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Real Estate - Property Purchase and Sale

Our main area of activity in our office directed to Non Residents.

Nowadays, it is important to be sure of all the paperwork involving the purchase and sale of a property.

At our office, we give prime importance to the legal aspects surrounding these transactions, including an update of all documentation of the property.

  1. It is important that the property to be acquired is registered at the Land Registry Department and duly registered at the Tax Office in favour of the prospective seller;
  2. It is important that the property is not mortgaged or pledged. In case it is mortgaged to a bank, we must be ensured that at the time of the granting of the Public Deed of Sale, its cancellation is provided;
  3. It is also important to know if the property is not rented to third party;
  4. Certification that the property was built legally, complying with all requirements of the initial project, which originated the Habitation Licence;
  5. Check with Finance that all taxes, including IMI (council tax), have been paid and that there are no amounts overdue.

After the verification of all the information explained above, comes to the stage of signing the Promissory Contract of Purchase and Sale.

> What is the Promissory Contract of Purchase and Sale?

The Promissory Contract of Purchase and Sale, is a document that governs the rights and obligations of the parties, seller and buyer, and the conditions of the business, during this period and until the completion of the Definitive Agreement – Final Deed.

During the interim of time between signing the contract and the granting of the Public Deed of Purchase and Sale, there are situations that must be ensured, particularly where the buyer is asking for a loan/mortgage for the purchase.

When this happens, we must make every effort in making the provisional registration of purchase and mortgage at the Land Registry Department, which is valid, after it’s done, for six months.

After this task, and when there’s a need for it, namely the use of bank credit for the purchase, the purchaser needs to pay the, IMT (former real estate transfer tax) and the Stamp Duty Tax (this tax falls on the value of sale, eg.: 0.8%  x  sales price = Stamp Duty Tax).

Below, we present the IMT Calculation Table for the year 2011 (note that each year, and after approval of the state budget, we may get a new table with new values).

> IMT Calculation Table for 2011

Permanent Habitation

TAXABLE AMOUNT

RATE APPLIED

AMOUNT DEDUCTIBLE

Up to 90.418,00

0%

-

From 91.418,00 a 123.682 eur

2%

1.808,36 eur

From 123.682 a 168.638 eur

5%

5.518,82 eur

From 168.638 a 281.030 eur

7%

8.891,58 eur

From 281.030 até 561.960 eur

8%

11.701,88 eur

Superior to 561.960 eur

6%

-

Habitation

TAXABLE AMOUNT

RATE APPLIED

AMOUNT DEDUCTIBLE

Up to 90.418,00 eur

1%

-

From 90.418, até123.682 eur

2%

904,18 eur

From 123.682 até 168.638 eur

5%

4.614,64 eur

From 168.638 até 281.030eur

7%

7.987,40 eur

From 281.030até 538.978 eur

8%

10.797,70 eur

Superior to 538.978 eur

6%

-

After the settlement of the IMT Tax and Stamp Tax, it must be scheduled the Public Deed of Sale, and eventually Loan and Mortgage, in a Notaries Office, where all documentation is reviewed by the Notary, and the business finally ends.

At this moment, we will have to register the property at the Land Registry Department, on behalf of the new owners and endorsing this title to the Finance Department.

At our office, we also preserve the change of water meters, electricity and gas, to the name of the new owner, as well as payment by direct debit to the Client’s account.

 
 
 
 
 

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