1. Capital Gains Tax - is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale.
2. Land Tax - OWNERS OF land and buildings have to pay real property taxes annually. Taxes are a percentage of the property’s taxable value. Taxable value is computed by multiplying a land or building’s Fair Market Value (FMV) to its Assessment Level. Both the FMV and the
Assessment Level are based on an ordinance passed by the Sangguniang/City Council. The City Assessor’s Office submits to the Sangguniang a new Schedule of Fair Market Values every 3 years. Real property tax payments are made at the Land Tax Division of the CTO. Taxpayers may choose to pay on an annual or quarterly basis. Discounts are given to those who pay in advance and those who pay on time.
3.(TCT) - Transfer Certificate of Title
The Payment of Capital Gains Tax and Land Tax is depending on the Agreement written in the Deed of Absolute Sale, it may be the VENDEE (YOU) or the VENDOR (Seller) who will pay for it, kindly review your Deed of Absolute Sale or Contract of Sale.
Here are the Steps to do after Full Payment and Execution of Deed of SAle:
Register the Deed of Absolute Sale with the local office of the Registry of Deeds (RD) managing the jurisdiction of your property’s location. The Deed of Sale is a document showing legal transfer of real property ownership. This is officially recorded at the RD after paying the documentary stamp, transfer tax and registration fees.
Request for a certified true copy of the seller's title to make sure that the title is clean and there are no legal issues to be concerned of prior to the transfer of the title to your name. This also avoids the hassle of having to pay a seller without assurance that the property you’re buying can really be legally yours.
Go to the BIR Regional District Office (RDO) that manages your property's location. Fill up the forms and pay the applicable taxes including the documentary stamps and the capital gains taxes. Ideally, the documentary stamps and capital gains taxes must be paid on or before the 10th day of the month following the notarization of the Deed of Sale. If you go beyond this schedule, expect some penalties and surcharges.
The seller pays the capital gains tax and any unpaid real estate taxes due (if any). The buyer pays the cost of registration including the documentary stamps tax, transfer tax and registration fees. While these are the standard sharing of expenses practiced in the Philippines, buyers and sellers may have their own mutual agreement on how to share the expenses.
Get the Certificate Authorizing Registration (CAR). This document authorizes the RD office to effect the transfer of title to your name.
Go to the City or Municipal Assessor's Office. Ask for a certified true copy of the latest Tax Declaration for the property. This document is needed for the RD’s assessment of your Transfer Fees.
Pay the Transfer Fees at the City/Municipal Government office. After which, you need to go back to the RD to show your Official Receipts and the CAR. Upon acceptance of these requirements, there is a turnaround time of about two weeks to one month for the new title to be issued under your name. The RD shall give you the Owner's Duplicate of Title of your new TCT.
Home
