Thursday, January 27, 2011

Update on Real Estate Costs

Having had occasion to direct one of my clients to my blog I noticed that I needed to give an update as to the current costs usually incurred on real estate transactions. This applies to transactions dating from January 1, 2010.

Transfer Tax - This was discussed in summary form earlier. Vendors will be happy to know that they will now only have to fork out four percent (4 %) of the market value of the property transferred.

Stamp Duty -   This is payable on the stated value or price of the property on the face of the document eg. Agreement for Sale. This has been reduced to three percent (3%). We remind you that this duty is shared equally between Vendor and Purchaser.

Unfortunately this has not had the desired effect of boosting the real estate market and may account for the fact that Attorneys are seeking to find ways to increase their income as the transactions remain flat. It is common therefore to now pay upwards of J$50,000.00 for the simple preparation of an Agreement for Sale. While this fee is usually shared equally, there will be occasions when the Purchaser will bear the full brunt of this charge, such as when the agreement is cancelled due to no fault of the Vendor.