BIR Revokes Ruling Issued to Build to Own Developers

tax 9

the market for condominiums has been good for most developers and we now see more and more investors taking profits for their investments.   an investment is only good after you get a reasonable profit from the money you put it and how long you waited.  but what happens when all of sudden, you get information that you’re not aware of which directly affects your return on investment ?  below is an article which you may find useful.
for those that bought a condominium from “Build to Own” developers specifically in Taguig, please be advised that there has been an issue on capital gains tax which you will have to shoulder. the Bureau of Internal Revenue revoked its earlier ruling  (BIR Ruling No. DA(C-322) 789-2009 ) exempting capital gains from all sales done.  take note that this ruling was dated july 1, 2010 and has affected a substantial amount of transaction in the area.
so what does this mean ? it means the seller is now liable to pay 5% withholding tax + 1.5% documentary stamps tax + 6% capital gains tax ( this is excluding any penalties as capital gains tax should normally be paid within 30 days from the date of notary ).
another issue is if you bought a property in taguig, take note that the City Treasurer of Taguig is charging City Tax also known as Business Tax that’s almost but a bit cheaper than Transfer Tax, this is normally for the account of the seller ( .5% of selling price ). if your residence is outside of taguig, your City Tax is about 50% cheaper. just thought i’d let you know as everyone hates surprises ! after all, what’s important to a seller / investor is what’s NET AMOUNT to him / her ? this business tax started in pasig, then applied to quezon city and is now being implemented in taguig. other cities to follow. you may verify this from the city treasurer’s office of the city where your property is located.
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best regards….

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