Legal Procedures of Buying a Property 1

If you have finally found the property you are going to buy and reached a decision on the payment plan, it is now the turn for performing the legal procedures.

Property Purchase GuideTogether with your venture to buy a property, you will also have begun the legal procedures. Even if the legal procedures seem boring and painstaking, this is a process which you will be able to complete in a day or two, if there are no issues. You will need to fulfill all requirements fully in accordance with the required laws, in order not to be faced with penalties during and after the purchase process. Here is the legal process which begins after buying a home.

Determining the current value of the property

The first step is learning the current value from the from the municipality to which the property is tied. The current value is the value of the purchase price you notify to the municipality, subject to being higher than the minimum limit determined by the municipality based on its square meter size, for that particular neighborhood. The municipality records this as the official value.

[danger]It is important to declare the value correctly. Otherwise you will be required to pay a fine. This is why you will need to monitor these procedures closely. You must not allow a realtor or the homeowner to determine this value lower than it actually is, on your behalf. If you have under-declared the current value, you can increase it by submitting a petition of remorse and paying the title duty difference.[/danger]

Title of the property is the second stage

-After determining your current value, the buyer and seller will need to separately pay the 2 percent title duty to the contracted bank, together with the floating capital fee. Once the duties have been paid, you can make an application to the land registry with the necessary documents. In short, the required documents are original and photocopy identity documents, one passport sized photograph from the seller and two from the buyer, the original and photocopy of the title deed, a letter from the municipality confirming that there are no debts present in respect of the home – which is obtained when the current value is being obtained – and the mortgage documents of the bank, if a loan is to be used.

-Once you have handed over your documents to the land registry you can carry out your sales transaction on the same day. If there is an appointment system, this may take a second day.

-If the property has more than one legal owner, they will need to be present at the land registry in person, or have given a power of attorney. Otherwise, the seller can only sell his / her own share.

-If there is a lien on the property, it can be sold with the lien, if the buyer accepts it. However, the person who accepts it will also have accepted the debt which is the cause of the lien. The land registry office will notify the buyer both verbally and in writing, that there is a lien on the property.

Inherited properties

An inheritance and transfer tax declaration needs to be submitted within four months of the date on which the person who left the property as an inheritance, passed away. The tax which has been accrued needs to be paid in six equal installments over three years. In order that the inherited property can be registered at the land registry in the name of the inheriting party, a 0.9 percent duty also needs to be paid, apart from the taxes. Even if the full amount of the inheritance and transfer tax does not need to be paid, this payment does become important at the stage where the real estate has been sold by the inheriting party.

Ongoing property projects

-When the construction is at the project stage, or rough construction stage, even if the price of the purchased property has been paid in part or in full, the title is not transferred until the construction is completed. Therefore, the buyer cannot carry out any procedures until s/he takes over the property. The buyer will need to wait to receive the title, and does not need to pay the property tax at this stage.

Even if a land with construction servitude title has been acquired, the property tax declaration for the land needs to be submitted to the relevant municipality by the end of the year in which the title was acquired.

Cooperatives

Those buying a property from a cooperative will not pay property tax during the construction stage. That is because the property tax of the cooperative estate is paid by the cooperative legal entity. When the project is completed and title is acquired, the procedures related to the acquisition of real estate will need to be carried out.

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