LAW OFFICE BELGRADE FOR REAL PROPERTY (REAL ESTATE) – HOW THE FOREIGNERS CAN BUY REAL PROPERTY (REAL ESTATE) IN SERBIAIvan
Is it allowed to foreigners to buy a real property in the Republic of Serbia?
If the answer is positive – under which curcumstances the foreigners can do it?
In next lines our Law office Belgrade for real property will analyze all relevants issues from this domain.
According to Serbian laws there are two different regimes of buying real property by foreigners and foreign entities.
Firstly, a foreign company can buy a real property in the Republic of Serbia which are necessary for their business activity, under the condition of reciprocity. The foreign company is allowed to buy land, appartment building or appartment but not agriculture land. As you can see the foreign company is allowed to buy a real property under two conditions: 1) buying a real property in purpose of business activity – the confirmation that company realizes this condition will be provided before Ministry of Trade; 2) reciprocity – the confirmation that company realizes this condition will be provided before Ministry of Justice.
The term of reciprocity means that Serbian company is allowed to buy a real property in foreign country under the same, or not more difficult curcumstances. The reciprocity can be provided by bylateral international agreement, laws and court`s practice. There are many countries which have the reciprocity with Republic of Serbia in this domain: United States, United Kingdom, Japan, Netherland, Australia, Argentina, Austria, Belgium, Brazil, Kanada, Germany…….
On other hand, the foreigners is allowed to buy appartment and appartment buildings in Serbia under the condition of reciprocity. By the way, the ownership of a real property is legal grounds for temporary residence permit in the Republic of Serbia.
The process of the buying a real property in Serbia by foreign company or foreigners is the same as in the case of Serbian company or Serbian citizens. Our Law office Belgrade for real property will discribe you whole steps in that process.
THE FIRST STEP – THE CHOICE OF A REAL PROPERTY AND ANALYSING DOCUMENTS
Before of all others things, you should choose a real property in accordancy with your wishes and finance. When a real property be shosen, our Law office Belgrade for real property will analyse and check all documents which are relevant for buying a real property. We will specialy pay attention on two points. Firstly, is a real property registred in the Cadastral register of the Republic of Serbia, as well is a real property registered in title of a potential seller. Second, are there any liens which is registered on a real property in the Cadastral register as mortgage, easement etc. If the real property is registered on title of a potential seller in the Cadastral register of the Republic of Serbia, we can pass on the second step.
THE SECOND STEP – DRAFTING THE PURCHASE AGREEMENT
The transfer of a real property in the Republic of Serbia is provided in the form of the purchase agreement. The purchase agreement is formal contract which should be made in written form. There are two essential terms of purchase agreement: the subject metter (real property) and the purchase price. Our Law office Belgrade for real property has high practical experience in domain of drafting the purchase agreement.
In some situations, when parties haven`t possibility to make the purchase agreement they can make the pre-purchase agreement. The reason for this can be situation if potential buyer don`t have enough money for paying the purchase price in that moment but expect it in future – for example – to borrow money from bank. Also, the reason can be related to legal status of a real property – for example – registered a mortgage which should be deleted soon. Under the pre-purchase agreement the potential buyer has a obligation to pay some amount of money as deposit (oftenly 10% of purchase price), as guarantee that he is interested in buying a real property. The main legal consequence of making the pre-purchase agreement is obligation for both parties to make the purchase agreement after specified period of time.
THE THIRD STEP – FORMING THE PURCHASE AGREEMENT
The purchase agreement forms before a public notary. It means that the draft of purchase agreement should be notarized by the public notary. Notarization of the purchase agreement is provided by the competent public notary, who has jurisdiction on area where a real property is situated. The seller and the buyer should be present before the public notary and sign the purchase agreement. The buyer confirms that accept seller`s offer by the act of signing the purchase agreement.
The public notary will inform parties about all relevant legal consequences of forming the purchase agreement. The parties should pay fee for the notarization of the purchase agreement which depends of monetary value of a real property. Our Law office Belgrade for real property can schedule a meeting for forming the purchase agreement before the public notary.
THE FOURTH STEP – REGISTRATION A TITLE BEFORE THE CADASTRAL REGISTER
According to the Serbian laws, if buyer of real property wants to acquire ownership he should register his title of a real property before the Cadastral register of the Republic of Serbia. This application will be submitted by public notary after notarization of the purchase agreement.
The public notary should provides next documents releted to the application: 1) the purchase agreement in original version; 2) a clausula intabulandi – the authorization which is given from a seller to a buyer which authorizes a buyer to register a title of a real property before the cadastral register without his presence and assistance (clause of the purchase agreement or the statement); 3) the identity card of a buyer in photocopy version; 4) a proof of paid fees – about 5.000,oo RSD (45 euros).
The Cadastral register of Republic of Serbia shall make a decision within 15 days starting to day of submitting the application. If the application be adopted by the Cadastral register of the Republic of Serbia a buyer will become officially a owner of a real property.
THE FIFTH STEP – PAYING A STAMP DUTY
After the solemnization of the purchase agreement before the public notary a seller has obligation to submit tax application for paying stamp duty (property transfer tax). This tax application should be submitted before competent organization unit of the Tax Administration. According to the Serbian laws, a debtor of paying the stamp duty is a seller but the parties from the purchase agreement can arrangement this obligation at the expense of a buyer. On other hand, if a buyer buys new real property directly from a investitor on this transfer investitor should pay a VAT tax which excludes payment of the stamp duty.
A seller should submit tax application of the stamp duty within 30 days starting to day of notarization of the purchase agreement. If the purchase agreement provides that a buyer shall pay stamp duty than a buyer will submit this tax application on behalf of a seller. The base for paying the stamp duty is the purchase price and the tax rate is 2,5%. The Tax Administration shall make a decision on the amount of the stamp duty within 60 days starting from the day of submitting the tax application. Our Law office Belgrade for real property provides you service of submitting tax application for paying the stamp duty.
If you are interested in this domain please contact our Law office Belgrade for real property.