Real Property Taxation

Sale of real properties, what are the costs involve?

When buying or selling a property, it is important to know the taxes and fees involved in a real estate transaction in the Philippines, when it is due to avoid penalties and where to pay such costs to avoid delay and save you from the unncessary frustration. It is also important to note the time frame when the entire process of transfer of title can be completed. Your real estate agent should explain to you these costs particularly if you are a first time property buyer and buying from a private individual. Transaction costs differ when you are selling an ordinary asset.

Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital Assets (Taxable and Exempt)

Tax Form

BIR Form 1706 – Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets -Taxable and Exempt)

Documentary Requirements

1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange

2) Photocopy of the Original Certificate of Title; Transfer Certificate of Title; or Condominium Certificate of Title in case of a condo unit

3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale

4) “Certificate of No Improvement” issued by the Assessor’s office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees

5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable

6) Duly approved Tax Debit Memo, if applicable

7) “Sworn Declaration of Intent” as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt

8) Documents supporting the exemption

Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.

Procedures

File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the property is located. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.

One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the property is located or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014) 

Tax Rates

For real property - 6%.

Deadline

Within 30 days after each sale, exchange, transfer or other disposition of real property.

Documentary Stamp Tax

Description

Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.

Tax Forms

BIR Form 2000 (Documentary Stamp Tax Declaration Return);

BIR Form 2000-OT Documentary Stamp Tax Declaration Return (ONE- TIME TRANSACTIONS)

Documentary Requirements

1) Photocopy of document(s) to which the documentary stamp shall be affixed, in case of constructive affixture of Documentary Stamp Tax

2) Proof of exemption under special law, if applicable

3) Duly approved Tax Debit Memo, if applicable

4) Proof of payment of documentary stamp tax paid upon the original issue of the stock, if applicable.

DONOR'S TAX: http://www.bir.gov.ph/index.php/tax-information/donor-s-tax.html
 
ESTATE TAX: http://www.bir.gov.ph/index.php/tax-information/estate-tax.html


Procedures

File BIR Form No. 2000 or BIR Form No. 2000-OT in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor is registered, for shares of stocks or where the property is located, for real property. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.

One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the RDO where the seller or transferor is registered, for shares of stocks or where the property is located, for real property or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014) 

Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the seller.

Deadlines

The Documentary Stamp Tax return (BIR Form 2000) shall be filed in triplicate (two copies for the BIR and one copy for the taxpayer) within five (5) days after the close of the month when the taxable document was made signed, issued, accepted or transferred; upon remittance by Collection Agents of collection from sale of loose stamps. The Documentary Stamp Tax shall be paid upon filing of the return.


SOURCE: WWW.BIR.GOV.PH