Home purchases in Europe by an out-of-country buyer are subject to the highest transaction costs in Russia, according to a report this week by Global Property Guide, an international real estate research firm.
Transaction costs are about 25 percent of the property value in Russia, 24.9 percent in Bulgaria, 19.7 percent in Monaco, 17.9 percent in Belgium, 17 percent in Italy, and 16.3 percent in France, the company reported.
The report is based on the total cost of buying and selling a property, including taxes and fees, for the purchase of a property by a European buyer who is not a resident in the country where the property is purchased.
Also, the sample is based on the purchase of a condo in a major city that is worth about 250,000 Euros, or about $339,500 in U.S. dollars based on the current exchange rate, and served as the seller’s principal residence for the past 10 years.
“Residential investments in Europe incur punitively high roundtrip transaction costs in many countries, exceeding 15 percent in several cases,” according to the report.
The United States was not listed in the report, which focuses on Europe. Real estate transaction costs were listed at 5 percent in the United Kingdom, which is toward the bottom of the scale. New or renovated properties can carry additional taxes, according to Global Property Guide.
Transaction costs can total 33.75 percent of the property value for new properties in Monaco, while those costs can total about 31 percent in France, according to the report. “Real estate agents’ fees are highest in Scandinavian countries … this is because the agent guides buyers throughout the property registration process.”
Some countries require the assistance of lawyers in real estate transactions.
The transaction-cost research is based on input from local real estate agents, government agencies and the World Bank Doing Business Web site, according to the research firm.