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Mar 30, 2016

Buying costs are very low in Macedonia


How high are realtors’ and lawyers’ fees in Macedonia? What about other property purchase costs?

Transaction Costs

Who Pays?
Sales tax 2.00% - 4.00% buyer
Real Estate Agent’s Fee 2.00% seller
Notary fee 0.10% - 1.00% buyer
Legal fees 0.10% - 0.50% buyer
Registration fees 0.001% - 0.1% buyer
Value Added Tax (VAT) 18.0% buyer
Costs paid by buyer 18.30% - 20.10%
Costs paid by seller 2.00%
ROUNDTRIP TRANSACTION COSTS 20.30% - 22.10%
See Footnotes
Source: Global Property Guide

How difficult is the property purchase process in Macedonia?

Foreign individuals can freely buy apartments and buildings subject to the reciprocity rule and approval from the Ministry of Justice. The parties must first acquire a non-encumbrance certificate from the Real Estate Cadastre. Concurrently, the seller should secure a Title Deed and a registration of real estate from the Department of Cadastre.

Macedonia traditional architetcureA lawyer then prepares a sale contract, as Macedonian Law stipulates that only lawyers can draw up sale contracts. Thereafter, sales tax will be paid to the municipality (previously done in the Public Revenue Authority). Tax rates are determined and collected by the municipality where the real property is located. The decision for the amount of property tax by the Mayor should be passed and delivered within 30 days after the submission of the application.

Pursuant to paying taxes, the agreement is verified by a notary public, who will inform the Department of Cadastre about the change of ownership. A lawyer, or the buyer himself, would then apply for registration at the Cadastral Office for a new title deed. Registration and request for a new Title deed can take as much as 30 days.

It takes an average of 29 days to complete the seven procedures needed to register a property in Macedonia.

Land: Foreign citizens and companies can directly own land for construction in Macedonia, under the Law on Construction Land adopted in 2008. Under the law, the construction land is sold through a public tender procedure. Also, foreign individuals and companies can lease land for up to 99 years through a public bidding process.



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Sales tax:
Sales tax on transfer of property and property rights is levied at 2% - 4%of market value.

Value Added Tax (VAT)
Value Added Tax (VAT) at 18% is imposed on first turnoever within five years of construction of residential buildings and apartments.

Agent´s commission:
Real estate agent´s commission is 2% of property value. It is typically paid by the buyer.

Legal fees:
Based on market practice, the Revenue Office requests sale agreements to be prepared by an Attorney at Law. Legal fees are generally negotiable.

Notary fee:
Notary fees are set in accordance with the Tariff for Notary Services adopted in 2011.

NOTARY FEES

PROPERTY VALUE MKD (€) NOTARY, MKD (€)
Up to 300,000 (€4,387) 0
300,000 – 3 million (€48,387) 2,000 (€32)
3 million – 5 million (€80,645) 10,000 (€161)
5 million - 9 million (€145,161) 12,000 (€194)
9 million – 20 million (€322,581) 20,000 (€323)
20 million – 60 million (€976,742) 30,000 (€484)
Over 60 million (€976,742) 60,000 (€978)

In cases where the sale contract is prepared by a lawyer and the Notary Public only verifies the contract, the applicable fees are reduced to 50% of the general notary fees.

NOTARY FEE

PROPERTY VALUE MKD (€) NOTARY, MKD (€)
Up to 300,000 (€4,839) 0
300,000 – 3 million (€48,387) 1,000 (€16)
3 million – 5 million (€80,645) 5,000 (€81)
5 million - 9 million (€145,161) 6,000 (€98)
9 million – 20 million (€322,581) 10,000 (€163)
20 million – 60 million (€967,742) 15,000 (€244)
Over 60 million (€967,742) 30,000 (€488)

Legal Fee
The Revenue Office requests sale agreements to be prepared by an Attorney at Law, based on the market practice. Legal fees are generally negotiable.


Registration fee:
Registration fee is around 0.10% of the property value. Registration fee is generally negotiable.






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