There has been a recent change in tapu fees; transfer fees for property purchases have been increased.  
                              
Buying, selling and transferring property sometimes presents more questions than answers, especially when the sale involves taxes and fees you were unaware of. Today, I will briefly explain the deed transfer tax, as it is the most common fee that is charged in real property sales transactions.
The deed transfer charge is a tax that is paid to the state when a real property is sold, to cover administration and oversight fees. It can be thought of as a sales tax on buying and selling a piece of property.

How is it calculated?

The total amount of a deed transfer tax depends on the selling price of the property. For the past nine years, the tax rate was 3 percent of the actual purchase price. However, this year all fees have been increased by 10 percent with a general communiqué issued annually by the Ministry of Finance. Therefore, the deed transfer tax is now being applied at a rate of 3.3 percent as of Jan. 1, 2010.

Who pays the tapu fees, the buyer or the seller?

Officially speaking, both do. The transfer tax is divided equally between the seller and the purchaser, i.e., 1.65 percent for each party. However, this depends on the terms of the contract. Typically, other arrangements can be made if either party would like a different arrangement, but this must be determined before the purchase can be completed. In practice, the purchaser usually pays the whole lot.
 
First published on Today's Zaman
July 19th, 2010