REALWorld Law

Taxes

Other costs of acquisition

What costs/charges (other than tax and VAT) are payable on completion of the purchase of real estate and who is responsible for paying these costs and to whom are they payable?

Angola

Angola

Costs include the notary's fees, the property registration fee and any fees for professional advisors. The notary's fees are determined by law and payable by the seller. The registration fees are payable by the buyer.

Australia

Australia

Other costs include the fees of professional advisors.

Foreign persons must generally seek approval from the Foreign Investment Review Board (FIRB) for proposals to acquire Australian real estate unless certain exclusions apply (See Australia Corporate Vehicles). In order for FIRB to consider an application for such approval, application fees must first be paid to FIRB. These fees range from AUD5,000 up to AUD25,000 with a non-capped fee applicable to acquisitions of Australian residential land worth AUD3,000, 000 or more.

Also, the purchaser may be required to pay a fee to register the acquisition of the real estate with the Department of Land Titles. The amount of fee payable depends on the Australian state or territory in which the property is located and the value of the property.

Belgium

Belgium

Costs include the fees of professional advisors and some documentary duties. A notary's fee is payable by the buyer on the transfer value of real estate at rates ranging from 0.057 percent to 4.46 percent. These fees are subject to VAT (at a rate of 21 percent).

Bosnia-Herzegovina

Bosnia-Herzegovina

Court registration fees for registering the change of ownership are payable by the buyer and form part of the income of the relevant cantonal government.

Canada

Canada

Generally, no other statutory costs or charges are payable on completion of a purchase of real estate.

China

China

Other fees and charges such as registration fees, transaction handling fees, etc will be charged by the real estate registry. The types and rates of such fees vary from location to location but are generally nominal. The seller and purchaser will agree on which party will pay them.

Croatia

Croatia

There is a land registry fee for the registration of a transfer of ownership amounting to HRK 250 as well as fees for the public notary and other advisors. Registration fees are payable by the person applying for registration, usually the buyer. Purchase agreements normally stipulate that the notary's fees are met by the buyer.

Czech Republic

Czech Republic

  • Registration to the Cadastral Register is required for the acquisition of real estate ownership to be perfected (in addition to the contract for the real estate transfer). In general, there are several steps which need to be taken: a contract for real estate transfer with notarized signatures must be prepared; then there is a notarial fee for the attestation of a signature amounting to CZK30; then an application for registration of the transfer at the Land Registry must be submitted at an appropriate Cadastral Office (an administrative charge of around CZK1,000 applies)
  • Valuation of the property (the fee varies according to the kind of real estate being valued)
Denmark

Denmark

The fee for the registration of a title document is DKK1,660 plus 0.6 percent of the purchase price or the public land assessment, whichever is higher. With effect from 1 January 2020 the registration fee is only calculated based on the purchase price. Unless agreed otherwise between the parties, the registration fee is paid by the buyer.

France

France

Costs relating to the transfer of land are normally paid by the buyer, unless otherwise agreed. However, the seller is jointly liable for the payment of these costs.

Germany

Germany

There are fees for the necessary changes to the land register (registration of a priority notice of conveyance, a change of ownership and potentially land charges). The person who applies for the changes to be made is responsible for paying these costs, so both the seller and the buyer are usually responsible jointly.

Most purchase agreements provide for the buyer to bear the costs. The fees are payable to the local court where the land register is kept.

Hong Kong

Hong Kong

Real estate agents' commission

If there is a real estate agent involved, then a commission will need to be paid to him/her. The normal commercial practice is for both the purchaser and vendor to pay 1% of the purchase price each. However, in the event that parties do not feel it is necessary to use a real estate agent, it is possible to carry out the transaction without one.  

Solicitors' fees

Solicitors may be involved in the transaction for the purposes of checking title, preparing the relevant legal documents etc. As such, aside from limited circumstances provided in the Hong Kong Solicitors' Guide to Professional Conduct, the parties will need to be separately represented and therefore each will usually incur legal costs for engaging their own respective solicitors.

Hungary

Hungary

A service fee is payable to the land registry office. Legal and notarial fees may also be incurred. Such additional costs are usually borne by the buyer unless otherwise agreed.

Any costs incurred in connection with the discharge of existing encumbrances are paid by the seller.
 

Ireland

Ireland

Direct investment

Costs include advisors' fees. Each party pays their own advisors' fees.

The incidental costs of acquisition may be deductible when calculating any gain or loss on the disposal of the property. Such fees must be incurred wholly and exclusively for the purpose of the acquisition of the asset, and must fall into one or other of the following categories:

  • Fees, commission, or remuneration for the professional services of any:
    • Surveyor
    • Valuer
    • Auctioneer
    • Accountant
    • Agent
    • Legal advisor
    • Costs of transfer or conveyance
    • Cost of advertising to acquire the asset

Irish Limited Company

Costs include advisors' fees and compliance expenses (eg for the statutory audit of the company or the completion of accounting and tax returns). Each party pays their own advisors' fees.

The incidental costs of acquisition may be deductible when calculating any gain or loss on the disposal of the property. Such fees must be incurred wholly and exclusively for the purpose of the acquisition of the asset, and must fall into one or other of the following categories:

  • Fees, commission, or remuneration for the professional services of any:
    • Surveyor
    • Valuer
    • Auctioneer
    • Accountant
    • Agent
    • Legal advisor
    • Costs of transfer or conveyance
    • Cost of advertising to acquire the asset
Italy

Italy

In addition to the relevant taxes, costs include the fees of professional advisers and notary's fees. Notary's fees are mostly set by law and are related to the value of the transaction within a maximum and minimum range.

The buyer normally pays the notary's fees, while professional advisers are paid by the instructing party.

Japan

Japan

  • Brokerage fee – A brokerage fee (3% of the transaction price is customary) is often paid to real estate agents in practice.  This is payable by a seller/purchaser who retains a broker.
  • Utilities costs, fixed assets tax and city planning tax – Utilities costs are usually charged every month, and fixed assets tax and city planning tax are charged yearly.  Normally both seller/purchaser allocate these costs in accordance with the timing of the transaction (ie the year/month of the transaction).
  • Registration agent fee – Registration of an acquisition is handled by a judicial notary (Shihoshoshi) in Japan, and the fee for this agent must be taken into account.  Normally a purchaser bears the cost of these fees.
Netherlands

Netherlands

Notary's fees will be incurred but can usually be negotiated. Other costs include the fees of professional advisors.

Nigeria

Nigeria

A combination of land charges such as ground rents, tenement rates, Neighbourhood Improvement Charges, Business Premises permits apply to properties at different rates across Nigeria. The responsibility for these payments is on the owner and occupier of the premises and ought to be paid to Government before a transfer of the interests to the purchaser otherwise it becomes the responsibility of the purchaser or assignee to make the payment on any outstanding after transfer.

The Land Use Act requires that the Governor of State where the property is located shall give consent for a transfer of the interests to be valid. The Governor’s consent is subject to payment of official fees or taxes and other fixed costs including all applicable property taxes for the registration of the transfer. The purchaser is responsible for ensuring that all required costs and taxes for consent and registration of the transfer interests are paid.

The fees for the Solicitors and other professional consultants including estate surveyors and agents also arise in transfer of property transactions.

The purchaser is usually responsible for the payment of the transaction costs and the taxes except where expressly agreed by the parties that the costs and taxes are to be shared by the parties.

Norway

Norway

These include the cost of advisors and costs relating to the setting-up of a company or holding company, if relevant. The seller is responsible for the broker’s fee, unless otherwise agreed by the parties.

Poland

Poland

In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), the purchase of real estate incurs the following costs:

  • The cost of preparing a notarial deed in the form of a purchase agreement (paid to the notary – the amount will depend on the value of the real estate, but cannot exceed PLN 10,000 usually paid by the buyer, although the parties may agree otherwise)
  • The cost of an excerpt from the land and mortgage register amounting to either PLN 30 or PLN 60 (or if the excerpt is obtained online: PLN 20 or PLN 50)
  • The fee for registration in the Land and Mortgage Register (PLN 200 – usually paid by the buyer)
  • Stamp duty – where a power of attorney is granted, stamp duty of PLN 17 must be paid to the relevant municipality.

Depending on the particular circumstances and the type of real estate, other costs may also be incurred (eg the cost of obtaining other documents required by the notary and the commission charged by the real estate agent).

In the case of a share deal (ie the purchase of shares in a corporate vehicle holding the real estate), costs include:

  • The notarial fee for certifying the signature under the share purchase agreement (SPA) amounting up to PLN 300 per signature
  • The court fee for registration of new shareholders in the National Court Register amounting to PLN 250
  • The fee for the announcement of the registration of new shareholders in the Court and Business Gazette amounting to PLN 100

In the case of the purchase of an interest in a partnership, costs include:

  • The court fee for the registration of new partners in the National Court Register amounting to PLN 250
  • The fee for the announcement of the registration of new partners in the Court and Business Gazette amounting to PLN 100
Portugal

Portugal

In Portugal, the transfer of real estate requires the payment of notary's fees, if the transfer was executed through public deed and also registration fees regarding the registry of the acquisition before the relevant Land Registry Office. In general, the acquirer pays these transaction costs.

Romania

Romania

Notary's fee

All agreements for the transfer of ownership or other real rights over real estate must be notarized in order to be valid, and the notary's fees can be quite significant. For example, for transactions larger than RON 600,001, a notarial fee of 5,080 RON and 0.44% of the transaction value exceeding RON 600,001 is due.

The notary's fee is paid by the purchaser unless otherwise agreed between the parties.

Registration fee

Real estate related rights need to be registered for enforceability purposes. The Land Registry will charge a fee for any type of registration, depending on the particular characteristics of the transaction (i.e. sale and purchase, lease, right of use, etc). In the case of sale and purchase agreements, the registration of the transfer is subject to a fee of 0.5 percent for registration of the right in favour of a legal entity or 0.15 percent for registration of the right in favour of a natural person applied to the value of the immovable property which was transferred as indicated in the sale agreement.

The registration fee is paid by the purchaser unless otherwise agreed between the parties.

Russia

Russia

In the event of a direct acquisition of real estate, stamp duty is levied on the registration of the title transfer.

The amount of stamp duty for legal entities is RUB22,000.

In the event of an indirect acquisition of real estate (through a 'share deal'), the relevant transactional costs/charges will depend on the type of legal entity being purchased. These may include, for instance:

  • Stamp duties
  • Notary's fees for certifying the sales agreement (in the case of an LLC)
  • Independent registrar's fees for registering the change in the company's shareholders registry (in the case of a joint-stock company)

Generally these costs are shared equally between the seller and the buyer unless the parties agree otherwise.

Slovak Republic

Slovak Republic

There is a fee of €66 for the registration of the new owner in the Land Register (€33 for registration by electronic means). This fee rises to €266 if the applicant applies for an accelerated registration which is then carried out within 15 days (€133 for registration by electronic means). In addition, all of these fees are reduced by €15 if a notice of an intended registration is filed. The notarial fee for the verification of a signature varies according to the notary and is in the range of €1.50 to €3.50. Responsibility for paying these costs depends on what the parties have agreed.

Spain

Spain

Asset deal

Costs include the notary's fees, the property registration fee (when buying real estate) and any fees for professional advisors.

Stamp duty is payable on the creation of a mortgage securing a loan at the rate ranging from 0.5 percent to 1.5 percent of the guaranteed debt.

The notary's fees are determined by law and payable by the seller. Fees for the first and subsequent copies of notarial documents are payable by the buyer, unless otherwise agreed by the parties.

The registration fees are payable by the buyer.

In the case of the purchase of a newly constructed or fully refurbished hotel, the seller must obtain a licence to open from the tourism board of the relevant regional government before the hotel can start to operate. There is also a fee for this service.

Share deal

Costs include the notary's fees and fees for professional advisors. The notary's fees are determined by law and payable by the seller. Fees for the first and subsequent copies of notarial documents are payable by the buyer, unless otherwise agreed by the parties.

Sweden

Sweden

Estate agents work on a commission basis which generally varies between 0.5 percent and 5 percent of the purchase price, depending on the property and size of transaction. Additional costs include any legal, financial, commercial and technical investigations. The seller normally pays the estate agent. All other costs are generally paid by whichever party instructed the advisers concerned.

Thailand

Thailand

There are none.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

These could include:

  • Registration dues, such as:
    • Sale and purchase - the seller and purchaser are required to pay registration dues at a rate of between 1% and 4% of the value of the property (typically split equally between the parties). In respect of transfers of off-plan real estate units, the fee is capped at AED 2 million per transaction.
    • Mortgage – one per thousand (ie 0.001%) of the mortgage value and in relation to:
      • Off-plan real estate units or real estate assets subject to Law No. 3 of 2015 (Strata Law) - up to a maximum limit of AED 2 million per transaction
      • All other assets - up to a maximum limit of AED 1 million per transaction

These are payable to the Land Registration Department of the Abu Dhabi Municipality.

  • Agents' fees as per their terms of business
  • Surveyors' fees for carrying out due diligence
  • Lawyers' fees for carrying out due diligence
  • Utility connection fees and such like
United Arab Emirates - Dubai

United Arab Emirates - Dubai

Such fees could include:

  • Sale and purchase registration fees: a fee of 4% of the purchase price applies to the registration of a purchase/transfer of land. The buyer and seller are required to share such 4 percent fee equally. Often, the parties agree otherwise, with the buyer paying the full 4 percent fee to the Dubai Land Department (DLD)
  • Mortgage registration fees: 0.25% of the mortgage value up to a maximum of AED 1,500,000 is payable to the DLD
  • Long-term lease contract: 4% of the total value of the rent contract is payable to the DLD
  • Usufruct: 4% of the total property value is payable to the DLD
  • Musataha: (a right to use and exploit land belonging to another person, along with the right to build on that land); 1% of the musataha contract value is payable to the DLD

    Note that the fees payable to the DLD are subject to amendment at any time and care should be taken at the start of a transaction to confirm what fees will be payable and how such fees will be
  • Agents' fees, as per their terms of business
  • Surveyors' fees for carrying out due diligence
  • Lawyers' fees for carrying out legal due diligence and drafting/negotiating the relevant documents; and
  • Utilities (connection fees and associated costs)
UK - England and Wales UK - England and Wales

UK - England and Wales

Other costs include the fees of professional advisors (eg surveyors, lawyers, accountants, capital allowances consultants).

Where the buyer acquires an interest in the real estate it is usual, and usually a condition of any third-party financing, for certain searches and due diligence to be undertaken, for example:

  • Land registry searches
  • Environmental searches and surveys
  • Local authority searches
  • There may be searches that need to be done which are specific to the locality of the property (eg brine searches or mining searches)

Also, where real estate is acquired, this must be registered with the Land Registry and relatively small fees apply depending on the value of the property interest acquired.

UK - Scotland

UK - Scotland

Other costs include the fees of professional advisors (eg surveyors, lawyers, accountants, capital allowances consultants).

Where the buyer acquires an interest in the real estate it is usual, and usually a condition of any third party financing, for certain searches and due diligence to be undertaken, for example:

  • Land register searches
  • Environmental searches and surveys
  • Local authority searches
  • There may be searches that need to be done which are specific to the locality of the property (eg coal reports or mining searches)

Also, where real estate is acquired, this must be registered at the Land Register, and relatively small fees apply depending on the value of the property interest acquired.

Ukraine

Ukraine

In the case of a direct purchase of real estate, notary's fees, state duty and pension fund duty are normally payable.

Pension fund duty is paid by the purchaser of real estate at 1 percent of real estate value (excluding VAT) indicated in the sale and purchase agreement. Pension fund duty is not payable on the purchase of plots of land.

State duty, also applies, at 1 percent of the contractual value of the real estate being transferred. The notary's fees are divided between the parties subject to their agreement.

When real estate is acquired via the purchase of shares in the entity holding the asset, a token amount of state duty is paid to the registrar for registering changes to the statutory documents. In addition, in the case of a joint stock company, fees are payable to the company's registrar for entering the relevant record in the shareholders' register, if this is maintained by an independent entity.

United States

United States

Many states and localities impose costs and fees (in addition to taxes) for recording and filing deeds, mortgages, and other documents in the land records.

Other costs typically include the cost of obtaining title insurance, escrow fees, and fees for professional advisors.

Zimbabwe

Zimbabwe

Stamp duty is payable by the purchaser at a sliding scale rate of between 1 percent to 4 percent of the purchase price.

The transfer to title fees payable by the purchaser are determined by the Law Society of Zimbabwe at a fixed tariff and are payable at a sliding scale rate of between 1 percent to 4 percent of the purchase price. The purchaser pays transfer fees unless otherwise agreed by the parties.

In a case of new land development, deduction fees are payable to the Surveyor General’s office and are calculated according to size of the land.

City Council rates/bills also have to be cleared before a transfer can be processed and are charged three months in advance.

Trading licences must also be paid in cases where business will be carried out.

Other fees for professional advisors eg accountants or land inspectors.