Consulting the notary before, during and after a sale of real estate is a guarantee of legal security and certainty, since the sale of all property involves aspects that need to go through the legality check that only a notary can provide.
Thus, notaries are your main ally to provide security to your assets and we can support you in three different moments:
1. Before the sale
Before signing any contract, or committing to purchase in any way, contact a notary. This professional will confirm certain basic aspects of the property, for example:
- that the person who sells the property is actually the owner;
- if it is a sole owner or the consent of other people must be obtained for the sale -for example, the wife if he is married by marital partnership-
- that there is no inconclusive testamentary judgment and
- that the property does not have a mortgage.
Likewise, the notary, depending on the local legislation, will process the evidences that prove that the property is free of encumbrances and up-to-date in the payment of its contributions, such as property and water or land use certificates.
2. During the sale
When all the documentation is ready, the notary will prepare the corresponding deed and will coordinate a meeting for the signature in which the buyer, the seller, the financial institution are present –in the event that the property is acquired through a mortgage loan–, and the same. At this meeting the corresponding payments will be made and the deed will be read aloud, if everyone agrees it will be signed. This deed will be established in the protocol of the notary.
Payments include the cost of the property, which must be made safely directly to the seller; as well as the payment of taxes, duties and notary expenses, which must be paid directly to the notary, since he is responsible for calculating and withholding local and federal taxes for the purchase of real estate.
In general, the expenses to be paid by the buyer are the property acquisition tax (which is local and in some places is called the domain transfer tax); Public Registry rights ; rights for obtaining certificates or certificates from various agencies (such as the certificate of freedom from liens, certificates of non-payment of taxes, certificates of land use, cadastral plans, etc.); outlays (payment to managers, transfers, appraisals, per diems, etc.); and finally the notary fees and the corresponding VAT.
The notary will guide you on the effects that the provisions of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, better known as the “Anti-Laundering Law”, have on the sale, which are generally:
- The limit to deliver cash when buying a property is 8,025 UMA, which is equivalent to $ 646,815.00 pesos; so if the price is higher than that amount, the rest of the money must be paid with some financial instrument, such as a cashier’s check, certified check or bank transfer and never in cash!
- The notary is obliged to generate a unique identification file, which includes a statement under protest to tell the truth from each of those appearing in the real estate operation about the existence or non-existence of a beneficial owner or controlling beneficiary, that is, someone who does not intervene in the act of sale but receives the benefits of it. Thus, now you must sign this declaration and provide the details of the beneficiary owner, if it exists; in addition to the information and documentary elements in force that are requested.
Finally, the notary will be responsible for issuing an invoice or CFDI for his federal tax fees and withholdings that he makes. In the event that the property has been acquired from a natural person, the notary must accompany this CFDI with a supplement that contains the tax purchase and sale information, which will later allow you to demonstrate what the “proven acquisition cost” was and, for Consequently, exempt or deduct tax when selling the property, as appropriate.
The notary will issue the seller, for his part, a capital smart city map for the withholding of the corresponding taxes.
3. After the sale
The notary is in charge of registering the deed in the Public Registry of Property so that it remains a record of the sale made, thus ending the deed process .
The notary is also responsible for giving you an original testimony of the deed, as well as safeguarding the original protocol where your writing is recorded for 5 years at the notary, after which it will be delivered to the General Archive of Notaries.
It is possible that later you will require a certified copy of the testimony, for which you must go back to the notary or to the corresponding General Notary Archive.
Currently the cost of the deed of sale of a home in the metropolitan area of the CDMX ranges between 4 and 8% of the highest value of the property, this percentage may vary in other states as a result of the taxes and rights established in each Law. However, it is important to note that the largest proportion of this cost always corresponds to the taxes and fees that the notary retains to pay the treasury.
The notary is your best ally in the sale of a property, go to him for information on how to protect your assets. If you do not know a notary, check the buy property
The opinions expressed in this column are exclusive to their author.