# Property transfer



## Em2cv (Sep 14, 2014)

Hi, I inherited half a property in the Algarve 3 years ago, I am currently negotiating to 'buy' the other half of the property, which will involve them transferring their half to me. Does anyone have any idea of how much this process will cost? And what is involved? 
The property cannot be sold as it currently has no habitation licence, so it is a transfer of ownership we are looking at. The owners of the other half are expecting us to pay all the costs, which I fear could become expensive. Any advice greatly appreciated.


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## travelling-man (Jun 17, 2011)

You've got a number of variables here such as how much will the lawyer charge you, value of the property (as far as taxes etc go) and whether you're a resident or not so your original question is a bit like asking how long is a piece of string. 

Legal costs to buy a property in my area (central zone) is currently running around €400-600 but I wouldn't be in the least surprised if it's more in the Algarve and if you're a resident, you don't pay the ITT tax but will pay others...... and how much that'll be will depend on the value of the property. 

Better to choose a lawyer and then ask him what the total costs will be in your particular case.


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## canoeman (Mar 3, 2011)

The easiest and cheapest is a Deed of Gift the other party/ies can gift proportion or all their share to you 
Costs
Stamp Duty 0.8% of value
Calculated on gift value which can be no lower than the VPT (Taxable value figure used for IMI)
Escritura depends a bit on value 200-500€ Cheapest place to do is at Casa Pronta part of Conservatoria which includes reguired Registration of property with Conservatoria
Solicitor?

Them selling & you buying increases costs and as such not possible as no "habitation Licence" plus you'd also reguire a Energy Certificate

Why doesn't property have one or a pre 1951 Certificate if that applied? as without either it could create considerable issues for you, possibly better to share costs of legalizing

If other parties are Non Residents then they should check any personal tax issues in UK or elsewhere


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## Em2cv (Sep 14, 2014)

The original property was built pre 1951, but was extended in the 1990s, there begins a sad story of a dodgy architect and a corrupt council official, they spent a lot of money but ended up with no habitation licence. To legalise it is the ideal, but sharing the process with the other owners is not really an option, as it is going to be a long process, and the logistics of sharing the property are getting threadbare. Hence the plan was that we take on full ownership and take on the legalisation process ourselves. 
All a bit daunting, so we don't want to end up paying a fortune just to get ownership transferred.
We are non resident, as are the other owners, as to the value of the property, a difficult one given it's current issues, but we are putting a value of approx €65 000 on a half share ( large old farmhouse on a decent sized plot)


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## canoeman (Mar 3, 2011)

The pre 1951 bit should be relatively easy, depends on how the 90's extension affect it.

Without legality it doesn't really have a value as you or other inheritors can't sell at a market price,
the sensible course is to get the value as low as possible bearing in mind the VPT restriction, mainly because the get a retro "habitation licence" requires the building or the extensions to the current building regs so could be a very expensive proposition.

Whether your Residents or Non Residents it doesn't affect the transfer of ownership via "gift"
Your starting point for valuation is the figure used by Financas when you all inherited.
The IS is worked on the value of the "shares" being gifted to you x 0.8%, legally the IS bill is yours but if other "shareholder" prepared to pay or split costs great.
Solicitor and Escritura is likely to be more than IS


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## TonyJ1 (May 20, 2014)

I believe gift transfers besides Parents/Children/Grandchildren/Grandparents, is subject to 10% stamp duty. Might be an exemption in this case though. Best to check it up.

The other side of the coin on buying / transferring a property to own name at a low value, is that on a subsequent sale, it will be subject to capital gains tax (if there is a gain) - there maybe a sting in the tail.


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## Em2cv (Sep 14, 2014)

Thank you, we have a lot to think about. The extension is a second floor conversion of an existing loft/ storage area. It didn't alter the footprint of the original building, it has been indicated that it should be possible to legalise it, but it will cost circa € 15 000.
Our main problem is that the owners of the other half are convinced it has a much greater value than it realistically does!! I recall from the inheritance process that the predial value is fairly low, with it being a rural property.
Thank you for the info, which really helps, if we can organise a transfer of ownership without huge cost, we can deal with the rest over time. One final question, can we get any sort of property insurance, even though we don't have a habitation licence?


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## Em2cv (Sep 14, 2014)

Thank you TonyJ1, the 10% is manageable given the current value. I had considered the capital gains tax aspect, but do plan to keep it long term, so we will probably transfer it to our children at some point in the future. Given the time everything takes there, I just hope we live long enough to see it legalised!!


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## canoeman (Mar 3, 2011)

Be aware as Non Resident then CGT liability is 28% tax on 100% of any gain and no option to rollover.
Yes you have certain expenses you can offset but capital investment (improvements) can only be claimed for 5 years prior to sale.
Cheaper to Will than gift, they would have to pay IS on gift


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## Em2cv (Sep 14, 2014)

Thank you


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