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.
H
HilfeHilfe18 Jun 2020 06:34Why the stress? He is willing to pay. Just ask for payment in advance for the furniture. What amount is it about?
As many have already said, this is standard practice! But yes, he wants to exclude it to save on notary fees. The exact amount if the inventory is included would need to be clarified. Otherwise, you could agree on something to account for that amount or something similar. From a tax law perspective, it only becomes relevant if the inventory portion is very high. Then it might be questioned, since it does sometimes happen that this is done solely to save on property transfer tax.
N
nordanney18 Jun 2020 07:43cschiko schrieb:
But yes, he wants to remove it to save on notary fees. The exact amount if the inventory remains inside would need to be clarified. With a mid five-digit amount, we are talking about costs of 75-100€ (approximately $80-$110). So he is practically not saving anything in relation to the total costs.
Then I would simply offer to reduce the inventory cost by €100 (about $110) and put it into a contract, and that would be it! The only issue might be the mid five-figure amount for him, which could be the reason to handle it externally, as the tax authorities might inquire about it.
A
Alessandro18 Jun 2020 07:53nordanney schrieb:
For a mid five-figure amount, we’re talking about costs of 75-100€ (90-120 USD). So, he basically doesn’t save anything in relation to the total costs.I was just about to say the same!
That’s really ridiculous and not worth the effort at all. I’d tell the buyer to get lost if he’s making such a fuss over 100,-.