Have you decided to purchase a property: apartment, house or land? It is very important to prepare proof of the origin of the funds for their procurement.
LAW No. 308 of 22-12-2017 regarding the prevention and combating of money laundering and the financing of terrorism, says that the Buyer must present to the Notary a document confirming the financial means for the purchase of a real estate.
The purpose of the law is to counter tax evasion or money laundering on the territory of the Republic of Moldova.
Documents that can confirm the origin of the money
The buyer, at the Notary, will present one or more documents indicated below that will confirm the legality of the money for the purchase of a real estate asset:
- Employment contract from the Republic of Moldova + Salary certificate
- Employment contract abroad + Salary/income confirmation certificate, Extract from bank accounts, Copies of bank transfer provisions / declaration of introduction of monetary means by land from the Customs Service
- Certificate from FISC regarding the income obtained in the last period
- Donation contract authenticated at the Notary
- Loan contract + Source of funds from the person offering the loan
- Certificates of receipt of dividends from enterprises or commercial companies
- Credit agreement (mortgage loans / consumer loans)
- Real estate sale-purchase contract
*In case of failure to present a document regarding the justification of the origin of the funds, the Notary has the right to inform the Prevention and Combating of Money Laundering Service.
Declaring the real amount of the transaction at the Notary and paying the capital gains tax
One of the biggest mistakes that Sellers make is not declaring the real amount of the transaction to the Notary, indicating a lower amount in the sales contract to avoid paying capital gains taxes.
Later, however, when they want to purchase another real estate in the Republic of Moldova or abroad, they face the problem of not having sufficient proof of the origin of the money.
In order not to break the law and to sleep peacefully, it is much safer to declare the actual amount of the transaction and pay a tax according to the RM law of 12% of ½ of the capital increase (or more simply - 6% of the capital increase) .
Capital Gains and Income Tax Formula
Current Sale Amount - Previous Purchase Amount = Capital Gain
Capital Gain * 6% = Income Tax
Example
1000 000 MDL - 800 000 MDL = 200 000 MDL (Capital Increase)
200,000 * 6% = 12,000 MDL (Capital Growth Tax)
Important!
If you sell a property of which you have been the owner for more than 3 years and you have had your primary residence in this property for more than 3 years, then you will not pay Capital Gains tax.
By paying taxes in the State Budget, you ensure the provenance of your money and contribute to the well-being of the entire society. Be responsible for your future!
An informed customer is a protected customer!
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