The real estate sale contract has to be drawn up in writing. The contracting parties may choose to have the contract drafted by a notary in the form of a notarised act or if the parties or their lawyer have/has drafted the contract, then it is formalised (confirmed) before a notary.  This type of contract is then forwarded to the Land Registry electronically so that it can be entered in the public registers thus giving rise to ownership rights.

Several forms are not possible. Either the contract is drafted in the form of a notarised act before a notary or it is formalised by a notary. Both forms have the same certainty.

The contract is signed before a notary in the presence of all the contracting parties. Prior to the signature of the contract, the notary checks the identities of the contracting parties, reads out the contract to them and explains its purpose and consequences to them, warns them of the legal consequences and when he/she is certain that the parties are authorised to conclude the contract and there are no legal hindrances to its conclusion, the contracting parties sign it and the notary places his signature at the end of the contract.

The rights and obligations are established in the contract. At the time of the signature, the buyer will have paid the contractual sum to the seller providing a bank receipt of the payment to the notary. The transfer of ownership may occur on the day of the signature of the contract or on another day as agreed by the parties.

When selling property, the contracting parties may agree that the seller has the right of first refusal, if the buyer decides to sell the same property. This right of first refusal may last for a maximum of 5 (five) years from the day of the conclusion of the contract. When selling a given property, if other persons also have a right of pre-emptive purchase, the seller is obliged to fulfil the same sale conditions concerning the property (price, form of payment, etc.) and inform them through a notary. The person have a pre-emptive right has to respond to the seller’s offer within a given deadline. If the person accepts the offer, he/she has to pay the sale price into the account of the notary within a given deadline. If the person fails to respond within 30 days from the written acceptance of the offer, the seller may sell the property to any other buyer. If one of the contracting parties is represented by an agent, the power of attorney has to be certified and be in the form of a public document. If one of the contracting parties is a legal entity, the authorised representative of this legal entity has to provide evidence from the Business register that he/she is the person authorised to represent this legal entity and submit a power of attorney, in the form of a public document, attesting that he/she is authorised to conclude the contract on behalf of the legal entity.

Who fulfils the formalities for the implementation of these rights?

These formalities are fulfilled by the contracting parties. The notary can obtain information from the Business Register on registered legal entities.

The buyer becomes the owner as soon as the property is entered in the public register where property rights are recorded. In the Republic of Macedonia, this register is the Immovable Property Register, which means that if the buyer becomes the owner, in addition to the contract, it will be necessary to fulfil the criterion on the mode of acquisition (modus acquerendi) as a legal basis (iustus titulus). This is the way rights over property are registered.

Payment is generally made at the time of the signature of the contract.

In accordance with the regulations currently in force in the Republic of Macedonia, if the contractual price is 15,000 EUR or more in Macedonian currency, then the buyer can only pay the purchase price through a bank.

If the purchased real estate is mortgaged, the mortgage remains in place regardless of whether the property has changed owner. However, if the buyer does not want a mortgage and does not want the property to be mortgaged, it is necessary to contact the mortgage creditor to find out how the mortgage can be settled. The buyer may agree with the seller that part of the contract price be paid to the creditor bank on behalf of the seller in order to settle the mortgage, etc.

When selling real estate, if the seller is a person, a tax on the transaction is paid, amounting to 3-5% of the market value of the sold property. The rate is fixed by the municipality where the property is situated and the tax is paid to this municipality. Tax rates are calculated by the tax authorities of municipalities. If the seller is a legal entity, besides the tax on the transaction, it also has to pay value added tax (VAT) amounting to 18% of the market value of the sold property. The market value of the sold property is estimated by an authorised individual commission in the municipality, while in other municipalities the market value is estimated by authorised evaluators. The tax on the transaction is paid following the signature of the contract. If the tax on the transaction is not paid, the sale contract cannot be submitted to the Land Registry, as the Land Registry will not enter the buyer’s ownership right in the public registers where ownership rights are recorded, unless the tax has not been paid. The rates can be found on the official website.

The amendments to the law on Taxation that came into force on 01.01.2016 establish a streamlined procedure for tax payment and the prompt transfer of ownership from the seller to the buyer.

In particular, the contracting parties who have concluded a real estate sale contract may choose a special procedure to determine the sum of the real estate transaction tax that will be settled by the notary whose jurisdiction is based on where the property is situated. The taxpayer (or buyer according to the agreement) has to give the notary a report on the property’s estimated market value and the calculation of the tax advance on the sale, both prepared by an authorised evaluator, as well as the duly completed tax registration form. The notary obtains the ownership title in electronic format containing the property data including details on the mortgage and any other charges, a bank statement if the buyer is a person, and organises the conclusion of the sale contract. The form and content of the report, the calculation and statement are requirements established by the Minister of Finance.

In accordance with the tax advance form, the assessment and calculation of the tax advance on the sale, the taxpayer pays the tax on the purchase-sale of the property into the notary’s deposit account for the payment of purchase-sale tax advance. Following payment, the notary transfers the tax sum into the accounts of the local government (the municipality). Later, the notary formalises the purchase-sale contract or drafts it in the form of a notarised act, adding the clause that the real estate transaction tax has been duly paid. The notary electronically submits all the transaction-related documents to the Land Registry of the Republic of Macedonia which, in turn, records the property ownership right in the public registers within one working day and forwards the complete documentation to the competent local government electronically. The procedure of checking the documents, transferring the tax sum, formalising the purchase-sale contract or notarised act and forwarding the documents to the Land Registry of the Republic of Macedonia has to be performed within two working days. Based on the documentation submitted by the notary, the Land Registry, the responsible local government agency (the municipality) checks the sum of the tax to be paid and issues tax decision. If the municipality determines that the property’s market value and the sum of the purchase-sale tax advance have not been calculated correctly by the authorised evaluator, it issues an assessment review request addressed to the Assessment revision committee of the Chamber of Evaluators. The decision of this commission is final and if it establishes that a difference is due, the taxpayer is required to pay it.

In general, at the conclusion of the contract (when it is signed before the notary) or following the conclusion of the contract. This depends on the contracting parties.

The procedure for the publication of the sale agreement is based on the mode of acquisition (modus acquerendi). It consists in entry in a public register where ownership rights are recorded.

Entry in the public register leads to a change in ownership and from that moment onwards the buyer is the owner of the property.