Hello! The rate varies from 0.5 percent to 0.75 percent of the zonal value or selling price of the property, whichever is higher and depending on the municipality where the property is located. And when you want to transfer the registration (the Title) to your name, BIR will really ask for that tax which you were supposed to have withheld from the seller. Thanks. And who will shoulder this (buyer or seller). Please note that the sale of foreclosed properties by banks is subject to creditable withholding tax of 6% because banks are not considered as habitually engaged in the real estate business, and properties acquired by banks through foreclosure sales are considered as ordinary assets pursuant to Revenue Regulations No. Ang nasa tax dec is nasa individual and yung Corporation nila is ginamit lang para patakbuhin yung business. Owner should issue an Authority to Sell. If the developer is a VAT-registered entity (most, if not all of them, are), then the VAT is applicable even if the price of the property falls below the thresholds enumerated in the above article. Instead of owing capital gains taxes on the $350,000 profit from the sale, you would owe taxes on $250,000. diba EXPENSE NG BUYER YUN na MALIWANAG? A capital gain occurs when you sell something at a price higher than you spent to buy it. So dapat wala ng additional 12% vat na sinasabi dahil sa train law. When you sell real estate you've held as an investment, the rate at which you're taxed on the profit from it may vary. Please advise po para alam po namin ang sasabihin sa developer. I a private selling to a private. Get notified via email when we publish new posts like this. The amount of tax is either fixed or based on the par or face value of the document or instrument. The buyer of the principal residence should withhold from the seller of the principal residence the supposed 6% capital gains tax. The proceeds from the sale of real properties held primarily for sale to customers in the ordinary course of trade or business or sale of real properties classified as ordinary assets of the seller who is not habitually engaged in real estate business, shall be included in the seller’s global income. It’s vital for homeowners not only to pay these dues but also to understand them in order to keep their money safe and secure. Godbless. Siguro po yung mistake ng developer nyo is hindi sila nagkocomply nito dati, at nang nasilip na sila ng BIR, ngayon lang sila nag-umpisang magdagdag ng VAT sa presyo nila at maningil from their buyers. Real estate agents will usually do the registration process without any additional payments aside from the commission. (i) Capital gains presumed to have been realized from the sale, exchange, or other disposition of real property located in the Philippines, classified as capital assets, shall be subject to the six percent (6%) capital gains tax imposed under Sec. Here’s everything you need to know about the new Estate Taxes under the approved Philippine TRAIN tax reform law.. CGT is a tax on the gain from the sale of capital assets. Estate tax is applicable when the heirs settle the estate left by their ascendants. Now that you’ve bought your new home, your next task is to have your property assessed and declared for taxation purposes. With contributions from Ms. Jane E. Medina, CPA, REA, REB. I have a question related to VAT. The BUYER pays for the cost of Registration: Rodrigo Duterte. Lot Area: 990,000 sq.m. When a property is transferred through sale, DST is imposed on the Deed of Absolute Sale, whose tax rate is 1.5 percent or Php15 for every Php1,000 of the property’s selling price, zonal value, or fair market value, whichever is higher. It is an indirect tax, thus, it can be passed on to the buyer. Outstanding real estate taxes; Capital gains tax (Source 1 February 2018) Documentary stamp tax. The usual arrangement on which party pays what taxes, in a sale transaction is as follows: Warning:What follows may get a little too technical for most people but there’s just no better way to explain and describe these things accurately. FACEBOOK MESSENGER: https://www.messenger.com/t/LamudiPhilippines, OFFICE: Unit 32AD BPI-Philam Life, 6811 Ayala Ave. Makati City, 1226 Philippines. Construction and real estate companies and even those considering buying or those who have actually bought their units might find the analysis of the accounting of the sale of a condominium unit below quite interesting and informative if you will consider the provisions of the contract of sale and the relevant laws in the Philippines. This includes empowering them with proper information about their rights, responsibilities and more importantly, how they can get the best deals on the property they want. The developer and I executed a contract to sell. These values are currently being updated by BIR in line with the. situation, i bought a pre-selling condo and the down payment is payable The easiest way to avoid paying the tax is by using the 1031 exchange rule to swap what’s known as ‘like-kind’ real estate. To understand the rules clearly, here is an illustrative problem to help you compute your capital gains tax. Properties sold by developers are considered ordinary asset po, and because of that, whether or not the price falls below the threshold, VAT applies po talaga. The transfer from the developer to you will be subject to tax, and the transfer to your friend will be subject again to tax. Hi. The Philippines has a tax called Capital Gains Tax but it is really a transaction tax on selling or transferring real estate properties classified as capital assets. The entire proceeds from the sale of the principal residence should be fully utilized in acquiring or constructing a new principal residence within 18 calendar months. It... Write CSS OR LESS and hit save. Land title was not transfer to my name . But owning a house doesn’t stop with choosing which one to buy, it’s a series of overwhelming responsibilities. CTRL + SPACE for auto-complete. This tax is not an actual tax on the gains incurred on the sale of the property. 004-08 dated February 19, 2008 provides for the time and place of payment of creditable withholding tax and DST on the sale, exchange or other mode of onerous disposition of real properties classified as … The donor’s tax for each calendar year is now at a uniform rate of 6 percent under the Tax Reform for Acceleration and Inclusion” (TRAIN) Law. For sure,... 2020 is officially over. Questions You Need to Ask, Time for a Change: Home Design Trends We Need to Leave Behind in 2020, 4 Home Decor Trends for 2021, According to Feng Shui, New Year’s Resolutions That Will Beautify Your Home. Ang pagkakalam ko Dati pa may vat sa mga list price ng condominium? Late payments are subject to 25% penalty. The Registry of Deeds (RD) cancels old title and issues a new one in the name of the buyer. When you first step into your new home, new responsibilities await. Donor’s Tax is a tax on a donation or gift (in this case real property) and is imposed on the free transfer of property between two or more persons (whether strangers or related) who are living at the time of the transfer. On top of the regular customs duty, an additional 10% tax is levied on importation of crude oil and refined petroleum products in order to finance the fund to fight the COVID-19 epidemic. 7-2012 . Section 4 of RR No. So just bear with us. Thanks, Paano naging income ng buyer yung excess na na-pass on sa kanya eh sya nga tumulong na gumastos para sa gastos sana ng seller? Itong CAR naman, ay yung kailangan nyo from BIR para mapatransfer nyo sa pangalan nyo ang titulo ng lupa. I am an ordinary person, purchasing a small condo in metro manila, directly from the owner for the sum of 2,000,000 PHP *(or 1,999,000 if need be) and neither of us is engaged in the the buying / selling real estate business. Ang lupa po ay agricultural land 2000sqm. In your case, it is likely that the VAT is applicable. Under the tax rules, the following are the percentages to be withheld: Here at PPE, we take good care of our clients every step of the way – from the start of the transaction, to long afterwards. (BTW the condo is 68,80 Sq/meter and zonal value is 35000 per Sq/meter). So ung list price nila includ3d na yung vat dun. Known elsewhere as stamp duty, the buyer has to pay this tax on property purchases. Regular corporate income tax (RCIT) [for corporations] and regular income tax [for individuals] apply to the sale of ordinary assets while CGT applies to the sale of capital assets.Thus, we first have to determine whether the asset being so… If you are looking for professional and reliable real estate services in the Philippines, contact us today and be assured of competent work and client support that will save you tons of headaches along the way. The knowledge can help investors reduce their tax obligations and avoid any risk of penalties. Thank you po in advance sa sagot na ibibigay nyo. Follow the procedure for cancellation of the TIN of the decedent as discussed in Section 12 of Revenue Regulations No. Creditable withholding tax (CWT) is the tax which is withheld by the buyer/withholding agent from his payment to real estate dealers, developers, operators and persons or entities who are considered to be habitually engaged in real estate business, and which tax is creditable against the income tax payable of the seller. This is required if buying any real estate property (house, condominium, lot, etc.) The Philippines refers to this tax as the ‘donor’s tax’ and it's imposed on the transfer of real, personal, tangible or intangible property between two or more people who are living at the time of the transfer when this is given as a gift, and no money exchanged hands. 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