If you’re thinking of sell or buy a home It is necessary to know that there are a series of obligations that arise from these transactions and that must be taken into account before making a final payment decision.
Among these obligations are notary and deed expenses, which applies both when buying and selling a property. Knowing how to calculate them is key to being prepared and knowing if you have the money available to make the payment.
(Also read: Government announces the changes that Mi Casa Ya will have: everything you need to know)
As explained by the Colombian startup Habi, notarial expenses are disbursements of money that are made according to the economic value of a certain legal act or business, in this case, the process of buying and selling a property. These costs are assumed by the different parties, depending on the type of procedure to be carried out.
In addition, with the formalization of the sale and purchase process, the deed expenses arrive. a Public deed It is a notarial document in which the agreements of the parties on an asset are recorded, in this case, the purchase of a property. To carry out this procedure, the buyer and seller of the property must go to a notary and pay the corresponding costs.
These costs are equal to 0.54 percent of the sale price of the property and are assumed equally between the buyer and the seller. Your payment is made at the Notary at the time of signing the deed.
Withholding Tax at Source
When you make the decision to sell a property, you must pay the withholding tax at source, which is the anticipated collection of income tax. This tax is paid when a person’s wealth increases during the year. So, when selling a property you will have to pay withholding tax, since you are receiving a payment for this business.
The withholding tax is 1 percent of the sale price of the property. This means that if a property is sold for 250 million pesos, 2.5 million pesos will have to be paid withholding at source.
(Also read: Housing subsidies: departments that will have more resources in 2023)
Promise of sale
A promise of sale is an agreement between the seller and the buyer in which both agree to make the sale and the acquisition of the property, and penalties are based in case of breaching the agreement.
Generally, the value of the promise of sale equals 10 percent of the value of the property. This value corresponds to the down payment of the contract, that is, the advance.
Additionally, it should be taken into account the collection made by a notary to authenticate a promise of sale, which may vary depending on the city.
charitable tax and registration
The charity tax are payments that have to be made to legalize that the property belongs to a person. Therefore, when buying a house, you must have a budget to make charity payments and get the certificate of tradition and freedom of the property.
Charity is a departmental tax for writing, in which the buyer must pay 1 percent of the sale value of the house.
Registration of real estate in Colombia
These correspond to the registration of the acts before the Public Instruments Registry office and represent the 1.67 percent of the sale value. So, if a house or apartment is sold for 250 million pesos, the buyer of the property must pay 4.17 million pesos.
Certificate of Tradition and Freedom
The Certificate of Tradition and Freedom corresponds to the history of ownership of a property and contains all the historical information since the property was broken for the first time at the Public Instruments Registry Office.
It is important consult the certificate of Tradition and Freedom before delivering money to make the purchase of a property, so you can be sure that you are negotiating with the legitimate owners of the property and avoid scams.