Mathematics can be a difficult exercise for property buyers. It shows an example from Copenhagen’s Northwest district, which includes a lot of apartments with hjemfaldspligt.
Hjemfaldspligten implies, that the apartment after typically 32-35 years must be submitted to the city of Copenhagen against a token payment of a few hundred dollars. Buyers can also choose to buy out of the freedom of hjemfaldspligten, which for a one bedroom apartment typically runs up in the 800.000-900.000 kr.
Facts about hjemfaldspligt
Hjemfaldspligt on a property means that the ownership of the property after a certain number of years automatically passes to the holder of the right, which is typically the municipality. The municipality’s right is written in as an easement in the land register. ”The payment” in order to assign the residence to the municipality is symbolic.
Both the Copenhagen and Aarhus Municipalities operate with hjemfaldspligt. None of the two municipalities sell further plots of land with hjemfaldspligt.
Approx. The 1,500 properties in 2017, of which an estimated approximately 900 private home ownership. The total value of the municipality’s hjemfaldspligt amounted to 4 billion dkk.
Approx. 325 properties, including 110 residential properties. According to the Aarhus Stiftstidende is hjemfaldspligten applicable for ca. The 1,500 condos.
the city of Copenhagen has fixed rules for the calculation of what is a cancellation or a postponement of the hjemfaldspligten costs for the home owner. In both cases, used the so-called tilbagediskonteringsmetode. In Aarhus Municipality is the rules and the payment of a cancellation of hjemfaldspligten not put in quite so fixed framework, as in Copenhagen.
Under normal circumstances, would you rather have 1,000 kr. in the hand here and now than the same amount in ten years, since inflation probably will have ‘eaten’ a part of the amount.
Probably has hjemfaldspligten its ideological roots in the georgismen (Henry George), which is an economic theory, which is that the state must involve increases in value of land and real estate.
Buying a house
In this context, the rational and cost-conscious boligkøber require a discount on the price, which corresponds to the price for a fee of hjemfaldspligten. But it happens, apparently not.
In a sample that Bolius has made, of three apartments with hjemfaldspligt and three comparable apartments without hjemfaldspligt are apartments with hjemfaldspligt offered at prices, that does not include the entire cost of a fee of the apartment.
the Real buyers, therefore, to pay excessive prices for their apartments, as in the three examples offered at prices that are 19 to 42 percent over the price of a comparable apartment without hjemfaldspligt.
All the apartments are located in the sought-after ‘Pip-neighbourhood’ in the zip code 2400 NV. The neighborhood has its popular name after the roads in the area, which counts names such as Nattergalevej, Mågevej and Uglevej.
In the most extreme cases, there is a surcharge of 42 percent, which corresponds to the 778.000. kr. The apartment is offered for 1.695.00 kr. in addition to the buyer’s share of a common debt, which represents 124.000 kr.
After a minor correction for the location of the apartment in the property ends, the cash price on the 1.799.000 kr. For comparison, there are offered a comparable apartment in the naboopgangen at a price of 1.842.000 kr. incl. share of the common debt.
In other words, receiving a buyer of the apartment with hjemfaldspligt only a discount of 43,000 kr., which stands in glaring contrast to the fact that a fee of hjemfaldspligten costs approx. 821.000 kr.
If the purchaser of the apartment with hjemfaldspligt have to pay for a fee and thus be just as well made as the holder of the nabolejligheden without hjemfaldspligt falling price of approx. 2.620.000 kr.
For comparison, the nabolejligheden without hjemfaldsforpligtelse offered to 1.842.000 kr. In other words, pay the buyer of the apartment with hjemfaldspligt an overpriced on the mentioned 778.000 kr.
In the two other examples of apartments with hjemfaldspligt is the overcharge is not nearly as big and are respectively 19 and 29 percent.
Easements – what is it?
Condos in England on a long-term lease by leasehold
In England and Wales traded properties, often as a so-called ‘Leasehold’. In practice this is a long lease in which you as the buyer pay the whole rent in advance and has the right to sell the lease. According to the british newspaper, The Guardian, was 27 percent of all real estate transactions in 2017 traded as Leasehold.
As the holder of the Leasehold apartment, you pay ’rent’ to the building’s private owner. The rent must cover the grundleje, maintenance, taxes and insurance on the property.
Leasehold is a lucrative business for the owners, who can look forward to a steady income in the form of grundleje. The system is hard transparent for the ordinary citizen, as a disorganized group of individuals is faced with an owner with significant financial and legal resources at its disposal.
The british government has promised to examine the possibility of legislation to slow down the spread of the leasehold.
After the city of Copenhagen in 2017 amended the conditions for a fee of hjemfaldspligten, it has become an expensive pleasure to get dropped hjemfaldspligten on a property.
instead, choose many sellers to postpone the date, where the municipality can take over the property free. Of Bolius’ samples, it appears that sellers typically postpone hjemfaldspligten, so there goes at least 32 years before the municipality can assert his right.
the Explanation is, first and foremost, to realkreditselskaberne not want to make loans for properties where there are less than 32 years, hjemfaldspligten can be made applicable. In addition, the sellers in most cases can hardly afford to get cancelled hjemfaldspligten.
A more conspiratorial but not-dokumenterbar approach to the problem is that the seller choose to let buck go on to the next buyer in the saying that ‘well, I have been taken by the nose, so there are certainly other, it also lets itself take by the nose’.
good to know, when you are considering to buy a condo
Facts about Bolius
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