deed of sale of a portion only

hi atty. my neighbor and I agreed to turnover to us the 30sqm portion of her 124sqm lot without any payment as that lot is now reflected in the newly approved (by LRA) consolidation/subdivision plan. What kind of contract are we going to execute? Can we do a deed of sale with zero payment or do we need to reflect the market value of property in the deed of sale. since this is just for the portion of her lot, what kind of deed of sale is needed? thanks and God bless.

sale would be the best mode of transfer. you only have to pay 6% capital gains tax and 1.5% doc stamp. as long as he will sign the deed of sale, there should be no problem. see to it however that you need a geodetic engineer to delineate the specific area that you would like to get. the said 30sqm should not remain undivided or unspecified.

after the survey, the technical description of the specified 30sqm lot should appear in the deed of sale particularly in the portion where the property to be sold is specifically described with its boundaries and all.

donation would not be a good idea taxwise, because you would have to pay 30% donors tax if you are strangers as to each other.

however, be prepared to face the consequences because the abovementioned mode of transfer is a simulated sale.

taxconsultantdavao wrote:

sale would be the best mode of transfer. you only have to pay 6% capital gains tax and 1.5% doc stamp. as long as he will sign the deed of sale, there should be no problem. see to it however that you need a geodetic engineer to delineate the specific area that you would like to get. the said 30sqm should not remain undivided or unspecified.

after the survey, the technical description of the specified 30sqm lot should appear in the deed of sale particularly in the portion where the property to be sold is specifically described with its boundaries and all.

donation would not be a good idea taxwise, because you would have to pay 30% donors tax if you are strangers as to each other.

how about barter?

taxconsultantdavao wrote:
however, be prepared to face the consequences because the abovementioned mode of transfer is a simulated sale.

thank you very much sir for the help. God bless

Pedro Parkero wrote:

taxconsultantdavao wrote:

sale would be the best mode of transfer. you only have to pay 6% capital gains tax and 1.5% doc stamp. as long as he will sign the deed of sale, there should be no problem. see to it however that you need a geodetic engineer to delineate the specific area that you would like to get. the said 30sqm should not remain undivided or unspecified.

after the survey, the technical description of the specified 30sqm lot should appear in the deed of sale particularly in the portion where the property to be sold is specifically described with its boundaries and all.

donation would not be a good idea taxwise, because you would have to pay 30% donors tax if you are strangers as to each other.

how about barter?

sir , we do not intend to barter as we need to construct our house extension on the said 30sqm lot. also, we already have the LRA approved consolidation/subdivision plan with technical descriptions per lot. If we will execute a deed of sale, can we set the amount to zero pesos since there is actually no payment involved here? TY

for barter or exchange of properties, there are two sales involved. hence, you have to pay capital gains tax and dst for each transaction.

stalone rambo, you refer this case to a practicing lawyer in personal.

there is no deed of sale with a zero consideration. that zero consideration is no consideration at all. in our jurisdiction, the said zero consideration could be a ground for the rescission of your deed of sale for lack of cause or consideration(no consideration).

you might want to ask your lawyer about this.

if donation- 30% donors tax if donation to a stranger

if sale- 6% cgt, 1.5 dst

taxconsultantdavao wrote:

for barter or exchange of properties, there are two sales involved. hence, you have to pay capital gains tax and dst for each transaction.

stalone rambo, you refer this case to a practicing lawyer in personal.

there is no deed of sale with a zero consideration. that zero consideration is no consideration at all. in our jurisdiction, the said zero consideration could be a ground for the rescission of your deed of sale for lack of cause or consideration(no consideration).

you might want to ask your lawyer about this.

good morning sir. many thanks for the reply. In this case, we will just execute a deed of sale with amount nearest to the current zonal value of the property. thanks

i think you got the point without me telling it to you. good luck.

taxconsultantdavao wrote:

i think you got the point without me telling it to you. good luck.

thanks sir. God bless

if the sale is simulated since there is no consideration involved, the proper remedy is to invalidate the sale not an action for rescission. by the way, it is the donor who is going to shoulder for the 30% donor's tax since the donor and the donee are strangers to eACH other. the basis for the consideration of the property as the law now stands would be its fair market value. but it doesnt mean that you can no longer agree to a price lower to its FMV, since it is merely the basis

thanks atty man.

attyman is right when said that in simulated sale, the remedy is not rescission. i incorrectly used the word rescission.

attyman is also correct when he said that the donor will have to pay for the 30% donors tax. the tax is imposed against the donor.

attyman wrote:if the sale is simulated since there is no consideration involved, the proper remedy is to invalidate the sale not an action for rescission. by the way, it is the donor who is going to shoulder for the 30% donor's tax since the donor and the donee are strangers to eACH other. the basis for the consideration of the property as the law now stands would be its fair market value. but it doesnt mean that you can no longer agree to a price lower to its FMV, since it is merely the basis

thanks sirs attymman and taxconsultantdavao. We will avoid donors tax as this is far more expensive than the capital gains tax. If the property to be transferred is just a portion of existing lot, what is the best type of deed of sale can we use since we are going to get only the 30sqm of 124sqm lot? Thanks