Procedure At Land Office Paying Taxes

[chickencurry]

Can someone enlighten me what exactly happens at the Land Office when a sale completes? I know that Buyer and Seller go to the Land Office and the Land Office then dishes out the bills for transfer fees, SBT etc. Presumably the Land Office will look at the Contract to see what has been agreed?

We are selling and our Buyer has stated that he will go 50:50 on ALL fees, taxes, personal taxes including the Special Business Tax (SBT). Unusual I know and we are not complaining. I'm just wondering however how this is going to work in practice.

We are currently at the stage where we are drafting a Contract. I am thinking that we should set out in the contract exactly what is going to be paid and by whom with regard to fees and taxes.

Appreciate any advice or comments on the above.

[keeniau96]

Put it all in writing, clear and simple. A standard USA closing will list every last cent paid out and who will pay it. If you don't know the specific amount then clearly write out that the payments will be split 50:50, enumerating each of those payments as well as a general catch-all phrase covering anything not listed.

[Changian]

The Land Office don't care who pays them the money or what agreement the buyer and seller have. They'll be an invoice handed over for the amount of tax due and then the buyer and seller reach into their wallets or rush to the nearest ATM / bank to get the amount they have agreed to pay. It's better to know roughly how much tax you'll have to pay so you can have the money on hand as that will save time in the Land Office. This means agreeing with the seller what price you are going to declare to the Land Office - as it is very rare that the full price is declared. Or if you know the Land Office valuation for the land in the area where yours is located ( this will be written in a book, which is only updated every 4-5 years, in the Land Office) then use that as it will often be lower than the real selling price.

Here is it about 5 times lower in some areas. Eg selling price for a 400sqm beachfront plot declared as 1.2 million by housing developer, when actual selling price is over 6 million

Usually the nice folks at the Land Office will let you know what a good price to put is - as if it is too low it can arouse suspicion. Likewise if you put the full price they will let you know that really you can declare a lower price and reduce the tax. ( Had this once with some land here when the old local guy who was selling - and who also agreed to pay all taxes - wanted to declare the full price and the Land Office guy tried to talk him out of it to save him money.)

Also they'll often be two contracts - the one you sign with the seller with the actual selling on it and the one you use at the Land Office, which is just a simple government form which shows the declared price.

And before the TV nannies get on the case, yes of course you should declare the true selling price.