What are house transfer expenses at the Land Office?

What are house transfer expenses at the Land Office?

These are the expenses incurred at the land office on the day of house transfer. This includes not only the transfer fee or ownership transfer fee, but also several other items such as stamp duty, income tax, mortgage registration fees, etc. If you buy a house from a real estate developer, you may receive information about the transfer fees in advance. However, if you buy from an individual, you may not receive clear information about all the expenses and their amounts from the seller.

Therefore, buyers should research and calculate the house price plus transfer fees in advance to compare all costs before making a purchase and to prepare for the significant amount of money required for transfer fees.

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Who is responsible for house transfer expenses?

Many people wonder who is responsible for each part of the house transfer fees. There are cases where the buyer pays, the seller pays, or they share the costs. However, there is no rule specifying who pays which part of the transfer fee. It all depends on the agreement between the buyer and seller. Generally, the payments are divided as follows:

1. House Transfer Fee

This is calculated as 2% of the appraised value of the land including the building. Generally, this is a shared expense, with 1% each paid by the buyer and seller. However, there may be cases where the seller, who is an individual, does not reduce the house price. However, the seller may offer to pay all transfer fees, or other arrangements as agreed upon between buyer and seller, after verifying the appraised value from the Department of Treasury.

2. Specific Business Tax

Generally, this is an expense for the seller, calculated at a rate of 3.3% of the purchase price. The seller must have owned the house for no more than 5 years. If owned for more than 5 years, or if the name has been on the house registration for more than 1 year, the seller is exempt from the Specific Business Tax, but must pay stamp duty instead.

3. Stamp Duty

Generally, this is an expense for the seller, calculated at 0.5% of the purchase price, but not less than the appraised land value. If it is lower, the appraised land value is used for calculation. However, if the seller is subject to Specific Business Tax, stamp duty is not required.

4. Personal Income Tax

If the seller is an individual, they must pay this tax as they have income from the sale transaction. Personal income tax is calculated using a progressive or tiered system, and the amount of tax depends on the method of acquisition and the number of years of ownership. For example, if acquired through purchase and owned for a long time, the transfer tax will be higher.

This is based on the appraised value of the land and buildings from the Department of Land. Regardless of the actual purchase price:

5. Mortgage Registration Fee

This is 1% of the total loan amount and is an expense for homebuyers who take out a loan. If paying in cash, there is no mortgage registration fee.

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Thank you for the helpful information from DD Property.