Have Any Questions On Real Property / Condos ?

[mkcl8888]

If you want a safe investment in a condo unit, buy a unit that's already been constructed rather than buy a condo in its pre-selling stage wherein you risk that it won't finish or construction gets delayed. other condos also won't follow the promised floor area that was used in their marketing brochures during the pre-selling phase. i have heard of titling problems too because the land was mortgaged in a bank so the developer can't issue titles to unit buyers. worse, the land could be foreclosed or in a litigation. my point is, it's better to buy a finished product rather than promises! i even have a few friends in cebu who are selling their constructed condo units almost at break-even coz they're in a hurry. this is a good opportunity for bargain hunters!

[Dave Hounddriver]

If you want a safe investment in a condo unit

i even have a few friends in cebu who are selling their constructed condo units almost at break-even coz they're in a hurry

Now to me that is more like a purchase than an investment. When you buy something and hang onto it for years and then have trouble selling it at a break even price then that is not an investment.

[JJReyes]

Philippine real estate tax question.

In the United States, you pay taxes after selling a property, assuming you made money. If there was a loss, there is no tax liability except maybe the payment of a small amount such as a conveyance tax. I heard that in the Philippines the Bureau of Internal Revenue collects a 6% capital gains tax based either on the selling price or fair market value, whichever is greater. They don't care if you made a profit or loss from the transaction. Is this true?

[FlyAway]

Philippine real estate tax question.

In the United States, you pay taxes after selling a property, assuming you made money. If there was a loss, there is no tax liability except maybe the payment of a small amount such as a conveyance tax. I heard that in the Philippines the Bureau of Internal Revenue collects a 6% capital gains tax based either on the selling price or fair market value, whichever is greater. They don't care if you made a profit or loss from the transaction. Is this true?

"Fair market value" good one there. Now who gets to determine that? I have not seen any sort of Appraisal / Home inspection service there in Philippines.

My sister in law has a condo in Fort Bonifacio. It was purchased under her brothers name. She was the one making all the payments on the place until it was fully paid off. Just a few months ago it was transferred solely into her name. BIR hit her up for 73,000 peso's in taxes.

[Dave Hounddriver]

They don't care if you made a profit or loss from the transaction. Is this true?

Yes. they base the tax on their computed value of the property or the same price, whichever is more. It is more of a property transfer tax.

In the same way, if you put money in a savings account they deduct something like 1/3 of your interest as income tax. You do not get to deduct any losses.

Similar rules for rental income but people often tend to evade that one. Its harder for them to track.

But all these taxes are what keeps the wheels turning here.

[wolf larsen]

They don't care if you made a profit or loss from the transaction. Is this true?

Yes. they base the tax on their computed value of the property or the same price, whichever is more. It is more of a property transfer tax.

In the same way, if you put money in a savings account they deduct something like 1/3 of your interest as income tax. You do not get to deduct any losses.

Similar rules for rental income but people often tend to evade that one. Its harder for them to track.

But all these taxes are what keeps the wheels turning here.

Yes, the government takes 6% "capital gains" on top of the 1.5% Documentary stamp tax, 0.5% transfer tax, and 0.25% registration fee. The total take is 8.25% of the selling price and has nothing to do with what it was bought for. It's one of the reasons owners hang onto their property for a long time and refuse to sell unless it's appreciated significantly.

A lot of transactions have an official price stated in the deed to sale and a higher price agreed upon by the parties to minimize the taxes.

[wolf larsen]

If you want a safe investment in a condo unit, buy a unit that's already been constructed rather than buy a condo in its pre-selling stage wherein you risk that it won't finish or construction gets delayed. other condos also won't follow the promised floor area that was used in their marketing brochures during the pre-selling phase. i have heard of titling problems too because the land was mortgaged in a bank so the developer can't issue titles to unit buyers. worse, the land could be foreclosed or in a litigation. my point is, it's better to buy a finished product rather than promises! i even have a few friends in cebu who are selling their constructed condo units almost at break-even coz they're in a hurry. this is a good opportunity for bargain hunters!

I don't think that applies if you buy from the major developers which are Megaworld, Ayala, and DMCI. But tbh, I think all their buildings are overpriced.

[Thomas]

Do you need a lawyer to check the paper when buying a property? I'm confused about the steps in the process. I'm guessing it's like this:

Buyer issues offer agreement

Seller signs offer agreement

Buyer pays agreed amount

Seller and Buyer sign deed of sale in front of witnesses and have it notarized

Seller and Buyer go together to BIR to pay Captial gains, Transfer tax, Documentary stamp tax, and Registration

Seller and Buyer take documents to Registry of Deed to initiate transfer of title

Not so tempting to pay all that early :)

I have heared several warnings about sellers don't pay the tax, then officials forcing the buyer to pay that too to not get trouble.

Any other solution to be sure seller will do all the steps?