5 things you must know after purchasing real estate

Five things you need to know after purchasing real estate in Serbia

You’ve signed a real estate purchase agreement, you paid the full purchase price, you also entered into possession of the real estate, but did you know that the purchase process is not over yet? In addition, there are a number of legal obligations that are directed at the buyer, and which need to be fulfilled after the purchase of real estate.

When does the process of buying and selling real estate end?

The procedure officially ends with the registration of the buyer as the new owner of the real estate in the real estate cadastre. In that way, the buyer formally acquires the right of ownership over the real estate he bought at the moment of registration. Until then, the buyer has only the right to request to be registered as the new owner of the property, in order to formally acquire ownership of the property, provided that a valid contract has been concluded and the full purchase price has been paid.

Does that affect the beginning of a possible renovation of the apartment?

It depends on what is agreed and to what extent the new owner intends to adapt the apartment. In order to answer that question, it is important at which moment and with which intention the renovation is planned to be made, so the legal possibilities of the buyer will depend on the answer to those questions.

On the other hand, in the case when the buyer has entered into possession of real estate, and has not yet formally acquired the right of ownership, if he wants to renovate the apartment, and that the type and scope of work requires a permit from the municipal authority, the buyer must wait for the formal acquisition of property rights to apply for the permit (in most municipalities).

Taxes

When buying an new constructed apartment, the buyer pays the VAT directly to the investor, which is included in the purchase price.

Otherwise, the buyer pays the tax on transfer of rights at a rate of 2.5% of the market value of real estate determined by the tax administration according to its own parameters, not the amount of the agreed purchase price, but which often match. Legally, the taxpayer of that tax is the seller. In practice, the obligation is transferred to the buyer by the purchase agreement. Accordingly, the buyer is authorized by the purchase agreement to submit an appropriate tax return in the name and on behalf of the seller in order to determine the tax liability. Upon receipt of the tax decision, the buyer has 15 days to pay the determined tax.

In both cases, the buyer of a new apartment becomes a property tax payer. The amount of the property tax depends on a number of parameters such as: where the building is located, how old the building is, the surface of the apartment and the terrace, and whether the buyer has registered residence at the apartment.

The notary public who has certified the real estate purchase agreement is obliged to submit the appropriate tax application forms ex officio, which saves the buyers money and time.

Change of user in public and utility company services

There are no legal regulations governing the segment of changing users in public and communal services, in relation to the apartment that is the subject of sale. The procedure for changing users depends on the internal regulations and procedures of each public or utility company, and this segment should be checked with each of the companies individually.

Are there any additional obligations when buying an apartment?

The practice of building large residential complexes of closed type, which is emphasized by the seller as an added value of real estate, has led to the fact that buyers are obliged by the real estate purchase agreement to participate in forming a housing community, and often agree in advance with the house rules that the seller will bring.

Buyers are also obliged to conclude a contract with a company that will provide maintenance or security services for the complex, without knowing exactly under which conditions.

All of the above was established in order to maintain the value of the entire residential complex, so that the seller (investor) could maintain the price level of the apartments.

In addition, when it comes to large residential complexes, it is an increasingly common practice for sellers, (investors)  to impose a waiver of the right to use common areas (basement, attic), except those that are necessary to pass through the building to the apartment.

Although real estate purchase agreements may seem clear, life still creates events faster and more creatively than the area of legal regulation. Clear answers to all questions and concerns will greatly affect the sense of security during the purchase process. However, there is always a risk.

For more information on this or any other legal, tax or business topic, you are free to write to us at [email protected] at any time or call us at +381113281914 every working day from 08:30 to 16 : 30