For international buyers, the selling price of a house is just one aspect of the financial equation. Taxes, stamp duties, and annual fees will significantly increase the cost of a home, turning it from an investment to a money pit. Qatar For Sale - Property Hunter
According to data released today by Knight Frank, taxes and fees will add up to 25% to the price of a $3 million new-build home in Hong Kong, where the government is attempting to slow rapidly growing prices. The additional expense is largely due to non-citizens' stamp duty and property tax.
While Hong Kong has the most fees, it is far from alone. Singapore came in second on Knight Frank's most expensive list, with consumers paying an additional 19.3 trillion in purchase prices, including the world's highest stamp duty rate of 18 percent.
"While the financial crisis boosted cross-border property demand, it also created a more volatile tax and regulatory climate," Liam Bailey, global head of residential research, said. The extra expense of purchasing a $3 million home in London came in third with a 7.9% premium. However, according to Knight Frank, the payments have had no effect on foreign interest. According to the consultancy, foreign buyers accounted for 73 percent of new-build sales in prime central London in 2012.
According to the company, Sydney was fourth on the list, with a foreign buyer's purchasing expense of 7.2 percent of the overall purchase price, followed by the Bahamas at 6.5 percent.
The study, however, did not end with the purchase fees. It also looked at annual payments such as inheritance taxes, council or local taxes, and property taxes that a buyer would have to pay (excluding ground rents and community service charges).
In terms of buying prices, New York was ranked eighth in the nation, but first in annual fees.
Despite its high purchasing price, Hong Kong has a low annual cost because buyers are not expected to pay any ongoing house, land, or council taxes, according to the company. Monaco, which has long been a favorite among the rich, has a low tax climate and no annual property fees. A $3 million new build home in Paris is also described as a "relatively low cost" option.
"Although there are registration and notary fees to pay [in Paris], buying a luxury home in the city is less expensive than in other typical locations," Knight Frank concludes.
Home Prices in London Have Reached All-Time Highs.
According to new data released today by Nationwide, the average price of a home in London is now £318,214 ($485,180), up 5% from the peak in 2007.
According to Nationwide, low credit, an improving economy, and the continued influx of foreign buyers have all aided in pushing up prices in the capital.
The prices in London are significantly higher than those in the rest of the United Kingdom, where the total average price has risen to £168,941 from £162,262 in December. Prices in the United Kingdom are growing at their highest pace since 2010.
However, prices in the UK market as a whole are still 9% below 2007 levels, whereas London prices are rising to new heights. London's rates are more than twice as high as the rest of the UK when compared to the national average.
Despite the fact that Nationwide is one of the market's more conservative benchmarks, the data is consistent with recent studies from Halifax and the Royal Institute of Chartered Surveyors.
The increased availability of mortgages is undoubtedly a factor. According to analysts, new government schemes such as the Funding for Lending Scheme (FLS) and the Aid to Buy scheme helped raise investor confidence. May was the best month for lending since 2008, according to the Council of Mortgage Lenders.
Jonathan Hopper, managing director of property search consultants Garrington, told the Guardian newspaper, "The London property market is an exceptional microcosm." "It has essentially broken away from the rest of the United Kingdom and is living in its own space."