PROCEDURE

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Payment of reservation deposit

• The reservation fee depends on the purchase price.

• The reservation fee takes the property off the market and sets the sale price.

If the sale goes through, the reservation fee is credited towards the purchase price.

Real Estate Due Diligence Check

It is recommended that due diligence is carried out before signing the sale agreement. The legal representative will search the LRO registers to establish that the seller is the rightful owner of the property and that there are no legal encumbrances on the title that could prevent the sale. In the case where the property is a plot of land, the legal representative can check and verify the applicable zoning, building capacity and permitted building density. For properties that do not yet have separate title deeds, the legal representative will check with the relevant authorities to see if there are any necessary planning and building permits. Where the seller is a company, the legal representative can conduct a mandatory search at the Companies House.

Negotiations and signing of the contract

• A sales contract is a private agreement between the Buyer and the Seller.

• Sales contracts are in English.

• Stamp Tax: Within 30 days of signing the sales contract, the buyer must pay the stamp tax on the value of the contract.

• After paying 30% of the purchase price, the Buyer may submit a sales contract to the District Cadastral Office.

Application for reduced VAT rate

Under EU law, all new properties are subject to the standard VAT rate of 19%. However, a reduced VAT rate of 5% applies to the purchase of a principal residence under certain conditions:

• Only individuals aged 18 years or over are eligible to apply.

• The property must be used as your primary and permanent residence for the next 10 years.

• The reduced VAT rate has not been previously used by the same person.

• The reduced VAT rate applies only to the first 130 m². The standard rate applies to the remaining square meters.

Transfer of ownership deed

The process of issuing separate title deeds for each unit in a development usually takes several years after construction is complete. The transfer of title deeds is made at the Cadastral Office, provided that the buyer has paid all arrears to the seller and paid any applicable transfer fees and government taxes.