What taxes are payable in relation to the purchase of real estate via the various types of corporate vehicle available and who is responsible for the payment of these taxes?
The purchase of a real estate in Angola is subject to transfer tax (SISA) as well as stamp duty.
The purchase of a real estate is subject to SISA at a rate of 2 percent (levied on the acquisition amount when equal to or higher than the value registered in the land register). Additionally, it is also subject to stamp duty at a rate of 0.3 percent (levied on the acquisition amount). Stamp duty is also due for the execution of a sale and purchase deed at a fixed amount of AOA2,000.
The first transfer of a property (as long as the price is below a certain threshold) may be exempt from SISA as long as the property is exclusively for personal and permanent residence purposes. Long-term leases (exceeding 20 years) also trigger the payment of SISA, as well as the execution of a promissory sale and purchase agreement, which includes the transfer of use.
The purchaser is responsible for the payment of the SISA and stamp duty.
Typically, share deals do not trigger the payment of SISA. However, in the event that the purchaser ends up holding more than 50 percent of a company holding real estate and does not prove that the main purpose of the operation is not the acquisition of the immovable properties then SISA is due.
Stamp duty is payable in all Australian States and Territories on the purchase of Australian real estate, including the following types of duty:
Goods and Services Tax (GST), similar to VAT in Europe, of 10 percent may also be payable.
The sale of shares in a company holding real estate will normally not be considered to be a sale of the real estate itself. No transfer tax (VAT or registration duties) is therefore due. Existing anti-abuse rules should, as a general rule, not affect share purchases. Exceptionally, certain share deal structures could possibly fall within the scope of these measures.
The transfer of ownership or the disposal of real estate interests in Belgium is either subject to registration duties or to VAT. These two taxes do not apply cumulatively.
A 12.5 percent registration duty (10 percent in the Flemish region) is generally payable by the buyer and calculated on the basis of the contractual price or the market value, whichever is higher. Reduced rates and exemptions may apply in function of the nature of the buyer and the type or size of the property.
A reduced rate (4 percent in the Flemish region, 5 percent in the Walloon region and 8 percent in the Brussels region) is available for professional sellers provided that certain conditions are met, among which the obligation to buy and sell a number of properties within a certain period of time.
Restitution of paid registration duties can be obtained if a property is re-sold within two years, depending on the region where the property is located, as from the signature of the notary acquisition act (36 percent in the Brussels region and 60 percent in the Flemish and the Walloon Region).
Where a company finances the purchase by a loan, a mortgage may be created over the property. The following indirect taxes are payable on the subscription of a mortgaged loan:
In the Federation of Bosnia and Herzegovina, the sale of real estate is taxed at a level set by each canton individually.
The tax rate is usually 5 percent of the value of the real estate, as determined by the appraisal team for the municipality. This tax is paid usually by the buyer and cannot be reduced.
No Canadian federal or provincial income tax applies to the acquisition of real estate.
Certain provinces levy tax on the registration of an interest in real property in the relevant provincial land titles office. At least one Canadian city, Toronto, levies a similar registration tax in addition to the provincial tax. Ontario levies an additional 15% registration tax on foreign purchasers of residential real estate in the Toronto region, and British Columbia levies an additional 20% registration tax on foreign purchasers of residential real estate in the Vancouver region and in certain other specified areas in British Columbia.
In a property transfer, the taxes paid by the purchaser of real estate are as follows:
Individual buyers may enjoy a favourable deed tax rate or be exempted from paying the stamp duty provided that required conditions have been satisfied.
In a property transfer, the taxes payable by the seller of real estate are as follows:
In a share transfer, the taxes paid by a purchaser of a real estate company are as follows:
In a share transfer, the taxes paid by a purchaser of a real estate company are as follows:
From 1 January 2015 any acquisition of a building and/or a development site from a VAT payer is subject to VAT at the rate of 25%. This rule applies to buildings, which are new, ie have not been in use since their construction and buildings in respect of which the time elapsed since their first use up to the sale is two years or less. Acquisitions of “old” (used) buildings, ie those which do not fall into the above categories, are subject to land transfer tax unless both parties (being VAT payers) agree on VAT and reverse charge. Acquisitions of land which is not a development site are either subject to VAT (if the buyer is also a VAT payer and both the seller and the buyer agree to apply VAT) or land transfer tax. VAT is paid by the buyer.
Acquisition of real estate assets that are not subject to VAT are subject to real estate transfer tax at the rate of 4% (since 1 January 2017). Real estate transfer tax is payable on the market value of the property and the tax authorities have the right to perform their own assessment of this if appropriate. Generally, real estate transfer tax is paid by the buyer. However, the seller is also a guarantor for the payment.
Exemptions from real estate transfer tax (if applicable) apply in the following cases:
Real estate cannot be contributed to the share capital of a closed end real estate investment fund, so this exemption from real estate transfer tax does not apply to these funds.
Transfers of real estate are, generally speaking, subject to VAT and income tax and specifically real estate acquisition tax. In the case of the real estate acquisition tax, when it concerns the acquisition by purchase or exchange, the transferee (purchaser) being the new owner of the real estate asset is assessed for the tax. Real estate acquisition tax amounts to 4 percent of either the purchase price or the value of the real estate as determined by an official assessment, whichever is higher. Opposed to the past regulation, the parties are not entitled to agree that the tax will be paid by the other party.
Besides the taxes mentioned above, Czech law provides for two other types of real estate tax payable annually, consisting of tax on land and tax on buildings or "units" (ie flats and retail units).
There are no taxes on the purchase of real estate in Denmark.
Generally, the purchase of property is subject to transfer taxes or value added tax (VAT) at the standard rate (20%) depending on whether the seller and the buyer are VAT taxpayers or not.
The VAT tax regime complies with EU directives. As a general rule, real estate properties are placed within the scope of the VAT standard regime and no longer subject to a specific regime.
The following rules apply to transactions entered into by a French SPV (registered for French VAT) and a seller registered for VAT:
Please note that, regardless of the buyer's registration in France for VAT, if the seller is not registered for French VAT, the transaction is not subject to VAT. Transfer taxes are due at the 5.09006% to 6.40665% normal rates specified above, unless the buyer is indeed registered for French VAT and undertakes either to re-sell or to erect a building (see the specifics above about these undertakings).
The transfer tax regime also differs if the seller is registered for VAT in France but the buyer is not: in this case, the benefit of the reduced rates of transfer taxes subject to the above mentioned undertakings are not available.
VAT can be recovered under certain conditions if the asset is used for a VATable activity (eg the building is rented under the VAT regime). VAT is recovered by offset against the VAT collected on the VATable activity or by claiming a reimbursement of VAT credit to the public Treasury. Foreign investors outside of the EU who are not registered for VAT in France must appoint a VAT representative in order to claim a VAT reimbursement.
Furthermore, notary fees are due at a rate of 0.814% on the sale's price. It is generally due by the buyer.
The sale of shares in a company holding real estate (where the value of the real estate represents more than 50% of the company’s assets) is subject to a transfer tax of 5% of the price paid for the shares or the fair market value if higher.
Moreover, transactions involving real estates or rights on real estates are subject to a real estate security contribution (contribution de sécurité immobilière) of 0.10% of the price paid for the real estate or for the rights on real estates.
In general, the acquisition of real estate is exempt from VAT. However, if both parties to the transaction are businesses, the seller can opt out of the VAT exemption. In this case VAT will apply at the rate of 19 percent. Opting out of the VAT exemption only makes sense where the seller has used or has intended to use the property for business activities that are subject to VAT. The VAT due on a real estate sale is subject to the reverse charge rule, ie the purchase price is a net price and the buyer will pay the amount due as VAT to the tax authority.
If the buyer is able to claim back the input VAT in full, no net VAT is ultimately payable on the transaction.
VAT paid on real estate transactions can be reviewed for a period of ten years. If the VAT status of a purchased building changes during this period (for example, if the building is no longer used for business activities subject to VAT) an adjustment will be made to the VAT initially reclaimed on the acquisition or construction of the building. The amount due is calculated pro rata over time.
A real estate transfer tax of 3.5 percent to 6.5 percent, depending on the German federal state in which the property is located, is generally payable on real estate transactions in Germany.
Real estate transfer tax applies to the direct purchase of a real estate asset, or to the grant or transfer of transferable building rights (Erbbaurechte). All parties involved in the real estate transfer agreement are generally liable for this tax, although the seller will normally insist on a clause which makes the buyer responsible for paying it.
The transfer of an interest in a partnership holding real estate triggers real estate transfer tax if 95% or more of the partnership interests are transferred within five years. The partnership is liable for paying the real estate transfer tax. Irrespective of this five year period, real estate transfer tax becomes due if at least 95% of the partnership interests are directly or indirectly held by one entity or individual for the first time.
Please note that a reformation of the German real estate transfer tax is currently under discussion. The reformation might lead to a reduction of the current 95% limit to a 90% limit and the extension of the holding period to ten years, instead of the current five-year period in the case of a transfer. However, no legislative proposal has been made so far. The entity/individual holding the interests is liable for paying the real estate transfer tax. For the purposes of these rules, indirect transfers or concentrations of partnership interests have to be taken into account. These rules also apply if partnership interests are transferred within the same group of companies.
There are strategies available to avoid real estate transfer tax eg if the seller remains as a partner in the partnership, holding a stake of more than 5% for more than five years and provided further that the purchaser directly or indirectly does not acquire more than 94.9% of the interest in the partnership.
The acquisition of real estate via a corporation triggers real estate transfer tax if at least 95% of the shares are held by one entity, individual, or group of related entities or individuals for the first time. The entity, individual or group holding these shares is liable for the real estate transfer tax. Again, indirect transfers or concentrations of shares have to be taken into account in principle.
As of January 2010 a new rule (§ 6a Real Estate Transfer Tax Act, RETTA) was introduced into the law which allows in certain circumstances an exemption from real estate transfer tax where there is a restructuring within a group of companies.
Potentially, there are strategies available to avoid real estate transfer tax, eg if a company is acquired by two independent buyers.
The obligation to pay stamp duty rests on both the vendor and purchaser but the commercial practice in Hong Kong is that the purchaser will usually be responsible for paying it. The amount to be paid depends on the consideration/market value of the property at the time of the purchase.
On 4 November 2016, the Hong Kong Government announced it would increase the ad valorem stamp duty (AVD) rate for residential property to a flat rate of 15% of the consideration or value of the residential property, whichever is higher. The 15% AVD rate would not apply to the acquisition of non-residential property and Scale 1 rates would apply to them.
Unless specifically exempted or otherwise provided, any instrument executed on or after 5 November 2016 for the sale for the acquisition of any residential property or the conveyance on sale of any residential property is subject to the 15% AVD rate.
Please see this link to tables of the Scale 1 AVD and Scale 2 AVD rates on the Hong Kong Government website.
There are a number of exceptions to the application of the 15% AVD rates (in which case, the Scale 2 AVD rates apply instead):
Additionally, AVD does not apply in the following cases (in which case, no AVD is payable):
Under the new adjustment, the refund mechanism for a HKPR purchaser who changes his/her single residential property has also been retained. Upon paying AVD at the new 15% rate and satisfying conditions for partial refund, he/she may seek a refund of AVD paid in excess of that computed under Scale 2 rates.
The purchaser and the vendor continue to be jointly and severally liable to pay AVD at the new 15% rate. Payment should be completed within 30 days after the execution date of the agreement for sale or conveyance on sale for the acquisition of the residential property.
During the transitional period before the relevant legislation is enacted, instruments chargeable with the new 15% rate are stamped according to the Scale 1 rates. After the enacted legislation is published in the Gazette, the difference between the AVD payable at the 15% rate and the Scale 1 rates should be paid within 30 days.
HKPRs mainly include holders of valid Hong Kong Permanent Identity Cards as defined under the Registration of Persons Ordinance (Cap. 177 of the Laws of Hong Kong). This definition also extends to Buyer's Stamp Duty (see below).
The government of Hong Kong has introduced Buyer's Stamp Duty (BSD) which took effect on 27 October 2012. Unless exempted, BSD is imposed on all residential properties acquired on or after the effective date by any person (including a company incorporated) other than a HKPR. It is charged at a flat rate of 15% on the stated consideration or the market value of the property (whichever is the higher), and is payable in addition to the AVD and special stamp duty (please see section on ‘Special Stamp Duty’ below), if applicable.
The buyer or the transferee is liable to pay the BSD within 30 days after the execution of the chargeable document (eg a provisional agreement of sale and purchase). If the time for stamping of any instrument chargeable with BSD falls before the amended Stamp Duty Ordinance was published in the Gazette, that time for payment is to be replaced by a period of 30 days commencing immediately after the date of Gazette.
BSD will be exempted in a number of situations. Below are the circumstances in which the Government will grant an exemption:
The acquisition of real estate in Hungary as part of a purchase, exchange or similar transaction is normally subject to real estate transfer tax, payable at 4% of the market value. A reduced rate of 2% applies to the value above HUF1 billion. Nevertheless, the transfer tax payable cannot exceed HUF200 million per real estate. The tax authority will normally accept the consideration stated in the transfer agreement as the market value unless it is obviously too low.
The main exceptions to the general transfer tax rate are:
The acquisition of 75% or more of the shares (including shares held by close relatives, related parties, etc) in a company holding Hungarian real property is subject to transfer tax provided that the balance sheet value of the company's Hungarian real property (or properties) exceeds 75% of the company's total balance sheet value (subject to certain adjustments). In such cases the general tax rate, ie 4% applies. Nevertheless:
The definition of a company holding Hungarian real property also includes companies which themselves are not owners of real property, but have, directly or indirectly, an equity interest of at least 75% in another company (other companies) owning Hungarian real property. If no adjustment applies as prescribed by the Duties Act, the tax base is the market value of the real property (or properties) owned by the acquired entity (or entities) in proportion to the shares held by the acquirer.
The transfer tax is paid by the buyer.
The direct acquisition of real estate in Ireland by an individual, partnership or a company will give rise to a stamp duty liability. The rate is 6% for commercial real estate. The rate of stamp duty on residential real estate is 1% on the first €1 million and 2% on any balance over €1 million. Stamp duty is normally paid by the buyer.
VAT may also be payable at the rate of 13.5% on completion of the transaction where there is a direct acquisition of real estate. This is determined on a case-by-case basis as each property has its own VAT history recording previous usage and the VAT status of the seller. A buyer may be entitled to recover VAT, depending on the buyer's VAT status and the purpose for which the property is used.
The indirect acquisition of real estate in Ireland through the acquisition of shares in an Irish special purpose vehicle company may, in certain cases, be subject to stamp duty at the rate of 6% where the shares derive their value wholly or partly from the underlying real estate, which is normally paid by the buyer. If the acquisition is structured through a share subscription and redemption of shares in an Irish corporate vehicle, stamp duty may be avoided.
No VAT is payable on the acquisition of shares.
Where there is an indirect acquisition of real estate in Ireland one must consider whether there are any latent gains or losses attached to the real estate. In the case of latent losses, there are certain rules which restrict capital loss buying which must be considered.
The disposal of the real estate may give rise to capital gains tax for the vendor, currently at the rate of 33%, regardless of where the vendor is resident. However, there is a relief from capital gains tax for real estate purchased from 7 December 2011 to 31 December 2014, provided it is held for a specified period. The original holding period was seven years. There was proportionate relief where the property was held for any period longer than seven years, with the relief being lost in its entirety if the property was sold during the initial seven-year acquisition period.
The requisite holding period has been reduced from seven years to four years. The measure has created a three-year period (ie years 4 to 7) in which the property can be sold and benefit from a full exemption whereas if held longer than seven years, only proportionate relief is available.
In order for the relief to apply, the property must be acquired for a consideration equal to the market value of the property (or if acquired from a relative, not less than 75% of the market value on the date acquired). This exemption applies to all persons regardless of how the real estate is acquired, ie individual or corporate.
The disposal of shares in a company which derives its value or the greater part of its value from Irish real estate may also give rise to capital gains tax for the vendor, currently at the rate of 33%, regardless of where the vendor is resident. The relief from capital gains tax in respect of real estate purchased up to 31 December 2014 does not extend to the disposal of shares in a company which derives its value or the greater part of its value from Irish real estate.
Sales of residential real estate made by VAT-liable entities are normally exempt from VAT. Residential sales are only subject to VAT if the seller is a construction company that has procured or renovated the property less than five years before the sale takes place, or after five years, if the construction company opts in the deed of sale for VAT to apply. VAT is payable at the rate of 10% (22% if the real estate is registered as a luxury dwelling).
The sale of commercial real estate (including offices and industrial property and sales of retail properties and hotel buildings separately from any associated businesses) is subject to VAT at the rate of 22% (10% in the case of renovated properties if sold by the entity performing the renovation works) if:
VAT-exempt residential transactions are subject to the following transfer taxes:
Sales of residential property which are subject to VAT are subject to registration, mortgage and cadastral tax at fixed amounts of €200 for each type of tax.
Sales of commercial property, whether or not they are exempt from VAT (except where the seller is an individual), are subject to the following transfer taxes:
For acquisitions of commercial property by Italian real estate investment funds and listed real estate investment companies (SIIQs) the rates of cadastral tax and mortgage tax are halved to 0.5% and 1.5% respectively.
In the case of retail property or hotels, if any licences or other intangible assets are included in the sale, then the buyer is regarded as purchasing a going concern, since the building is part of a business and the activities on the premises are carried out by means of authorizations held by the owner. The sale of a going concern is not subject to VAT, although registration tax applies as follows:
The sale of real estate as a going concern is subject to mortgage tax and cadastral tax payable at a fixed amount of €200 each.
The buyer normally pays the transfer tax but both the seller and the buyer are liable for the payment and for any assessment by the tax authorities. VAT is also paid by the buyer, who can reclaim it by offsetting the VAT due to the tax authorities against its output operations. In some circumstances, a VAT credit can also be obtained.
EU-resident entities may request a refund of VAT paid if certain conditions are met. If the entity is not resident in the EU then it must register for VAT in order recover any VAT incurred.
Special rules apply to the transfer of property into a real estate fund in exchange for units if the real estate has mostly been leased to tenants.
Where real estate is acquired by way of shares in the corporate vehicle holding the asset, the transaction is normally VAT exempt. The transfer will, however, be subject to registration tax of €200.
Real property acquisition tax is levied on the acquisition of land or buildings; however, an acquisition by merger of real estate-owning company is exempt. The tax base is the value of the real estate listed in the official ledger, which is in many cases lower than the market value. The tax base can be reduced under the GK-TK or TMK structures when certain requirements are satisfied. Currently, the tax rate is 3% on land and dwellings, and 4% on buildings other than dwellings.
The designated taxpayer for this tax is the acquirer of the real estate.
Under a plain interpretation of the statute, an acquisition of entrusted real property through TBI is not subject to this tax. To our knowledge, the tax authorities have not attempted to assess real estate acquisition tax on the transfer of TBI to date.
Registration is necessary for an acquisition of real estate or TBI for perfection purposes. The registration tax is levied on real estate transactions such as the purchase of real estate or the construction of a building. The registration and license tax for purchase of land, for example, is currently 1.5% of the value listed in the official ledger. Reduced tax rates can be applicable to a GK-TK and a TMK when certain conditions are satisfied.
Seller and purchaser are both legally subject to registration tax, however, a purchaser often bears the registration tax in practice.
Any documents listed in the Stamp Duty Act are subject to stamp tax to the extent it is executed in Japan. Contracts for the transfer of real estate or land leases are subject to stamp tax. The tax amount varies depending upon the amount stated in the conveyance or lease document (eg the tax amount is JPY100,000 when the stated amount is in excess of JPY100 million but less than 500 million. Mitigation treatments are not considered.) Meanwhile, a trust agreement or contract for a TBI transfer is also subject to stamp tax and the tax amount is only JPY200 regardless of the amount stated in the agreement.
Stamp tax is paid by affixing a fiscal stamp on the documents and sealing it with a certified stamp. Seller and purchaser are both legally subject to stamp tax and the party bearing the cost is often decided by agreement between the parties.
The following indirect taxes may apply where the real estate is acquired directly (an asset deal):
In addition, charges (kadastrale rechten) can be levied by the Land Registry.
Where property is acquired by buying the shares in an existing company which holds the real estate (a share deal), RETT may apply.
Not all taxes apply to all investment structures.
RETT can be payable in relation to both asset deals and share deals. Real estate share deals are situations where the company being acquired qualifies as a 'real estate company' namely if at least 50 percent of its assets consist of real estate (either in the Netherlands or abroad) and that real estate is mainly (70 percent or more) instrumental in the trading of and/or development of real estate, and 30 percent of those assets are located in the Netherlands.
RETT is paid by the buyer. An exemption is sometimes available eg if newly built real estate or building land is purchased and VAT is payable.
The rate of the RETT is 6 percent, unless residential property is involved. For residential property (houses, apartments etc) the transfer tax is at a rate of 2 percent in order to encourage the buying of houses by individuals.
The various taxes that apply on real estate transfer transaction includes Capital Gains Tax (CGT), Stamp Duties and Value Added Tax (VAT) (where the property is not undeveloped land).
Capital gains realised on the sale of real property is subject to CGT and payable by the seller of real estate. The rate under the Capital Gains Tax Act is 10% of the gains from the sales. In reality the tax authorities (Federal Inland Revenue Service) decides the amount payable on a ‘best of judgment assessment’ basis which uniformly is about 1% of the value of the property. All deeds for transfers of interests in real property are required to be stamped under the Stamp Duties Act and the purchaser or assignee is responsible for this payment. The Federal Inland Revenue Service (FIRS) assessed rates for stamping of transfer documents for is 1.5% for transactions involving a corporate entity. A different tax regime and rates apply to transfer transactions where individuals are parties and the rates vary within the 36 States in Nigeria. In Lagos State the rates payable CGT and Stamp Duties is currently 0.5% of the property value.
Stamp duty is normally payable on the transfer of title of real estate located in Norway whether commercial, residential or industrial at the rate of 2.5 percent of the sale value of the property. Normal arm’s-length conditions apply to calculating the sale value. The transfer of shares in limited liability companies and partnerships owning real estate is not subject to stamp duty. A transfer of real estate through the merger or de-merger of a limited company is also exempt from stamp duty.
A minor registration fee of approximately €60 is payable in order to obtain legal protection for the right of ownership.
The buyer is responsible for paying stamp duty and registration fee.
In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), where the seller is not an entity carrying on a business, a 2% tax on civil law transactions (PCC) is due, based on the market value. This is normally the purchase price but can sometimes be assessed at a higher level by the tax authorities using an authorized expert's opinion. The obligation to pay PCC rests with the buyer. If the seller is an entity carrying on a business, value added tax (VAT) is usually payable. Generally, the standard rate of 23% applies. With respect to subsidized housing – a rate of 8% applies.
In principle, VAT charged by the seller can be recovered by the buyer as input VAT (if the purchaser is a VAT taxpayer carrying out transactions which are subject to VAT). If a sale is subject to VAT, PCC is not due. The sale of agricultural land is exempt from VAT (but in such cases 2% PCC is due).
Any sales of real property other than land are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances, the seller may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.
If a sale is exempt from VAT, it is subject to tax on civil law transactions (PCC) at a rate of 2%.
In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), PCC at 1%, calculated on the basis of the fair market value of the shares, is payable by the acquiring party. Similarly, if an interest in a partnership is purchased (ie a partnership holding the interest in the real estate), PCC at 1%, calculated on the basis of the market value of the interest, is payable.
The following taxes may apply to the purchase of real estate, depending on the structure of the deal.
Municipal Property Transfer Tax (IMT) will be calculated on the price of the transaction or on the 'VPT' (value of the real estate assessed by the Tax Authority, which currently tends to correspond to the market value, subject to certain concessions), whichever is higher.
IMT is calculated using the following formula:
(Taxable value x Rate) – Threshold deduction = IMT to be paid
IMT is charged at the following rates:
|Taxable value (€)||Rate (%)||Threshold deduction (€)|
|Up to 92,407||0||0|
|92,408 to 126,403||2||1,848.14|
|126,404 to 172,348||5||5,640.23|
|172,349 to 287,213||7||9,087.22|
|287,214 to 574,323||8||11,959.26|
|Taxable value (€)||Rate (%)||Threshold deduction (€)|
|Up to 92,407||1||0|
|92,408 to 126,403||2||924.07|
|126,404 to 172,348||5||4,716.22|
|172,349 to 287,213||7||8,163.09|
|287,214 to 550,836||8||11,035.30|
To discourage the purchase of real estate in Portugal through offshore companies, IMT is levied at a rate of 10% if the buyer is a company established in a country, territory or region whose tax regime is deemed to be clearly less onerous. In this case, no exemptions are made available.
Since 2016 the acquisition of real estate by open-end or privately placed closed-end Real Estate Investment Funds or Retirement Savings Funds are no longer be exempt from IMT.
However, the property deals may be exempt from IMT or may benefit from tax reliefs in the following cases, among others:
Real estate owned by open-ended or publicly offered closed-end Real Estate Investment Funds (REIFs), pension funds, or retirement funds will no longer benefit from the current 50% IMI exemption.
The transfer of property is also subject to a flat rate of 0.8% of stamp duty. Stamp duty will be calculated on the price of the transaction or on the VPT, whichever is higher.
Although, as a rule, the transfer of property and shares in Portugal is exempt from VAT, transfers of property can be subject to the tax. A seller may waive the exemption if certain conditions have been met and they have complied with various formalities.
If the exemption is waived, VAT can be recovered in accordance with provisions in the Portuguese VAT code.
In the case of a share deal, IMT only applies to the purchase of an equity position in a private limited liability company or a privately placed closed-end REIF, which holds real estate assets located in Portugal. IMT will be due if, after the acquisition, the acquirer holds 75% or more of the company's total equity.
If the purchase of shares involves a corporation or a joint-stock company, the transaction is not subject to IMT or stamp duty. The same also applies to the purchase of an equity participation in a private limited liability company (or in a privately placed closed-end REIF) if the participation represents less than 75% of the total equity.
In both cases – asset deals and share deals ― the buyer is responsible for the assessment and payment of IMT, as well as VAT (reverse charge mechanism), if applicable. IMT must be paid before the deed and the notary is obliged to confirm its payment.
Stamp duty, where applicable, is paid by the buyer (who normally also pays the notary's fees). The buyer must present the payment proof to the notary at the moment of the transfer signature. The tax is paid through a document issued by the tax authority (the buyer can issue the document in the tax authority website or request it in a tax authority service. Also, the attribution of immovable property by means of reimbursement in kind of participation units, arising from the liquidation of private issue closed-end real estate investment funds, is subject to IMT.
The same is applicable to the transmission of immovable property arising from the merger of the referred kind of Funds.
Romania does not levy any stamp or transfer tax on the transfer of real estate. Nonetheless, the purchase of real estate in Romania involves several costs such as notary's fees and land book registration fees.
When real estate is purchased from individuals income tax is due for such acquisition. This is similar in nature to a transfer tax. The tax is payable by the individual transferring the ownership or other dismemberments of the real property right and is calculated by applying a rate of 3% on the taxable income, which is determined by deducting from the transaction value the amount of RON 450,000 (ie approx. EUR 95,000) which is non-taxable.
The value on which the tax is levied is the transaction value set forth by the parties through the transfer documents. If such value is under the minimum value set out in the valuation records kept by the notaries public, the notary public shall notify the tax authorities with regard to the transaction.
This income tax is payable by the seller and must be paid to the notary public before the transfer agreement is authenticated. The tax is not due upon acquisitions made from legal entities or
self-employed persons which are registered with the tax authorities and pay general income tax.
Non-resident entities and individuals are subject to a 16 percent withholding tax (if there is no overriding legislation and there are no overriding provisions in applicable double-tax treaties) on certain types of income derived from Romania, such as: capital gains, interest and royalties, commissions, income from management and consultancy services (irrespective of where the services are performed) or from other services provided in Romania and income derived by non-residents from the liquidation of a Romanian legal entity. The withholding tax applicable for income derived from dividends is 5 percent, while for certain other income derived by non-resident individuals the applicable withholding tax rate is 10 percent as of 1 January 2018.
The withholding tax is usually reduced or eliminated by double-tax treaties (at present, Romania is a party to more than 85 double-tax treaties which usually follow the OECD model), where a valid fiscal residence certificate is made available by the non-resident beneficiary of the income at the moment when the payment is made. Also, for certain types of revenue (i.e. dividends, interest, royalties), the withholding tax rates can be reduced to nil if the relevant legal conditions are met. In addition, in case the national legislation, the EU legislation or double-tax treaties provide different rates of withholding tax for the same income, the applicable withholding tax will be the one which is favourable for the payer (if the payer proves that it has the residence in a state which signed with Romania a treaty for reduction of double taxation and, when the case, proved that the requirements of the EU legislation are met)
Russia does not impose any real estate transfer taxes. In the event of an indirect purchase of real estate by virtue of purchasing shares or a participatory interest in a local company, no direct tax is usually payable by the buyer.
If a seller - a foreign legal entity - has no tax registration in Russia, the buyer may be required to withhold income tax from the proceeds (profits) from a sale of real estate or of non-listed shares in a Russian legal entity holding real estate.
The tax is payable at a rate of 20 percent on the proceeds of the sale of non-listed shares in a Russian or foreign legal entity where more than 50 percent of the company's assets consist directly or indirectly of real estate located in Russia; or on the proceeds of the sale of real estate in Russia. The relevant taxable income is generally calculated as the excess of the proceeds received from the sale of shares or real estate over the documented expenses incurred by the seller in the acquisition and sale of the shares or real estate provided that the foreign seller submits documents to the Russian buyer confirming the deductible expenses prior to receiving the proceeds.
A relevant double tax treaty may provide for a reduction in or exemption from withholding tax subject to the treaty clearance procedure.
If a seller is a Russian legal entity or an individual, the buyer will not be required to withhold either corporate income tax or personal income tax.
Donation tax and inheritance tax were abolished from 1 January 2004. Real estate transfer tax was repealed from 1 January 2005.
Therefore, generally speaking, real estate owners in Slovakia are subject to income tax, real estate tax, and VAT. Real estate tax is “local” because it is set by the municipality.
Asset deals are subject to:
and (in both cases) tax on the increase in the value of urban land (Impuesto sobre el Incremento de Valor de los terrenos de Naturaleza Urbana) if urban land is transferred.
The transfer of land for development or land which has already been developed is subject to VAT at the rate of 21%, except in the case of residential property. With regards to residential property the rate of the VAT applicable to an acquisition is 10%.
The first transfer of a new building, and the second and subsequent transfers of a building which has been or is transferred with a view to being substantially refurbished, as well as transfers resulting from the exercise of a call option by a lessee in a financial lease contract, are all subject to VAT.
A transfer of rural land and land which cannot be developed, second and subsequent transfers of buildings, and the first transfer of buildings that have been continuously used for a period of over two years (under a lease agreement), are exempt from VAT but subject to Transfer Tax at the standard rate ranging between 6% and 11%.
This does not apply if the buyer is a VAT taxpayer, entitled to a full or partial deduction of input VAT from the acquisition. In this case an option may be exercised to waive the VAT exemption and subject the transaction to VAT.
Notarial deeds that record land and building transactions subject to VAT, are subject to stamp duty. Rates vary from 0.5% to 3% depending on the location and type of transaction.
Land and building transactions which are exempt from VAT are subject to Transfer Tax at the standard rate ranging between 6% and 11%.
The transfer of property other than rural land is generally subject to a tax on any increase in value, calculated by the town council at the time of the sale.
The buyer pays the VAT or Transfer Tax. The seller pays the tax on the increase in value of urban land.
Share deals are subject to and exempt from Transfer Tax and VAT.
The purchase of shares in an SPV holding real estate, or owning shares in another company holding real estate, is subject to VAT or Transfer Tax at the standard rate ranging between 6% and 11% of the value of the property, when the transfer of the shares is made with the purpose of avoiding the payment of the tax that would have been paid in case of transfer of the real estate. The law considers there are tax avoidance reasons when at least 50% of the transferred assets consist of real estate located in Spain and are not used for business activities, provided that as a result of the purchase, the recipient of the shares acquires control or increases control over the entity.
Stamp duty is payable when the property is acquired directly. The tax rate for corporations is 4.25 percent of the purchase price or the tax value, whichever is higher. The tax rate is 1.5 percent for individuals. The buyer is responsible for paying stamp duty. No stamp duty is payable if the purchase is of shares in the company holding the property.
The following taxes and fees arise upon the transfer of real property regardless of whether the transaction involves corporations or individuals.
There are currently no such taxes charged in the United Arab Emirates.
There are currently no such taxes charged in Dubai.
The following indirect taxes may apply to the purchase of real estate through each type of corporate vehicle:
The following indirect taxes may apply to the purchase of real estate through each type of corporate vehicle:
The buyer pays no taxes in the case of an indirect purchase of real estate or shares through a local company. VAT does not apply to share purchases where the consideration is cash or share-for-share.
No US federal taxes are imposed on the purchase of real estate. Various states and localities impose taxes on the transfer of interests in real property within that state and/or local jurisdictions, which can be payable when deeds (documents) or other instruments which convey interests in real property are officially recorded (also known as ‘documentary stamp taxes’, ‘documentary transfer taxes’, or ‘real estate transfer taxes’). In some states (including some local jurisdictions within such state), documentary transfer tax or real estate transfer tax is due on transfers of certain interests in legal entities that own real property within the respective state.
Also, various states impose taxes when mortgages or deeds of trust securing loans that are secured by interests in real estate are officially recorded.
The transfer of land which has already been developed by a registered property developer is subject to VAT at the rate of 15%. The purchaser pays the VAT.
Gains realized from the sale of real estate are subject to capital gains tax (CGT), calculated by the Zimbabwe Revenue Authority (ZIMRA) in terms of Section 6 of the CGT Act at the following rates:
The purchaser pays the capital gains tax.
Share deals are subject to capital gains withholding tax payable by the shareholder at the rate of 5% for unlisted shares and in the case of listed shares the rate shall be 1% of the price at which the shares were sold.
Property acquired through donations is subject to capital gains tax. A detailed valuation report of the property should be submitted to Zimbabwe Revenue Authority.
A trust is assessable to capital gains tax on the sale of real estate.
Land and building transactions are subject to stamp duty payable by the purchaser at the standard rate ranging between 1% and 4%.
Acquisition of real estate for deceased estates is subject to estate duty, the amount is calculated in accordance with the Estate Duty Act.
Further, an intermediated money transfer tax of 2% is payable on every electronic transaction in terms of section 22G of the Finance Act [Chapter 23:04]. Where a transaction exceeds the sum of ZWL 750,000, a flat rate of ZWL15,000 will be payable. The tax is payable by the purchaser upon making payment to the seller or the seller’s conveyancers. Payments from the conveyancer’s trust account to the purchaser are exempt from the tax in terms of the Thirteenth Schedule of the Income Tax Act [Chapter 23:06].