Signing the deed of the property before a notary is an essential step to make the purchase of your home a reality if you sign a mortgage. In this article we explain how to do it and everything you need to know about it.
What is the deed of the house?
Let's start at the beginning. Do you know exactly what the title deed is? You probably have a rough idea, but it's always better to clear up any doubts.
The deeds of the house are a legal document that is signed before a notary and confirms the purchase and sale transaction. Think of them as the receipt for the purchase you have just made.
If you are interested in leaving a record of the fact that you have bought a mobile phone, imagine how important it is when it comes to your home. This deed will include, in addition to the sale, the conditions under which it was made, who was involved and the price.
It is not mandatory to register the property when purchasing a house, but you will need to do so when signing the mortgage for the property .
What do you have to do to register a house?
The deed for the property is signed before a notary and then registered in the Property Registry, which is where you can find out if a house is mortgaged or who its owners are, for example.
There are four basic steps to registering a home:
? Appointment with the notary, who will review the contract for the sale of the house and all the documentation. In the case of a mortgage, it is mandatory to visit the notary before signing the loan. During this first consultation, the notary will make sure that you understand the terms of the loan, that you know what you are signing and its consequences, and will also resolve any questions you may have about your mortgage.
? Signing and granting the contract of sale. The second step in signing the deed of the property is to sign the transaction, something that is normally done on the same day that you sign the mortgage. This way you do not have to go to the notary twice.
? Payment of costs and taxes. Signing the deed of the house has a series of costs, starting with the notary fees and continuing with the purchase taxes (VAT or the Property Transfer Tax depending on whether it is new or second-hand).
? Issuance of the certified copy. Finally, all that remains is to receive your certified copy of the document. Who keeps the original of a deed? The notarial deed of the mortgage will remain in the possession of the notary, who will be responsible for safeguarding the original document and registering it in the Property Registry (if you wish, you can also do this yourself). What you will receive is a certified copy, which has the same validity as the original.
What documentation must be provided?
You must attend the signing with your homework done. In order for the notary to be able to register the house, the following documents must be provided:
Documents that identify the buyer and seller, which includes the ID of both.
? Latest IBI receipt, which guarantees that this tax has been paid.
? Simple mortgage registration note, which is a document that you must request before buying the house and which serves to prove that the property has no charges or debts, among other things.
? Title of ownership of the home.
? Energy efficiency certificate for the home.
? Earnest money contract, if applicable.
? Latest utility bills paid, which will also serve to ensure that there are no debts in this regard.
? Certificate of current payment to the community of owners. In the case of registering the house with an outstanding mortgage, the seller must provide the certificate of outstanding debt.
Who should pay the deeds for a house?
The costs of granting the property are paid by the seller and the mortgage costs are paid by the financial institution.
As a buyer, you will only have to pay the cost of the copy of the deed and the mortgage that you will keep. And how much does that cost? Here you can see how much the deed of the house costs .
How is the value of the deed calculated?
The cost of registering the house is the sum of three expenses:
Notary fees, which are regulated, may vary depending on the notary you choose.
? Property registration fees.
? Taxes to be paid.
These expenses are directly related to the value of the property in the deed, which will normally be the same as the purchase price. In other words, the price you paid for the house, which is the one that will later be used to calculate your profit for personal income tax purposes if you sell the property.
What if you write for less?
A more or less common practice is to register the property for a value lower than the purchase price. The first thing you should be clear about is that doing so is not legal. Those who do so do so because they will pay part of the house in cash and the main reason for doing so is to pay less taxes, both on the part of the buyer and the seller.
To help you understand better, the taxes paid when buying or selling a house depend on the price stated in the deed. The lower it is, the less taxes both parties will pay.
However, if you write the deed for a value that is very low and different from the actual transaction, the Treasury may investigate the transaction and penalize you and the seller.
Furthermore, if you sell the property later, you will have to pay more taxes on your personal income tax. The reason is that the profit you make is calculated by the difference between the purchase and sale price when filing your tax return.
As always, it is better to do things right from the start and avoid problems, both with the deed and with the mortgage on your house .
