Array
Money Matters

Taxes That Need To Be Paid When Purchasing A Property

Bookmark this handy guide for your reference

Shares
Original Article: Tara FT Sering Photography: Pexels.com

Buying a home isn’t as simple as choosing a property and making a downpayment. It involves careful planning and doing thorough research before taking the big leap. Aside from enlisting the help of a broker or consulting with a real estate professional to learn more about the current market condition, it’s important that you familiarize yourself with the taxes and fees that need to be paid when purchasing a property. The payment of taxes must be dealt with once you’ve settled on a unit, the price, and the terms. Here fees that you might encounter:

  • Capital Gains Tax (CGT)

The seller usually shoulders this, and it’s six percent of the selling price or the fair market price, whichever is higher. (The fair market price is also known as the zonal value, which varies from location to location, and is set by the Bureau of Internal Revenue.) For instance, if your condo’s selling price is P2 million, but the BIR set the zonal value at P3 million, then the CGT will be computed based on the P3 million.

  • Documentary Stamps Tax

This is usually shouldered by the buyer—you. It’s 1.5 percent of the selling price or the fair market price, whichever is higher.


ADVERTISEMENT - CONTINUE READING BELOW
  • Transfer Tax

Again, something you pay for. This is paid to the City Treasurer, and the rate is dictated by the Local Government Unit to which your property belongs. It’s usually, .05 percent of the selling price.

  • Registration Fee

The hits keep coming: You usually pay for this. The rate is generally almost half the Transfer Tax, depending on which price bracket your condo belongs to. You’ll find this tax bracketing at the city’s Registry of Deeds.


When the taxes and other matters haven resolved, a contract will be drafted by your broker. Remember that before you sign, you need to double- and triple-check the terms you’ve agreed on with the seller. Don’t hesitate to ask questions and clarify some points, if needed.

For a step-by-step guide you can follow when buying a property, click here.

Read the original article (You condo it!) in the January-February 2004 issue of Real Living Magazine. Download your digital copy of Real Living on the Real Living App. Log on to summitnewsstand.com.ph/real-living for more details.

ADVERTISEMENT - CONTINUE READING BELOW

More on Realliving.com.ph

Shares

Latest Stories

How to Survive If You Only Have One Bathroom at Home

Here's how you can make the small, shared space clean and functional

A Tiny 21sqm Studio Unit Undergoes A Needed Makeover

Interior designer Kat Villanueva-Lopez worked with clever storage solutions, multifunctional furniture, and sleek finishes to turn the cluttered space into a haven for a family of three

Done with KonMari? Here's Where You Can Donate Old Clothes and More

Make someone else happy by donating your pre-loved items!

7 Ways to Use Hooks Around the House

From organizing the kitchen to displaying your favorite plants, your pack of hooks can go a long way!

How to Correctly Clean Kitchen Counterops and Other Surfaces Your Child Touches

Your kitchen countertop is one of the dirtiest surfaces at home

Start The Year Right With These Decluttering Tips

Achieve a cleaner and brighter home with these handy hints

Sagada's Newest Art Hub Is a Sanctuary in the Mountains

It is called the Dogo Siwang Art Hub

You'll Feel Right at Home in This Hotel in Pasig City

We're definitely going back!

Welcome Prosperity and Positive Vibes Into Your Home with Feng Shui

Improve the positive energy in your home with these friendly reminders

Kids Can Enter Ayala Museum For Free This Weekend

Don't miss out on this!

Turn Your Bedroom Into A Comforting Space with These Colors

Sweet, calming, and neutral colors are our top picks!

Your Ultimate Guide on Choosing The Right Kitchen Tools

Shopping for appliances is really about making the right decisions
Load More Stories

Get inspiring design ideas and handy hints.
Subscribe to our newsletter now!