In Switzerland transaction costs such as notary’s fees, land register fees and so on are considered to be too high. The equivalence principle for such fees and taxes has been infringed, depending on the canton, which is why the price inspector took action.
The following opportunity costs had to be recorded hitherto:
| Transaction Costs – Quantitative | ||
|---|---|---|
|
Type of costs |
Basis of calculation |
Quantitative |
|
Transfer costs |
Purchase price |
6% – 8% |
|
Valuation error |
Purchase price |
approx. 10% |
|
Subtotal transaction costs |
|
approx. 16 – 18% |
|
Equity ratio |
Purchase price |
approx. 30% |
|
Ratio of transaction costs to own funds |
|
> 50% own funds |
The consequences of these high transaction costs, which many investors perceive as prohibitive, are:
- Waiver of necessary adaptations because of the costs
- Disincentive to maximise
- Inefficient allocation
- High level of illiquidity of property investments
