Buying their first home is a dream come true for many people. But, accompanied by the joy that this achievement brings, all the paperwork of documentation comes together to transfer the property to the name of the new owner. It looks like a beast with seven heads: an endless list of necessary documents, extremely high fees, several trips to the notary’s office, the notary’s office and much more. But all these steps are essential to ensure your safety and that of your investment. And more: did you know that if this is your first property, you get 50% discount on registration? Well, many people are unaware of this right, guaranteed by law for over 40 years.
Let’s take it easy. In this post, we’ll show you step-by-step how to register a property and how to get this discount. Check out!
Why register my property?
Many people postpone the registration of their property after discovering the cost of fees involved in this procedure. And really, we cannot deny that it is a very high cost that can reach 4% of the property’s value. The exact amount varies for each Brazilian state and municipality.
But we have to emphasize that the property registration is fundamental in any real estate transaction and makes the formal recognition of the property. Under the law, only those who register their property effectively become its owner. In other words, it is security for you and your investment.
What documents do I need to register my property?
First of all, let’s separate all the necessary documentation regarding the property, such as the IPTU debt certificate and other certificates that prove that there are no debts or pending issues with the Court:
• Copy of the acquisitive title;
• Certificate of Ownership, with denial of liens and disposals, issued by the Capital’s Real Estate Registry Office;
• Clearance Certificates from the Capital Protest Registry Offices, covering the period of five years prior to that date;
• Clearance Certificates of Forensic Distributors of the State and Federal Courts and Tax Executives – State and Municipal, covering the period of 10 years prior to that date;
• Certificate of Labor Court Distributors;
• Certificates of object and foot of any actions, executions or protests, contained in the aforementioned certificates;
• IPTU for the current year, with installments overdue by the date duly paid;
• Cover of the previous year’s IPTU for calculating the ITBI (next topic);
• Clearance Certificate from the City Hall, giving full discharge of municipal taxes until the date of transfer of ownership;
• Proof of payment of the last energy, water and gas bill, if any;
• Certified copy of RG and CPF, Marriage Certificate and anti-nuptial agreement;
• Declaration by the condominium administrator giving full discharge of condominium expenses to date, with a document proving the powers of the person signing it.
In addition, we have the purchase and sale contract, which is an agreement that obliges the parties to honor established commitments: the seller undertakes to transfer the property and the buyer, to pay the due amount. After signing this contract, it is necessary to make the public deed, an official document that validates the agreement between the parties and is prepared at the notary’s office.
In the case of a cash purchase, it will always be necessary to draw up a deed in a notary office, however, in the case of financing, the contract issued by the banks replaces the deed.
These documents are necessary to register the property in your name, with the Property Registry Office.
What do I need to pay to register my property?
The main expenses involved are the Real Estate Transfer Tax (ITBI), charged by the city hall, the public deed, charged by the notary office, and the property registration, charged by the notary office. In addition to the costs to obtain all the certificates mentioned above.
ITBI is charged in cases of transfer of ownership and, as a general rule, the buyer is responsible. It is applied to the value of the property and varies according to each city. In São Paulo, for example, the rate for direct purchase is 3%. However, if the property is financed through the Housing Finance System (SFH), that is, for properties costing up to R$ 950,000, from the Residential Lease Program (PAR) or Social Interest Housing (HIS), the tax is different. A percentage of 0.5% of the amount effectively financed is applied, up to the maximum limit established for the city, which is R$ 88,714.99. On the remainder of the price that exceeds this limit, 3% applies.
For registration and deed, the fee varies according to the value of the property and the state where the property is located. The amount charged for registering an apartment worth R$200,000, for example, is less than for a property worth R$800,000.
Now, whoever opted for financing will have to pay even more? In this case, you must pay a fee for the inspection that assesses whether the price stipulated by the seller is fair. The expense is around R$3 thousand.
What’s the step by step then?
The simple step-by-step can be divided into three essential steps:
1) The buyer and seller sign a purchase and sale contract, agreeing on the sale of the property. It contains the information about the property, the value, the payment terms and the data of the people involved. Along with this, it is necessary to go after all the certificates mentioned above;
2) With the contract and certificates in hand, it is time to make the public deed. For this, those interested go to the Notary Public, taking the contract and complete documentation. The notary will analyze the documents and check if everything is ok with the property. That is, if everything is fine, he will give public faith in the contract. The result of this “giving public faith” is public deed. It is also at this time that the ITBI guide will be issued for the buyer to pay at the bank by the due date.
3) In possession of the deed, the ITBI payment receipt and the previous documents, those involved go to the Real Estate Registry Office. Finally the property registration is done. This is when the property is transferred to the buyer and the property registration is updated to show the name of the new owner.
Congratulations, the property is officially in your name!
Do I have a discount to register my property?
What many people don’t know is that the Public Records Law (6.015/73) guarantees a 50% discount on the registration and deed of the first property.
This discount was created precisely to encourage buyers to register the property they purchased, because many people, surprised by the high expenses, simply decide to postpone registration.
But there are limitations to granting the discount. The rule is only valid for those who purchased the property financed by the Housing Finance System (SFH), with resources from the savings account and the guarantee fund, and with the purpose of living in that property.
Another imposition is that the property has a maximum value of R$950 thousand in the states of São Paulo, Rio de Janeiro, Minas Gerais and the Federal District, and R$800 thousand in other states.
It is important to point out that this rebate does not apply to ITBI, it is only for the payment of the so-called fees, which are the notary costs for registering the property.
To obtain the discount, the buyer fills out a statement signed in his own hand, before the notary’s office, attesting that that property is his first, being responsible for the statement under the law.