Financing a Property Purchase

As a foreign resident, a wide range of options is open to you when it comes to the financing of your property purchase. Should you require a mortgage, this can be arranged through banks in your home country as well as
locally, so it is up to you to choose the solution that is most beneficial to your personal situation.

It is in such matters, as well as finding the most tax-efficient form of purchase and advising you on maintenance costs and inheritance issues, that a good lawyer will prove his value many times over. He will also be able to give you detailed advice about the taxes and rates levied on property transactions and homeowners, which are briefly summarised below:

• Fees and taxes
  Generally speaking, the costs attached to the purchase of a property are around 10% of the purchase price and 12% if you are using a mortgage.
  
  · Notary & Registry Fees:
  Usually paid for by the buyer and related to the purchase price.
  
  · Purchase Taxes:
  In the case of newly completed homes the applicable tax is VAT (Value Added Tax), which is levied at 7% for homes and 16% for storage and parking, when bought separately from a house or apartment and accompanied by a stamp duty of 1%.
  
  In the case that you buy an existing home from another private owner, the relevant Transfer Tax stands at 7% of the purchase price and the 1% Stamp Duty will NOT be due.
  
  If you decide to use a mortgage, please bear in mind that it will be contained in a separate title. This means that you will have pay a set of notary & registry fees, as well as 1% Stamp Duty on the borrowing of money.
  
  · Legal Fees:
  These vary between 1% and 2% of the purchase price and include the full set of legal services, from the moment you find the home to the point at which title is transferred into your name .