Fees involved in apartment transactions is always a topic of interest to many people when planning to buy or sell an apartment. Paying taxes and fees in full will ensure the legality of the transaction and at the same time help the transfer process take place more quickly. So what are fees involved in apartment transactions? Let’s find out with Tuong Phat Land!
1. A summary of all fees involved in apartment transactions with a ownership certificate
When buying and selling an apartment, in addition to negotiating a reasonable price for both parties, the buyer and seller also need to pay some mandatory fees. So, what are the types of taxes and fees and are the fees high when the apartment has a pink book? If you don’t understand this information, you may encounter some legal risks, so do not ignore the information below!
1.1. Personal income tax
According to Clause 5, Article 3 of the Law on Personal Income Tax 2007, amended by Law No. 26/2012/QH13, income from the transfer of ownership or use of housing must be subject to personal income tax. Specifically, the tax calculation is: Personal Income Tax = Transfer price x 2%. This tax rate is fixed and is currently applied to all real estate transactions, except for some special exemptions.
Explaining this formula, Tuong Phat Land clarified that the transfer price is the actual price agreed upon by the two parties and recorded on the apartment sale and purchase contract and is the price used to determine tax fees. Personal income tax is the responsibility of the seller, for example, you sell an apartment for 5 billion VND, so the amount you need to pay is: 5,000,000,000 x 2% = 100,000,000 VND.
1.2. Registration fee
Apartment buyers must pay a registration fee to complete the registration procedure. This fee is not exempted and is calculated based on the property value announced by the provincial/municipal People’s Committee. Understanding the fees involved in apartment transactions, especially the registration fee, helps home buyers be more financially proactive, buy faster and avoid unnecessary risks.
Who pays this fee can differ depending on the negotiation between the buyer and the seller. According to Tuong Phat Land‘s research, there are two forms for buyers to pay this fee:
- The transfer price of the apartment is higher than the price set by the People’s Committee: Registration fee = 0.5% x Transfer price. For example, 2 billion x 0.5% = 10 million VND.
- The transfer price of the apartment is lower than the price set by the People’s Committee: Registration fee = 0.5% x (Area x Price of the People’s Committee/1m2 x % of the remaining quality of the apartment). For example, you buy an apartment with an area of 70m², the price set by the People’s Committee is 25 million VND/m², a newly built house with the remaining quality is 100%. We have, registration fee = 0.5% × (70 × 25,000,000 × 100%) = 0.5% × 1,750,000,000 = 8,750,000 VND.
1.3. Other legal fees
In addition, sellers and buyers also need to pay some fees involved in apartment transactions related to legal matters such as notary fees, file appraisal fees, pink book transfer fees,…
- Notarization of the contract: To have the contract notarized, you need to do it at a notary office, this fee is not biased towards either party but the person responsible will be agreed upon by both parties. This fee usually fluctuates between 0.1% – 0.5% of the value of the apartment. The final amount depends on the apartment’s price and must be clearly stated in the sales agreement to avoid disputes.
- Document appraisal: After completing the notarization process, the next fee involved in apartment transactions is the document appraisal fee. Because the Provincial People’s Council is the agency that regulates this fee, there cannot be a specific number, on average it will fluctuate between 500,000 VND – 5,000,000 VND.
See more: Is condotel eligible for a land use right certificate?
2. Fees to pay when buying and selling an apartment without a ownership certificate
If you are preparing to trade an apartment without a pink book, buyers and sellers should clearly understand the information about the fees involved in apartment transactions. Accordingly, personal income tax is a tax that must be paid whether the apartment has a red book or not and the fee is still calculated at 2% according to current regulations. Some cases where you are exempt from tax are selling the house to a relative, the apartment is the sole owner or is facing difficulties due to natural disasters, illness,…
That is the fee involved in apartment transactions, so what about the case of giving the apartment to someone else? If the recipient is a relative of the homeowner (wife, husband, father, mother, children,…), then there is no need to pay personal income tax. If the recipient is not a relative, they must pay 10% of the apartment value according to the provisions of Decree 65/2013/ND-CP. For example, if you receive an apartment worth 3 billion VND, you must pay 300,000,000 VND (3 billion x 10%).
In addition, according to information collected by Tuong Phat Land, some fees involved in apartment transactions in the case of not having a certificate are land registration fees, contract notarization fees,… You should note that taxes and fees also depend on local regulations and the value of the apartment at the time of the transaction, so careful research is essential.
Understanding the types of fees involved in apartment transactions not only helps you take control of your finances, but also helps you avoid unwanted problems and ensure legal transactions. If you are planning to buy or sell an apartment, you need to carefully research this issue. If you have any questions, please contact Tuong Phat Land immediately for advice!
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