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If one currently owns a S.A. and is looking to buy a property held in an S.A. , is it possible to transfer the property or S.A. being purchased into the currently owned S.A. without paying transfer taxes ? There is financing involved , so the purchase has to be done, in this case, as a person buying the property not a corp. buying another corp. So once you buy a S.A., how do you get that property transferred to another S.A. without paying taxes ? is that possible ?
Why not simply buy the new property, currently owned by the second (its own) S.A, (right?) and leave it in that existing S.A? No transfer tax would be imposed.
The financing issue is easily addressed. At closing, the lender would place a lein on the property of the S.A. and you, an individual human being, would guarantee the loan. The S.A. isn’t qualifying for and obtaining the financing; you are. The bank is lending *you* the money and taking title to the S.A. and its assets (the property) as collateral. We have done exactly this — we qualified for financing and put up the property as collateral.
I think your own attorney would caution you against holding two properties in the same S.A., if only for legal liability reasons. If a judgement were entered against that S.A., both real properties would be liable to seizure to satisfy the award.
What’s more, if you ever wished to sell just one of the properties, you would have to sell it outside the S.A. which would be more complicated than a simple entry into the corporate books and a transfer of funds. And at that time, a transfer tax would be imposed, too.
And if you sought to obtain financing for the purchase of one of the two properties held by the same S.A., you might find a lein effectively placed on all the assets of the S.A., i.e., both properties.
This is a legal snafu that’s easily avoided. Keep the two properties in separate corporations.
If the shares of the S.A. that holds the property are being purchased, rather than transfering the registered title to the property in the National Registry, to yourself personally, or to an S.A., no property transfer taxes, or National Registry fees will be payable on the transaction.
If the S.A. which you currently own, already holds property, or other assets, I would suggest that the to-be-purchased property held in the S.A., or alternatively, the shares of that S.A., not be transfered to the S.A. which you currently own, for the reasons stated by the previous writer.So, can it be concluded that to buy a property held in an S.A. would best be expedited (via lawyer) by confirming clear title on property and S.A, and simply “take over” the S.A.? Would that be the best and most cost efficient way to take ownership of the property provided nothing else is owned under that S.A.?
When buying a property by way of acquiring the shares of an S.A. which is the registered owner of the property in the National Registry, it is important not only to check the title of the property in the S.A., but to also insure that the S.A. has been used for no other purpose, other than to hold the property. When purchasing the shares of an S.A., any and all liabilites of the S.A., contingent or otherwise, are acquired with the share purchase. Older S’A.’s are more risky to purchase the shares of than more recently formed S.A.’s, which are more easily confirmed as single purpose entities (ie. to hold the property only), and are less likely to have contigent liabilities, which are difficult to determine with certainty.
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