Title transfer for undeveloped land and paperwork

[Snowy79]

I was also advised to up the capital gains price on my condo purchase by a good real estate agent that I know. She assured me if it was too low when I come to sell it could cause big issues. The BIR look at other land deals in the area and sometimes compare. If you put down a pretty low value they'll get you.

In my case I paid 3.5M for my apartment. The seller wanted to put 2m on the deed of sale so save tax but I knew the going rate was about 5 to 7m for similar apartments. The land value was only about 120,00 php. BIR states it's the land value or selling price whichever is higher. I ended up offering 1/2m php for fixtures and fittings then 3m for the apartment. I put the full 3m down on the deeds.

If they query there's plenty of furniture, beds, televisions and even an antique carpet to cover the 1/2m peso.

 

[Jack Peterson]

5 hours ago, Snowy79 said:

If they query there's plenty of furniture, beds, televisions and even an antique carpet to cover the 1/2m peso.

BIR are just not interested in Internal stuff just Lots, Bricks and Mortar Please Do not lets us get into an avoidance situation 

[Snowy79]

1 hour ago, Jack Peterson said:

BIR are just not interested in Internal stuff just Lots, Bricks and Mortar Please Do not lets us get into an avoidance situation 

All above board. The seller was moving to the UK and said I could have everything inside the apartment thrown in. I'd sold my house in the UK under similar circumstances and the solicitor in the UK split the total into 2 sums which brought the house price into the lower stamp duty rate.

I merely asked the attorney to do the same thing and he agreed it would be a good idea as I wasn't avoiding the capital gains as the apartment could be sold for less without including the goods. 

Most properties tend to sell for way above their value as land prices and the bricks and mortar are highly inflated due to foreign interests anyway. It's common for land that's valued by BIR at 200 peso per sqm selling for over 2,000 peso per sqm to foreigners.

[Jack Peterson]

11 hours ago, Snowy79 said:

I'd sold my house in the UK under similar circumstances and the solicitor in the UK split the total into 2 sums which brought the house price into the lower stamp duty rate.

 That is what I was getting at, I just cannot see a PI. BIR office accepting this and I can't see a lawyer here really knowing enough to split the package so in reality you are back to square one, House and Land, part 2 Furniture, fixtures and Fittings that will change over time and have to be reassessed, I just am not sure the BIR will want to know about this Interior stuff JMHO 

[bigpearl]

48 minutes ago, Jack Peterson said:

 That is what I was getting at, I just cannot see a PI. BIR office accepting this and I can't see a lawyer here really knowing enough to split the package so in reality you are back to square one, House and Land, part 2 Furniture, fixtures and Fittings that will change over time and have to be reassessed, I just am not sure the BIR will want to know about this Interior stuff JMHO 

Agree Jack and while Snowy may be right in his particular circumstance from my perspective/observations it matters diddly, the fixtures and furniture don't come into the equation as far as BIR are concerned. Possibly in Snowies situation the valuation of the furniture offset the purchase price by 500k and submitted a purchase price of 3M pesos. At the end of the day The BIR are not stupid and know the value of land, house or condominium and whether or not the land is agricultural commercial or residential etc. If they value higher then Snowy can object and mediate, though time consuming can save dollars if successful.

Capitol Gains Tax and Documentary Stamp Tax are based on land and building valuations accessed/known by them, not what is in a contract,,,,,, going through that at the moment because of ill advice for the last 2 months, again buyer beware. seller also. There is also the registration fee and transfer fee and that is based on BIR's ONNET computation sheet can affect the total outcome but smaller amounts.

Enjoy your Condo Snowy and hope you never suffer our lot to date.

Cheers, Steve.

[Snowy79]

I've already confirmed with the BIR and other owners and also with my friend who is a real estate agent and good friends with the VP of DCMI who own the resort. That's why I increased the price I reported to BIR. The seller was looking for me to put 2m down. On advice I upped it to 3m. The purchase price was 3.5m including furniture etc.

I agree 100% if I bought the apartment only and put down a low figure I'd be asking for trouble down the line as confirmed by my friend.