Global Property - Buying costs of international prime property

Knight Frank’s Buying Costs report looks at the purchase costs and annual charges for a non-resident buyer purchasing a new-build property above US$3m in 15 global cities.

Key findings:

• Hong Kong is the most expensive location to buy a home: non-residents can expect to pay 25% on top of the purchase price when buying a $3m home
• Singapore buyers pay purchase costs of 19.3%: the city-state’s 18% rate of stamp duty for non-residents is the highest of all world cities analysed
• London and Sydney are 3rd and 4th most expensive places respectively with buying costs making 7.9% and 7.2% of the total purchase price in each city respectively
• London property remains popular with international investors who bought 73% of central London’s new-build homes in 2012
• Purchasing a $3m property in Paris is relatively low-cost
• In Monaco home owners  face no annual charges and benefit from the country’s benign tax environment
• Government intervention is the largest factor in the implementation of purchase costs and fees

Knight Frank data showed that in 2012, the total web searches for prime homes on Knight Frank’s Global website rose by 36% year on year.

London property remains popular with international investors who are attracted by the UK’s political stability, good communications and the city’s top schools. In New York there is no stamp duty, but the purchase of a $3m new build condominium incurs a 1% mansion tax.

While Hong Kong tops the purchase cost table, the opposite is true when it comes to the annual cost of buying a property.  
 
Liam Bailey, Global Head of Residential Research, comments:

“While the financial crisis contributed to growing cross-border demand for property, it has also led to a more febrile tax and regulatory environment.”
 
In terms of property performance, Miami, Dubai and Monaco lead the way in annual property price increase by 21.1%, 18.3% and 12.2% respectively.  All three locations have purchase costs of below 5%. 

James Price, Head of Knight Frank International Development comments:

“As interest in cross-border property investment rises as wealthy individuals look for safe havens to store their wealth, it is important to be aware of the different taxes and charges faced when buying a residential property in different cities around the world.

The analysis reveals huge differences in charges and fees associated with residential purchases in each market. Costs include stamp duty, legal costs, transfer fees, agency fees, council tax, property taxes and service charges, where applicable. Additionally, it examines the impact that government intervention has had on a number of property markets around the world over the last year.”

Courtesy: Knight Frank

For further information, please contact:

Bronya Heaver, International PR Manager [email protected]  +44 20 7816 1412

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 242 offices, in 43 countries, across six continents. More than 7,067 professionals handle in excess of US$817 billion (£498 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.