What are ancillary costs when buying property?

On the financing side, appraisal or valuation fees, file and processing costs, as well as disbursement fees or charges for construction accounts often arise. Anyone who redeems an existing fixed-rate mortgage early must expect a prepayment penalty, which can be significant depending on the remaining term and the interest-rate environment. The conclusion of mandatory insurances — in many cantons the building insurance — also generates premiums that are often newly determined in the first years.

Depending on the canton and situation, further items may be added. These include fees related to building rights, the establishment of condominium ownership, cadastral plans or official surveys. For new builds, costs for the owner's representative, building inspections and development/connection charges are possible. In Switzerland, real estate agent commissions are often paid by the selling party, but they indirectly affect the scope for negotiation.

For buyers it is important to know that these ancillary costs are generally not mortgageable, i.e., they cannot be financed through the mortgage. They must be covered from equity and typically amount to the low single-digit percentage range of the purchase price, depending on the canton and the size of the property. Those who calculate too tightly risk liquidity shortages immediately after acquisition.

In addition to the formal acquisition costs, there are often further project-related expenses: moving, furnishing, minor modifications, initial maintenance measures or one-off investments in energy efficiency. These items are individual but almost always occur in practice and should be included in a realistic overall budget.

Forward-looking planning therefore separates purchase price, ancillary costs and initial investments clearly and provides sufficient reserves. This keeps the financing stable and avoids unpleasant surprises after the purchase.