Jump to content
Sign in to follow this  
vguy

When selling a condo

Recommended Posts

vguy

I have someone wanting to buy a condo i have in cebu city.

does anyone know how capital gains tax works ,  my  net selling price is 2.6 million , how much roughly would i have to pay.

Agents always say they can adjust it and write down the selling price as lower for capital gains tax so you pay alot less. is this safe ?

Anyone sold a condo , anything else i need to be aware of ..... always unlpleasent surprises when dealing with condos i know

 

Share this post


Link to post
Share on other sites
Alfred E. Neuman

Supposedly the seller is supposed to pay for the capital gains tax, but this is the Phils. so the buyer will pay.

  • Like 1
  • Thanks 1
  • Confused 1

Share this post


Link to post
Share on other sites
Dafey
30 minutes ago, Alfred E. Neuman said:

Supposedly the seller is supposed to pay for the capital gains tax, but this is the Phils. so the buyer will pay.

Yes...but he'll ask that the reported price is much lower to lesson the tax amount.

Share this post


Link to post
Share on other sites
Flakes

Usually buying a condo is quicker then selling a condo.

Share this post


Link to post
Share on other sites
Flakes
2 minutes ago, RangerUp said:

Doesn't buying a condo include someone selling a condo?

Yes it does..

Share this post


Link to post
Share on other sites
Flakes
3 minutes ago, RangerUp said:

Buyer and seller, involved in the same transaction...

For me my buying process is almost always going faster then my selling process.

Share this post


Link to post
Share on other sites
Aerosick

We just sold one of our condos. In our CTS it states:

Capital Gains Tax and Real Estate Tax, shall be for the account of the SELLER/VENDOR;

Documentary Stamps Tax, Registration Fee, registration expenses, and all other miscellaneous fees and expenses shall be to the account of the BUYER/VENDEE.

  • Like 1
  • Thanks 1

Share this post


Link to post
Share on other sites
A_Simple_Man
11 hours ago, Aerosick said:

We just sold one of our condos. In our CTS it states:

Capital Gains Tax and Real Estate Tax, shall be for the account of the SELLER/VENDOR

But what happens if the Seller/Vendor does not bother to pay it?  Does a lien go against the property that the purchaser now "owns"?

Share this post


Link to post
Share on other sites
Davaoeno

I like to deduct the tax from the payment to the seller .  

  • Like 2

Share this post


Link to post
Share on other sites
Davaoeno
11 hours ago, Aerosick said:

We just sold one of our condos. In our CTS it states:

Capital Gains Tax and Real Estate Tax, shall be for the account of the SELLER/VENDOR;

 

Documentary Stamps Tax, Registration Fee, registration expenses, and all other miscellaneous fees and expenses shall be to the account of the BUYER/VENDEE.

And it is always best to put the split in writing- as it is in your case.  It is of course  impossible to negotiate anything different now that you have already signed it

Share this post


Link to post
Share on other sites
Aerosick
11 minutes ago, A_Simple_Man said:

But what happens if the Seller/Vendor does not bother to pay it?  Does a lien go against the property that the purchaser now "owns"

 

3 minutes ago, Davaoeno said:

And it is always best to put the split in writing- as it is in your case.  It is of course  impossible to negotiate anything different now that you have already signed it

My wife has known the buyer for 30+ years. We trust her completely!

Share this post


Link to post
Share on other sites
SkyMan
15 hours ago, Davaoeno said:

If it doesnt get paid at the time of sale the BIR will come after the seller .

I didn't think they came after anyone, just increase the fees and therefore a larger and larger lien on the property.

Share this post


Link to post
Share on other sites
Davaoeno
22 minutes ago, Aerosick said:

 

My wife has known the buyer for 30+ years. We trust her completely!

And that is always the best situation to be in.

Be careful- the BIR cgt has to be paid within 30 days after the date on the contract. If you miss the deadline the penalty is 25% plus 20% interest per annum. I missed the date once and the 25% penalty was 150000. Luckily I knew the buyer and I just paid the atty to do a new Deed of Sale . ( the BIR personnel actually recommended that I proceed that way)

  • Like 4
  • Thanks 1

Share this post


Link to post
Share on other sites
Davaoeno
35 minutes ago, SkyMan said:

I didn't think they came after anyone, just increase the fees and therefore a larger and larger lien on the property.

Yes- exactly !

40 minutes ago, Aerosick said:

 

My wife has known the buyer for 30+ years. We trust her completely!

And that is always the best situation to be in.

Be careful- the BIR cgt has to be paid within 30 days after the date on the contract. If you miss the deadline the penalty is 25% plus 20% interest per annum. I missed the date once and the 25% penalty was 150000. Luckily I knew the buyer and I just paid the atty to do a new Deed of Sale . ( the BIR personnel actually recommended that I proceed that way)

Share this post


Link to post
Share on other sites
Headshot
On 6/28/2018 at 5:49 PM, Davaoeno said:

It is common practice here to declare a lower amount to the BIR for the tax calculation. The BIR does have its own figure about what the price should be [called zonal value] which is the lowest figure that they will accept.

Is the "zonal value" the same as the assessed value for property tax purposes? If not, how do you find out what the zonal value is?

Share this post


Link to post
Share on other sites
Davaoeno
39 minutes ago, Headshot said:

Is the "zonal value" the same as the assessed value for property tax purposes? If not, how do you find out what the zonal value is?

The BIR has a book with all the zonal values listed.  They increased them substantially as of May 2017.

My wife bought a condo this year for 2.8M . The BIR had a zonal value listed for that condo project  of 3.2M and that is what she had to pay cgt on .

The only good thing was that BDO appraised it at 4M and offered to lend her 3 M ! lol

I do not know how local governments arrive at assessed values to determine property tax.

Edited by Davaoeno
  • Like 1
  • Thanks 2

Share this post


Link to post
Share on other sites
Headshot
59 minutes ago, Davaoeno said:

The BIR has a book with all the zonal values listed.  They increased them substantially as of May 2017.

My wife bought a condo this year for 2.8M . The BIR had a zonal value listed for that condo project  of 3.2M and that is what she had to pay cgt on .

So, how do you find out what the zonal value is? Go to BIR and ask? I don't live in a condo, and every house in my neighborhood was custom built. Though it is a subdivision superficially, there was never a so-called development with one contractor building everything.

1 hour ago, Davaoeno said:

I do not know how local governments arrive at assessed values to determine property tax.

I don't think that even the local governments know how they arrive at the assessed value. It's a mystery wrapped in an enigma.

Share this post


Link to post
Share on other sites
Davaoeno
8 minutes ago, Headshot said:

Go to BIR and ask?

yes

You might try asking a real estate broker . Usually the question only arises when a place has been sold 

Edited by Davaoeno
  • Thanks 1

Share this post


Link to post
Share on other sites
Buko Beach
On ‎6‎/‎30‎/‎2018 at 1:16 AM, Headshot said:

So, how do you find out what the zonal value is? Go to BIR and ask? I don't live in a condo, and every house in my neighborhood was custom built. Though it is a subdivision superficially, there was never a so-called development with one contractor building everything.

I don't think that even the local governments know how they arrive at the assessed value. It's a mystery wrapped in an enigma.

 

It's not a mystery. BIR has published an online zonal value for just about every barangay in the Philippines for well over a decade.

Ironically, the one place they have not included is the Spratly Islands, which if Malacanang had a sense of humor, should list the zonal value at 6 Billion php per sq/meter and send the tax bill to Beijing, just for giggles.

https://www.bir.gov.ph/index.php/zonal-values.html

 

  • Like 1
  • Thanks 1

Share this post


Link to post
Share on other sites
Forex

Does the condo title have to be in a Filipino's name or a corporation?

As I understand, a complex of condominiums have to have 60% ownership by Filipinos, therefore only 40% can be titled to a foreigner. However on re-selling the Filipino tilted condo, it can revert to a foreigner title. Is this correct?

Share this post


Link to post
Share on other sites
Davaoeno
15 minutes ago, Forex said:

Does the condo title have to be in a Filipino's name or a corporation?

As I understand, a complex of condominiums have to have 60% ownership by Filipinos, therefore only 40% can be titled to a foreigner. However on re-selling the Filipino tilted condo, it can revert to a foreigner title. Is this correct?

1.  Does the condo title have to be in a Filipino's name or a corporation?    NO

2.   on re-selling the Filipino tilted condo, it can revert to a foreigner title ?    Revert ? I doubt that it was previously owned by a foreigner

I have never heard of a case anywhere in the country where a foreigner was told that he could not own a condo because of the 60/40 rule .  

 

 

Share this post


Link to post
Share on other sites
Forex
2 minutes ago, Davaoeno said:

1.  Does the condo title have to be in a Filipino's name or a corporation?    NO

2.   on re-selling the Filipino tilted condo, it can revert to a foreigner title ?    Revert ? I doubt that it was previously owned by a foreigner

I have never heard of a case anywhere in the country where a foreigner was told that he could not own a condo because of the 60/40 rule .  

 

 

OK good advice. Cheers

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Sailfish Bay Fishing Charters

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy and Guidelines. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..