In the past few years, a lot of previous and potential clients would ask about the expenses on the sale of a property like taxes paid when undergoing real estate transactions from acquisition to transfer of real properties and we have included them in this article for everyone's information in doing transactions for real estate properties.
Capital Gains Tax or Creditable Withholding Tax for corporations - 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. Capital Gains Tax is six percent (6%). For corporations, it is called creditable withholding tax and is similar to capital gains tax. Payment of capital gains tax is one-time only with BIR and is usually shouldered by owner / seller;
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. Documentary Stamp Tax is 1.5% of the selling price of the property;
Transfer Tax - This is paid to the local treasury of the municipality or city where the property is located. Computation of transfer tax may vary from different factors like size of property, assessment value and the city, municipality or province where it is located;
Registration Fee - The fee may vary on the computation parameters established by Register of Deeds. They may have an actual matrix available there but they will make adjustments in the computation of the actual property for registration purposes into one's name. It is better to have it computed after paying to BIR and the city / municipal and provincial government where the transfer tax was paid;
Other Miscellaneous Fees - This could be the broker's professional fee if you have hired the services of a licensed real estate broker to represent you on your behalf in marketing or selling the property, notarial fee from lawyer's legal services in signing and notarizing documents for court, for BIR use or others uses. A broker's fee may vary from the size and amount of the property sold. There is an established industry figures but it is debatable as of this time.
With the ongoing pandemic, need help in this tedious documentation process of transferring of ownership one's real estate properties? One can avail of our services by getting in touch with us at our website's contact page.
C. F. Baluyut Realty provides best real estate properties in Pampanga and other parts of Central Luzon. Covers wide ranges of properties from residential, commercial, industrial and agricultural properties for sale.
Photo Credits: from
Comprehensive Real Estate Review and Seminar Handbook (2015) - REBAP
About the Writer
CRB Benedict Baluyut is a professional real estate broker, real estate appraiser and associate of C. F. Baluyut Realty. He is currently the Vice President for External Affairs, Real Estate Brokers Association of the Philippines, Inc. (REBAP) - Pampanga Chapter. You can get in touch with him at https://www.cfbaluyutrealty.com.
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