
Value of property is Fr. 1’000’000.
Cost of purchasing – 5% (depending on the canton) Fr. 50’000.
Total value. Fr.1’050’000.-
Equity 20% – Fr. 210’000.-
Credit – Fr.840’000.-
The capital may consist of :
• your savings
• your shares
• the amount available in your 2nd pillar
• funds from your 3rd pillar
• family loans
• land or interest in real estate you own.
• you can also use the guarantee of a third person.
When buying a property, there will be legal and mutation fees. For example in the Canton of Vaud: transfer taxes are 3.3% tax payable on property transactions) + notary fees (1.5% to 1.7%) a total of 5%. Some banks allow you to add these charges to the cost of the object, as follows: value of the 100% purchase cost + 5% = Total 105% equity of the client 20% of this value. Caution: this practice is disappearing. There are fewer and fewer banks using this method. Moreover, credit institutions are not always in agreement with the announced value of the object. If the client really wants to buy, he may be required to add more capital. We define capital as money available to the client from his pension fund (LPP). (see above) It will also be necessary to create mortgage notes to provide the guarantees to the bank for the credit you obtain.
Help in the Canton of Vaud
There is also cantonal support for the purchase of objects up to 1 million. This can
help with some of the equity that you do not own. Contact us for more information.
Transaction costs in the Canton of Geneva.
The registration fees (Casatax) allow substantial savings in the amount of transactions. Up to Fr. 500,000 .-, the 3% tax is abolished. The registration fee on mortgages halved to 0.6825%. For transactions. Fr. 500’000 .- Fr. 1’154’229 .-, a lump sum of Fr. 17’313 .- will be deducted from the tax of 3% of transaction amount. The registration fee on the mortgage is reduced by half, or 0.6825%. For transactions over fr. 1’154’229 .-, there is no change. You pay 3% tax on the transaction. The mortgage registration fee is 1.365%, plus legal fees. These gains are acquired, but you will pay more taxes if you sell before five years and have benefited from this advantage. If we take into account the above fees and
notary fees, namely the Land Registry fee levied on property, the transfer and notary fee, it takes 4% for the total cost to about 3% if you qualify for the Casatax. If it is necessary to create a mortgage note, to give it to the bank to get bank credit, allow 2.5% fee of the amount of the mortgage, even if you get 2% of Casatax. These are also the overall costs.