4 ms·

> a minimum 5% deposit + 3-5% stamp duty Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They s

by elric 6y ago

> a minimum 5% deposit + 3-5% stamp duty Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They seemed really low to me. To put it into perspective, you need a 10-20% deposit in Belgium (depending on various factors) and there's a 6% tax for an old house (10% up until very recently) or 21% for a new house. It's basically impossible to buy a house if you're young or single or come from a poor family. I feel your pain.

pc86 6y ago
Is that tax added into the mortgage as a lump sum (meaning you pay interest on it for the life of the loan) or is it added to the payment each month?
- dbetteridge 6y ago
  Not sure how Belgiums works, but Australias stamp duty is a lump sum you pay alongside your deposit when buying the property. Correction: I double checked and it looks like it can be added to your mortgage, which isn't as bad up front.
  - pc86 6y ago
    That's rough, although paying it once and being done with it is certainly preferable (long term, if you have the funds) to wrapping it into the mortgage and paying 3-4x over the life of the loan.
    - rileymat2 6y ago
      Functionally it is wrapped into the loan because without that, you would have had more down payment.
  - gassit 6y ago
    That is not quite correct. Stamp duty is payable at the time of settlement but it is normally added as a lump sum to the mortgage.
    - dbetteridge 6y ago
      I've added an addendum! I must have misremembered that bit of info. Thanks!
- elric 6y ago
  Lump sum in Belgium. You might be able to get away with tacking it on to the mortgage, but only if you have additional collateral (another home, rich parents, whatever). Or maybe if it's a really cheap house.
dbetteridge 6y ago
Yeah sorry poor wording on my part, as a percentage it is low but as a percentage of income it is pretty high. A 20% deposit is minimum to not have to pay a 'Mortgage insurance' which gets added to your mortgage to cover the bank if you default. Belgium sounds like an even more painful situation, sucks for those of us who would just like to have a stable place to live and be allowed to add some personal character to (not allowed in most rentals ive lived in)
- elric 6y ago
  Oh yeah, I forgot about the insurance, which is officially "not required", but no bank will give you a mortgage without one. Depending on how you decide to pay for it (installments vs lump sum), that can end up being another significant expense.
tuukkah 6y ago
In comparison, in Finland the stamp duty is 0% when you buy your first home while you are under 40.
- jorvi 6y ago
  > while you are under 40 This seems such a weird condition to add. Someone who doesn't earn much but saves up over 22 years for a house has to pay stamp duty on his first house, but someone privileged who can buy a house when 30 years old doesn't?
  - luch 6y ago
    I agree, it's better to differentiate based on revenues rather than just age. In my country, if you're poor and if it's the first house you buy, you can ask a 0% tax loan from the government and use it to pay your stamp duty with it.
  - tuukkah 6y ago
    I fully agree. I guess the intention may have been to make people hurry up buying or building while young. One of the major political parties here (Centre Party, the agrarian-liberal party) wants people to live outside of the cities. Finnish cities are so small that it's easy to commute from a place with plenty of cheap land and thus it's possible for most people to buy or build a house there if they want to.
    - piva00 6y ago
      Isn't this the same basic principle that drove American suburbia? Expand the outskirts with building houses on bigger plots of land and empty the city centers. It just seemed to have killed city centers in the US. Granted that Finland has a very different culture (disclaimer: I live in Sweden) and we aren't in the 50s anymore to invest heavily on a car-centric society but incentivising people to move away from city centres can have unpredictable consequences 20-50 years down the line.
- himlion 6y ago
  The Netherlands has just implemented something like this as well, but so far nothing has changed for the better for starters.
rwmj 6y ago
What's the reason for the strange difference between the tax on old and new houses?
- mrslave 6y ago
  Developers lobbying politicians. And because jobs! Is win-win[-everybody-else-loses].
  - KptMarchewa 6y ago
    Shouldn't the new houses have lower tax then? Why would developers lobby for lower taxes on old houses?
    - mrslave 6y ago
      > Shouldn't the new houses have lower tax then? Why would developers lobby for lower taxes on old houses? Sorry if my first comment was a bit coy and unclear. Both ancestor comments are about Australia & Belgium. Google tells me that in Australia new properties are incentivized over old: >Grant: First home buyers can access a $10,000 grant when purchasing or constructing a new home, regardless of how much the property is worth. Stamp duty concessions: The territory government provides an up to $18,601 Territory Home Owner Discount (THOD) on stamp duty costs for first-time buyers. My Aussie friends tell me this changes frequently, that it also differs by state, but some sort of incentive to prefer new properties have been policy for a long time. GP says that Belgium penalizes existing houses: >a 6% tax for an old house (10% up until very recently) So there aren't lower taxes on older properties in either country. You get a discount on the taxes only when you purchase a new property, which is an incentive in alignment with the interests of property developers.
- CaptArmchair 6y ago
  Belgium has complex housing and zoning problems caused by 50 years of inconsistent policies and regulations. One (of many) big issue(s) is that the past has seen unchecked claiming of land for new projects leading to an acute shortage of land, while lots of existing houses and buildings are entirely outdated. We are talking about houses which are 60 or 70 years old typically located in densely pouplated urban agglomerations and haven't seen little to no remodeling whatsoever during that time. These are hardly isolated, difficult to heat, are entirely outdated in terms of utilities and plumbing and so on. The idea behind the difference is to incentivize people to buy and renovate older, existing houses and curbing the further occupation / use of free & open space with new construction and urban sprawl. It should be noted: Belgium is also a country with an incredibly complex fiscal system. There are taxes as well as tax breaks on every aspect of life. Belgium is a complex federal nation with many levels of government. To put that in perspective: it's a country with 6 different governments. All of which turn politics and policy making, unironically, into 5D chess. The fiscal system tends to be the arena where everything comes together, generally as a compromise which is often more founded on pragmatism then necessity. Historically, home ownership has been, and still is, massively incentivized in Belgium. But just like everywhere else, soaring housing prices and an ageing population are causing issues for younger generations who can't buy property without financial help from their parents. And so, young people find themselves in a bind. They can't just buy any property, market dynamics and public policies push them towards buying outdated property only to face long, drawn out and expensive renovation projects just to bring everything up to date with modern, strict construction codes.

by elric 6y ago

pc86 6y ago

Is that tax added into the mortgage as a lump sum (meaning you pay interest on it for the life of the loan) or is it added to the payment each month?

dbetteridge 6y ago
Not sure how Belgiums works, but Australias stamp duty is a lump sum you pay alongside your deposit when buying the property. Correction: I double checked and it looks like it can be added to your mortgage, which isn't as bad up front.
- pc86 6y ago
  That's rough, although paying it once and being done with it is certainly preferable (long term, if you have the funds) to wrapping it into the mortgage and paying 3-4x over the life of the loan.
  - rileymat2 6y ago
    Functionally it is wrapped into the loan because without that, you would have had more down payment.
- gassit 6y ago
  That is not quite correct. Stamp duty is payable at the time of settlement but it is normally added as a lump sum to the mortgage.
  - dbetteridge 6y ago
    I've added an addendum! I must have misremembered that bit of info. Thanks!
elric 6y ago
Lump sum in Belgium. You might be able to get away with tacking it on to the mortgage, but only if you have additional collateral (another home, rich parents, whatever). Or maybe if it's a really cheap house.

dbetteridge 6y ago

Yeah sorry poor wording on my part, as a percentage it is low but as a percentage of income it is pretty high. A 20% deposit is minimum to not have to pay a 'Mortgage insurance' which gets added to your mortgage to cover the bank if you default. Belgium sounds like an even more painful situation, sucks for those of us who would just like to have a stable place to live and be allowed to add some personal character to (not allowed in most rentals ive lived in)

elric 6y ago
Oh yeah, I forgot about the insurance, which is officially "not required", but no bank will give you a mortgage without one. Depending on how you decide to pay for it (installments vs lump sum), that can end up being another significant expense.

tuukkah 6y ago

In comparison, in Finland the stamp duty is 0% when you buy your first home while you are under 40.

jorvi 6y ago
> while you are under 40 This seems such a weird condition to add. Someone who doesn't earn much but saves up over 22 years for a house has to pay stamp duty on his first house, but someone privileged who can buy a house when 30 years old doesn't?
- luch 6y ago
  I agree, it's better to differentiate based on revenues rather than just age. In my country, if you're poor and if it's the first house you buy, you can ask a 0% tax loan from the government and use it to pay your stamp duty with it.
- tuukkah 6y ago
  I fully agree. I guess the intention may have been to make people hurry up buying or building while young. One of the major political parties here (Centre Party, the agrarian-liberal party) wants people to live outside of the cities. Finnish cities are so small that it's easy to commute from a place with plenty of cheap land and thus it's possible for most people to buy or build a house there if they want to.
  - piva00 6y ago
    Isn't this the same basic principle that drove American suburbia? Expand the outskirts with building houses on bigger plots of land and empty the city centers. It just seemed to have killed city centers in the US. Granted that Finland has a very different culture (disclaimer: I live in Sweden) and we aren't in the 50s anymore to invest heavily on a car-centric society but incentivising people to move away from city centres can have unpredictable consequences 20-50 years down the line.
himlion 6y ago
The Netherlands has just implemented something like this as well, but so far nothing has changed for the better for starters.

rwmj 6y ago

What's the reason for the strange difference between the tax on old and new houses?

mrslave 6y ago
Developers lobbying politicians. And because jobs! Is win-win[-everybody-else-loses].
- KptMarchewa 6y ago
  Shouldn't the new houses have lower tax then? Why would developers lobby for lower taxes on old houses?
  - mrslave 6y ago
    > Shouldn't the new houses have lower tax then? Why would developers lobby for lower taxes on old houses? Sorry if my first comment was a bit coy and unclear. Both ancestor comments are about Australia & Belgium. Google tells me that in Australia new properties are incentivized over old: >Grant: First home buyers can access a $10,000 grant when purchasing or constructing a new home, regardless of how much the property is worth. Stamp duty concessions: The territory government provides an up to $18,601 Territory Home Owner Discount (THOD) on stamp duty costs for first-time buyers. My Aussie friends tell me this changes frequently, that it also differs by state, but some sort of incentive to prefer new properties have been policy for a long time. GP says that Belgium penalizes existing houses: >a 6% tax for an old house (10% up until very recently) So there aren't lower taxes on older properties in either country. You get a discount on the taxes only when you purchase a new property, which is an incentive in alignment with the interests of property developers.
CaptArmchair 6y ago
Belgium has complex housing and zoning problems caused by 50 years of inconsistent policies and regulations. One (of many) big issue(s) is that the past has seen unchecked claiming of land for new projects leading to an acute shortage of land, while lots of existing houses and buildings are entirely outdated. We are talking about houses which are 60 or 70 years old typically located in densely pouplated urban agglomerations and haven't seen little to no remodeling whatsoever during that time. These are hardly isolated, difficult to heat, are entirely outdated in terms of utilities and plumbing and so on. The idea behind the difference is to incentivize people to buy and renovate older, existing houses and curbing the further occupation / use of free & open space with new construction and urban sprawl. It should be noted: Belgium is also a country with an incredibly complex fiscal system. There are taxes as well as tax breaks on every aspect of life. Belgium is a complex federal nation with many levels of government. To put that in perspective: it's a country with 6 different governments. All of which turn politics and policy making, unironically, into 5D chess. The fiscal system tends to be the arena where everything comes together, generally as a compromise which is often more founded on pragmatism then necessity. Historically, home ownership has been, and still is, massively incentivized in Belgium. But just like everywhere else, soaring housing prices and an ageing population are causing issues for younger generations who can't buy property without financial help from their parents. And so, young people find themselves in a bind. They can't just buy any property, market dynamics and public policies push them towards buying outdated property only to face long, drawn out and expensive renovation projects just to bring everything up to date with modern, strict construction codes.