| |
Realtors’ and lawyers’ fees in Venezuela and other property purchase costs
Transaction Costs
Fee / % / Who Pays?
Lawyer's Fees / 1.50% - 3.00% / buyer
Servicios Autonomos / 0.10% / buyer
Income Tax / 0.50% / buyer
Agent's Fees / 5.00% / seller
Municipal Solvency Certificate / 3.93% - 5.24% / seller
Certificate of Encumbrances / 2.1% - 2.6% / seller
Costs paid by buyer: 2.1% - 3.6%
Costs paid by seller: 11.03% - 12.84 %
Roundtrip transaction Costs: 13.13% - 16.4%
Property purchase process in Venezuela
Any foreigner can buy a property in Venezuela with just a valid passport, a tourist visa and a Registro de Información Fiscal (RIF) . The RIF is a fiscal identification for all persons, and can be obtained for free by request at any Tax Administration office or the Servicio Nacional Integrado de Aministración or through a lawyer. Foreigners may also buy indirectly, through local companies or through foreign companies.
When you have chosen a property, inform your real estate agent and apply formally with a written document (Informe de la documentación). Require the real estate agent to be present to assist in the negotiation and closing of the deal, including the mode of payment. The real estate agent should mediate in all negotiations between you, and the seller of the property.
It is best to negotiate with a seller through an “opción a compra” or “option to buy”, which legally “locks” both seller and buyer. The seller has to sell and you have to buy. It also “locks” the price. An “option a compra” usually requires a deposit of between 10% to 30% of the agreed selling price.
Buyers pay in advance all registration fees and legal expenses and the seller is obligated to deliver the property free of lien. A buyer is expected to pay in cash in advance in local currency from 1% – 3%, to handle everything up to and including closing.
After the final document has been signed, it is notarized by the notary public, and the buyer is now the legal owner, and the title or deed is handed over by the seller.
The Certificate of Encumbrances is not required by law but is usually practiced and requested by purchaser.
Fundamental Guidelines when buying a property in Venezuela by the Real Estate Chamber of Venezuela (Comisión de Intermediación y Asesoría Inmobiliaria de la Camara Inmobiliaria de Venezuela):
Financial Commission – If the deal is paid through credit, the buyer should see that the commission to the bank or other financial institution is cancelled.
Insurance – In the case of property acquisition through mortgage, there is a need for insurance against fire and earthquake. Insurance agencies normally charge a year in advance.
Lawyers’ fees – When the purchase of property is through organizations such as the Organization of Savings and Loan (Entidad de Ahorro y Préstamo), it should be noted that its fees on financial commission already includes the fee for “documento de venta”. When the purchase is through a Banco Hipotecario or “real estate mortgage bank”, insurance company, or any financial society, the amount of writing the compra-venta varies depending on the price of the real estate.
Registry fees – According to the Law of Public Registry, registry fees are based on the value of the real estate and is paid on a Planilla de Liquidación. The registry fees include stamps, photocopies, transfers and all these additional fees are paid in cash and are not given receipts.
Miscellaneous fees – Need to cancel other fees related to the compra-venta if it is in the contrato de opción as agreed by both parties. Read carefully everything before signing.
The whole process of registering a property in Venezuela can be completed in around 33 days.
Inheritance
There are gift and inheritance taxes (Impuesto sobre sucesiones, donaciones y demás ramos conexos) in Venezuela. The tax rates vary depending on the value of the inheritance and the relationship between the benefactor and the beneficiary.
The taxable inheritance is computed by deducting the following from the market value of the gross estate:
- Any debts owed by the deceased, including taxes (as duly substantiated by proper documents)
- Death, funeral, and related expenses
- Attorney’s fees incurred during the process of allocating the inheritance and assessing the tax liabilities; these fees are calculated on the value of the inheritance:
Attorney’s fees
Taxable Income, VEB (US$) / Fees
Up to 20,000 (US$9) / nil
20,000 – 50,000 (US$23) / 6% on band over US$9
50,000 – 200,000 (US$93) / 4% on band over US$23
200,000 – 500,000 (US$233) / 3% on band over US$93
Over 500,000 (US$233) / 2% on all inheritance over US$233
The inheritance tax is levied on the gross share of each recipient. The recipients are classified into different categories, depending on their relation with the deceased:
• Category I: spouse, direct ascendants, direct descendants, adopted child
• Category II: siblings, nephews, nieces
• Category III: uncles, aunts, first cousin
• Category IV: any other person
The taxation of residents in Venezuela is in tax units (Unitaria tributaria), which is an adjustment index. The tax bands are all in tax units, whose monetary value changes depending on the changes in the consumer price index.
Inheritance tax
Tax Rate for Different Categories
Taxable Inheritance in Tax Units (US$) / I / II / III / IV
I / II / III / IV
First 15 (US$235) / 1.0% / 2.5% / 6.0% / 10.0%
Next 50 (US$784) / 2.5% / 5.0% / 12.5% / 15.0%
Next 100 (US$1,567) / 5.0% / 10.0% / 20.0% / 25.0%
Next 250 (US$3,918) / 7.5% / 15.0% / 25.0% / 30.0%
Next 500 (US$7,835) / 10.0% / 20.0% / 30.0% / 35.0%
Next 1,000 (US$15,670) / 15.0% / 25.0% / 35.0% / 40.0%
Next 4,000 (US$62,680) / 20.0% / 30.0% / 40.0% / 45.0%
Over 5,915 (US$92,688) / 25.0% / 40.0% / 50.0% / 50.0%
Rebates at a maximum of VEB100,000 (US$47) are available for recipients whose combined value of taxable inheritance and net wealth does not exceed VEB500,000 (US$233) . A tax rebate of 20% is given to the deceased’s spouse and children under 21 years old, if the sum of their taxable inheritance and net wealth does not exceed VEB500,000 (US$233)
Venezuela, make your dream investment come true. |
|
