11/01/2025
Frequently asked questions when buying land. Who pays for the survey, tax and title transferโ๏ธ
Answer When buying land, it's important to have a clear understanding of who will be responsible for expenses such as survey, taxes, and title transfer. Here's what you need to know:
1. Survey Fee- A survey fee is usually the buyer's responsibility, especially if you want to ensure accurate land size and boundaries. This is important to avoid future disputes and to make sure the land you are buying is correct. This can also be negotiated with seller if the cost can be split, depending on the agreement.
2. Capital Gains Tax- This should be paid by the seller as this is the tax on their income from the sale of the land. Its rate is 6% of the selling price, zonal value, or fair market valueโwhichever is higher. Must check that seller will pay this before transferring title to your name.
3. Documentary Stamp Tax- Typically the buyer pays it and it's 1.5% of the selling price, zonal value, or fair market valueโwhichever is higher.
4. Transfer Tax- This is also the answer of the buyer but the seller is also okay and the value depends on each locality, but usually at 0.5% of the selling price, zonal value, or fair market value.
5. Registration Fee- This is paid to the Registry of Deeds to transfer the title to your name, and this is also typically a buyer's reply. Its amount depends on the property value.
Solution:
Communicate well with the seller and put in agreement or contract who will pay the mentioned fees. It's important that this is clear before signing the Deed of Sale to avoid any misunderstanding or problems in the future. Don't forget to consult with an attorney or licensed real estate broker to guide you through the proper process and avoid any legal complications in buying land.
