Obtain a social security clearance certificate
Agency: Social Security Organization
A social security clearance certificate must be obtained from the Social Security Organization for properties being used for commercial purposes (Social Security Code § 37). An inspection of the premises is carried out to check if the premises can be used for commercial purposes. Obtaining a Social security clearance certificate is mandatory by law and the deadline to obtain this certificate is 20 days.
Time and cost: 20 days, no charge
Conduct a check on the property at the Real Estate Registration Department
Agency: Real Estate Registration Department
The buyer/seller visits the notary office, where the notary will electronically contact the Registry Office to ask if there are any obstacle to transfer this property. The copy of the title deeds or replica copy is valid for one month until the answer of the Land Registry is displayed on its official website.
Time and cost: 3 days, IRR 400,000 (IRR100,000 + IRR300,000 for urban areas
IRR100,000 + IRR100,000 for rural areas)
Obtain a tax clearance certificate from the Tax Affairs Organization
Agency: Tax Affairs Organization
When transferring a property, the seller must obtain specific tax forms and municipality duties from the notary’s office (procedure 2). These tax forms are then submitted along with the required documents to the tax office, for the calculation of the taxes to be paid. This clearance serves two purposes: (i) to check whether there no outstanding taxes on this property. The verification process is still paper based, and it takes time for the officers to verify that there are no outstanding taxes. (ii) it is also to verify that the property transfer tax of 5% has been paid.
The clearance of taxes is determined according to official regional values. The certificate is valid for 1 month. According to amended Article 1 of the Law on the Facilitation of Administration of Notary Public Office of July 2006, the public notaries must not register a property transaction before the receipt of the Tax Clearance Certificate (starting in March 20, 2016)
Time and cost: 12 days, IRR 349,689,129.7 (Cost includes: Real Estate Transfer Tax + Commercial Goodwill Tax
- Real Estate Transfer tax is calculated by the following formula: (M^2 of property * Real estate value for 2018 per M^2) + (((M^2 for warehouse*Real Estate Value for 2018 per M^2)*30% warehouse deduction)*80% 10 year time deduction))*5% transfer tax
- Commercial Goodwill tax is calculated by the following formula: (Case study property value – (((M^2 for warehouse*Real Estate Value for 2018 per M^2)*30% warehouse deduction)*80% 10 year time deduction))*2% Goodwill Tax
*For each year increase of building age, its value shall be reduced 2%, thus multiplied by 80%
*30% of land value is considered as building value
*The type of materials used in construction of warehouse is not taken into account
Article 59 of Direct Taxation Act of Iran 2015 – The final transfer of real estates, as well as the transfer of goodwill, shall be subject to taxation at the time when such transfers take place by the owner of the substance of the property or by the possessor of the right of goodwill. The basis of taxation shall be the taxable value in case of real estates and the price received by the owner or possessor of right in case of goodwill and the rates of tax will be 5% and 2%, respectively. The taxable values of real estates are determined by Real Estates Valuation Committee.
Article 64 of Direct Taxation Act of Iran 2015 provides – Committee shall determine the taxable value amounting to 2 % of the average market value of the estates of the region in first year. This rate rises for 2 % each year up to 20 percent of the estates’ value.
Criteria for determining the taxable value of estates are: price of the building based on studding, age, usability. The price of the land based on the applicability and geographical location.)
Obtain settlement certificate for reconstruction duty from the Municipality
Agency: Tax Affairs Organization
A settlement certificate (tax clearance certificate) must be obtained from the Municipality to account for any and all the renovations made to the property. In practice municipality and village authority have to come to the premises and conduct inspection in person to determine the fee.
Time and cost: 5 days, no charge
The deed is prepared and notarized at the notary public’s office
Agency: Public Notary
Documents are sent electronically to the land registry (online), but the buyer and seller must be physically in the Notary office to sign the documents. The electronic platform is used by the Notary to do checks on property, communicate with Registry Office, prepare the deed, etc,. The draft agreement is prepared at the Notary office, it is then signed, and finger scanned/inked at the notary and then sent to the Land Registry.
The notary public collects an amount according to legal tariffs determined by the Organization of Deeds and Properties Registration at the time of drawing up the deed, which includes writing fee and the registration fee. According to the decree 87/8039 of the Deputy Head of the Organization for the Registration of Deeds and Properties.
Time and cost: 1 day, IRR 80,677,621.19
Immovable property transaction fees according to the “Mantaghe Bandi”(Zoning) Price, for a property value:
- Up to 2,000,000 IRR: fixed fee of 600,000 IRR
- From 2,000,000 IRR to 10,000,000 IRR: 16.5% of the (cadastral) property value
- From 10,000,000 IRR to 50,000,000 IRR: 11% of the (cadastral) property value
- From 50,000,000 IRR to 100,000,000 IRR: 5.5% of the (cadastral) property value
- From 100,000,000 IRR to 200,000,000 IRR: 3.3% of the (cadastral) property value
- From 200,000,000 IRR to 500,000,000 IRR: 1.1% of the (cadastral) property value
- From 500,000,000 IRR to sum of 1,000,000,000 IRR: 0.4% of the (cadastral) property value
- Above 1,000,000,000 IRR: 0.2% of the (cadastral) property value
In addition, 500,000 fee for obtaining title in Procedure 6 + .5% registration fee)
The title is registered at the Real Estate Registration Department
Agency: Real Estate Registration Department
The title is registered at the Real Estate Registration Department by the notary public, who sends an abstract of the deed.
Land Registry sends the deed to the buyer in a special envelope. Deed is not given in person, because the agency wants to have a record of the postal address of the buyer. Deeds need to be signed by different Land Administration officers.
Time and cost: 10 days, no charge
