SELLING YOUR PROPERTY
The business of selling a property entails a combination of events and procedures that although may appear simple to the inexperienced, in reality are somewhat more complex.
The purpose of this document is to serve as a quick guide to help you, as the potential client, looking at selling your property. Our aim is to explain better these procedures, what is effectively the role of an estate agency and more specifically what to expect from RE/MAX Professionals:
• Valid and realistic evaluation of your property, carried out in a timely manner at your convenience;
• Extensive marketing, local, but also overseas thanks to the Agency’s global networking;
• Proficient, but at the same time friendly, assistance from our learn of trained associates;
• Easy access to advice from a host of selected professional people having a close liaison with the agency;
• 24/7 promotion via our completely restructured and constantly updated website;
• Benefits from the agency’s worldwide recognition of the brand name;
• Assistance to the buyer of your property throughout the period of Konvenju (Preliminary Agreement) right through to the time when the sale is closed.
Tax on Sale of Property
Important Information / Disclaimer:
Whilst every case must be taken under its own merits the following could be taken as a general guide line. Specific advice should always be sought in each case (even) through our agency but ideally directly from one’s own personal accountant or tax advisor.
Capital Gains Tax / Final Withholding Tax
Exemption Clause:
In the case where the seller has owned the property as his/her primary residence for more than three years and it is being sold within 12 months from when it was vacated, there will be no tax to pay whatsoever. This exemption is granted by the Department of Inland Revenue upon application prior to the signing of the Final Deed of Sale.
In all other cases the following Tax Regime will apply:
At the time of signing of the Final Deed of Sale, provided the property in question has been in the ownership of the seller for not more than five years, seller is given two options from which to choose, based on whatever may be the most beneficial to the seller at the time. Once the period of five years of ownership of the property has been exceeded the possibility of choosing is lost and the applicable tax will be that of Final Withholding Tax as defined in ‘a’ below.
a) Final Withholding Tax:
Calculated on the selling price of the immoveable property as declared on the Final Deed of Sale (Contract of Sale) less Agency Fees (if any, paid and up to the allowed maximum of 5% plus VAT) balance subject to 12% tax as final and non revisable.
or
b) Capital Gains Tax:
Subject to the ‘Exemption Clause’ above this tax when applicable will be calculated at the current Tax Rate (maximum 35% at time of print).
The way this works out in practice is as follows:
A provisional tax amounting to 7% of the total selling price will be deposited with the Notary Public to be passed on to the Commissioner of the Inland Revenue.
For the sake of being complete the immovable property can also include:
• A garage attached to or underlying the property being sold, even in cases where the property forms part of a block of flats;
• A garage of not more than 30 square meters, not attached but situated within 500 meters of the residential property and transferred through the same deed.
As mentioned above the tax being paid at this time by the vendor is only a provisional tax. The definite amount due is calculated by computing the capital gains less a series of expenses sustained at the time of purchase as well as maintenance and inflation allowance, brokerage fees (limited to 5% + VAT of the selling price) and other eligible costs sustained during the time of ownership of the property in question. This sum is then added to all other incomes of the vendor for the current year and the income tax for that year is worked out. Additional payments / refunds, as applicable, are to be settled at this stage.
Needless to say, this calculation is highly intricate but RE/MAX can offer their assistance should it be required.
Agency Fees
Estate Agency Fees — Payable only once the sale is concluded: 3.5% of the total selling price in the case where the seller has chosen RE/MAX to be the Sole Agency promoting the sale of the property , or 5% in case of an open agency.
In Conclusion
When selling a property you have taken the firm decision to do so and as such would want to see the transaction concluded smoothly and in the shortest time possible.
At RE/MAX Professionals we take our business seriously, always keeping in touch with what the market has to offer as well as its demands. This procedure gives us the confidence to help you achieve your expectations favourably and within reasonable times in whichever current market conditions.
