ᐅ Property Sale – Separating Fixtures and Fittings from the Residence?
Created on: 17 Jun 2020 21:18
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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.
S
Seven198418 Jun 2020 11:19Hello, normally the total purchase price is included in the notary contract and the amount for the inventory is listed separately to avoid property transfer tax on it. Of course, the notary still needs to be paid for this. Basically, I would list everything that is part of this contract’s context. If money is exchanged outside of the notary contract, it could result in a contract that is conditionally invalid, and if you say he is ripping you off...
In which part of the country is the apartment located? I also buy condominiums.
In which part of the country is the apartment located? I also buy condominiums.
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NatureSys18 Jun 2020 11:22Yes, you should especially avoid being taken advantage of by a buyer trying to exploit you, and handle everything thoroughly in a contract.
I find it highly problematic that you repeatedly receive legal advice based on dangerous half-knowledge.
Have the notary explain to you the consequences of making a second (including verbal) agreement (keyword “side agreements” – which are usually excluded in the sales contract).
Just my two cents.
Have the notary explain to you the consequences of making a second (including verbal) agreement (keyword “side agreements” – which are usually excluded in the sales contract).
Just my two cents.
cschiko schrieb:
You all agree on the prices for the inventory, right? Because one thing that is true is that the share of the purchase price is just one aspect! If the purchase price of the condominium minus the inventory is still in line with the market, then it’s fine.
But if he wants to separate it, then you should simply make an appropriate agreement and he basically has to pay for the inventory before signing. Whether you might involve the notary with an escrow account could be considered.We have already dealt with something like this.
aero2016 schrieb:
I find it extremely critical that you keep giving legal advice based on dangerous half-knowledge.
Have the notary explain the consequences of making a second contract (even verbally) (keyword “side agreements” – these are usually excluded in the purchase contract).
Just my two cents.And a notary absolutely must be involved, even if only to assess what is being planned.
Thank you very much for your feedback. At least now I know my concerns are justified.
Tarnari schrieb:
that my concerns are justified.That’s why everything should be included in the purchase contract, no separate contract needed, and that’s it... this answer is right on the first page.