ᐅ Property Sale – Separating Fixtures and Fittings from the Residence?
Created on: 17 Jun 2020 21:18
T
Tarnari
Hello everyone,
First of all, I wasn’t sure which section of the forum to post this in, as to my knowledge there isn’t one specifically for discussing not only purchase questions but also questions about selling.
Background:
We are going to sell our current single-family home.
A potential buyer has been found.
In addition to the kitchen, there are several high-quality built-ins, lighting fixtures, etc., that the buyer also wants to purchase.
The buyer is offering amount X. We agree with this amount and want to finalize the deal.
Now, understandably, the buyer wants to reduce the property transfer tax by excluding the movable inventory from the purchase price of the property and handling it through a second, separate sales contract.
From our point of view, this isn’t necessarily required because the inventory can be itemized with costs within the main purchase contract, and the buyer would then only pay tax on the total property price minus the inventory.
We suspect that the buyer is concerned, on the one hand, that including the movable inventory in the purchase agreement will increase the notary fees payable by them, and on the other hand, that the tax office might later question the price assigned to the inventory, which could have a negative outcome for the buyer.
This is all understandable.
The question we have:
Assuming we agree to carry out a property sale with the offer amount minus the inventory and sell the inventory separately under a second contract for the remaining amount…
What consequences for us might this have that are not immediately obvious?
We have this worst-case scenario in mind where the buyer ends up with the house based on the valid notarized contract but doesn’t pay for the furniture, and in the worst case, we might have to go through a civil court dispute to recover the money for the furniture.
I hope I was able to explain the situation clearly enough.
First of all, I wasn’t sure which section of the forum to post this in, as to my knowledge there isn’t one specifically for discussing not only purchase questions but also questions about selling.
Background:
We are going to sell our current single-family home.
A potential buyer has been found.
In addition to the kitchen, there are several high-quality built-ins, lighting fixtures, etc., that the buyer also wants to purchase.
The buyer is offering amount X. We agree with this amount and want to finalize the deal.
Now, understandably, the buyer wants to reduce the property transfer tax by excluding the movable inventory from the purchase price of the property and handling it through a second, separate sales contract.
From our point of view, this isn’t necessarily required because the inventory can be itemized with costs within the main purchase contract, and the buyer would then only pay tax on the total property price minus the inventory.
We suspect that the buyer is concerned, on the one hand, that including the movable inventory in the purchase agreement will increase the notary fees payable by them, and on the other hand, that the tax office might later question the price assigned to the inventory, which could have a negative outcome for the buyer.
This is all understandable.
The question we have:
Assuming we agree to carry out a property sale with the offer amount minus the inventory and sell the inventory separately under a second contract for the remaining amount…
What consequences for us might this have that are not immediately obvious?
We have this worst-case scenario in mind where the buyer ends up with the house based on the valid notarized contract but doesn’t pay for the furniture, and in the worst case, we might have to go through a civil court dispute to recover the money for the furniture.
I hope I was able to explain the situation clearly enough.
Tarnari schrieb:
We are talking about a mid five-figure amount and a buyer who is being taken advantage of.
We would prefer not to handle this with just a “handshake.”
Is it possible, for example, to include the payment for the inventory in a second contract within the notarized agreement, without affecting the buyer’s taxes and notary fees? As I said before: sub-items, itemized lists, etc., are common practice. You are not the only ones who have something to sell!
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nordanney18 Jun 2020 10:09Oetti schrieb:
This is how my previous post was meant to be understood.Then we share the same understanding
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nordanney18 Jun 2020 10:32Tarnari schrieb:
Well, we decided yesterday to add up what he wants to charge.Go ahead and do that. Inventory is usually worth only a fraction of the original price. Kitchen fittings lose value drastically, furniture (except maybe antiques) also depreciates significantly, even if they are from expensive brands.
But you all agree on the prices for the fixtures, right? What is true is that the share of the purchase price is just one aspect! If the purchase price of the condominium excluding the fixtures is still in line with the market, then everything is fine.
However, if he wants to separate it, then a corresponding agreement should be made, and he basically has to pay for the fixtures before signing. Whether it makes sense to involve the notary with an escrow account could be considered.
However, if he wants to separate it, then a corresponding agreement should be made, and he basically has to pay for the fixtures before signing. Whether it makes sense to involve the notary with an escrow account could be considered.