Are you organizing to buy your first property? Did you know that there are expenses that go beyond the value of the entry and the installments of the financing?
No?! So, our post is all about your current moment. Discover the extra costs of the real estate contract and avoid headaches when buying your first property. Follow us and check it out!
Property Transfer Tax
The Property Transfer Tax (ITBI) is a municipal tax, levied every time there is a transfer of property, that is, when someone buys a property.
The amount of the tax varies from one city to another and normally revolves around 3% of the city council’s valuation value (venal value), although in some cases the transaction value is used as the basis.
For those who finance the property within the Financial Housing System (SFH) the rules are a little more beneficial. On the amount effectively financed up to the limit established in each municipality, the rate of 0.5% is applied. Regarding the remaining amount, the normal tax rate is applied.
The registration of the purchase and sale contract (or deed) is very important to guarantee the property of the property to the buyer. The popular saying goes that “whoever does not buy is not the owner”, so, until the registration is done, the transfer of ownership will not take place.
The registration fee varies according to the value of the asset. Those who are purchasing their first property can count on a 50% discount, through the issuance, in notary, of a negative certificate of ownership.
Confusion between real estate registration and public deed is common, but it must be made clear that they are two separate documents. The deed is a document made by a notary, by a notary, through the payment of a fee that differs in each state of the federation.
It is worth noting that, as with the registration of properties, a 50% discount is provided by law for those who are purchasing the first property. In the case of financing, the deed is replaced by the contract with the bank, and it is not necessary to issue it until the installments are paid.
Negative certificates, although not always mandatory, are of great importance even to ensure the smoothness of the business. Each party involved is responsible for their own certificates, and documents are issued in different bodies.
Regarding certificates, both negative and proof of marital status (birth or marriage), it is very important to pay attention to the validity periods. It is not uncommon for cases in which the deal is concluded to take longer than expected, making it necessary to issue new certificates, which causes unnecessary expenses.
The responsibility for paying the broker’s fee varies from case to case. Usually it is the responsibility of the seller, who usually embed the value in the price of the property. But it may be the buyer’s responsibility if there is a clear provision in the contract.
When it comes to properties on the plant / under construction, usually the construction companies bear such costs.
Variations according to the type of business
In addition to the value of the property, the type of business also influences the values of the extra costs of the real estate contract. Meet two of them:
In this case, the issuance of the public deed is mandatory. Its value is defined according to the location of the property. Another peculiarity is in the collection of the ITBI, when the total rate, already mentioned above, is levied on the full value (venal or transaction – according to the rules of each municipality) of the property.
As we have seen, it is not necessary to issue a public deed in financing. As for the ITBI, there is emphasis on the application of the reduced rate on the amount actually financed. On the other hand, other fees are charged, such as the financing subscription fee and the property appraisal fee.
Although some of these extra costs can be included in the financing, the ideal is that you plan and try to reserve these values. Taking proper precautions, there is no reason to worry about buying your first property.
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