LOCAL TAXES
by Maya Bandolon-Cartojano, REC, REA, REB
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LOCAL TAXES
Real Property Tax Basic & SEF
Transfer Tax (TT)
Idle Tax (IT)
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NATIONAL TAXES
Capital Gains Tax (CGT)
Creditable Withholding Tax (CWT)
Value Added Tax (VAT)
Percentage Tax (PT)
Documentary Stamps Tax (DST)
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Local Tax
CWT, VAT or PT
Landowner
Annual: RPT
Sale: TT
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CAPITAL ASSET
Local Tax
Sale of Capital
Property
Transfer Tax
Lease Capital
Property
Sale of Ordinary
Property
Lease Ordinary
Property
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TAXATION
WORKSHOP
by Maya Bandolon-Cartojano, REC, REA, REB
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Workshop Question #1
Ms. Mina Malas sells a residential lot in General Santos City with a
floor area of 300sqm on cash with Selling Price of P5 Million. Ms.
Mina is not engaged in a real estate business. The proceeds from the
sale will be used for the retirement farm house and medical bills.
Below are the fair market value information of the real property.
Compute for the national and local taxes of this transaction.
Given:
1. Fair Market Value as determined by BIR (Zonal Valuation)
a. Land - P2,400,000 (8,000/sqm)
b. Improvement - P1,200,000
2. FMValue as determined by City Assessor (per latest TD)
a. Land - 2,100,000
(7,000/sqm)
b. Improvement - P1,300,000
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RELATED TAXES
NATIONAL TAXES:
Capital Gains Tax (CGT)
Documentary Stamps Tax
(DST)
LOCAL TAXES:
Transfer Tax (TT)
SELLING
REAL ESTATE
PROPERTY
Capital Property
(CGT & DST)
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The DST should be paid within 5 days after the close of the
month when the taxable document was made, signed, issued
or transferred
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When to pay
The deadline for payment is sixty (60) days from the date of the
execution of the deed or from the date of the decedents death.
Please note too that notaries public are required to furnish the
provincial treasurers with a copy of any deed transferring
ownership or title to any real property within thirty (30) days from
the date of notarization.
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Workshop Question #2
Ms. Mina Malas sells a residential lot in General Santos City
with a floor area of 300sqm on cash with Selling Price of P3
Million. Ms. Mina is engaged in a real estate business. The
proceeds from the sale will be used to purchase another
property that she will renovate and resell after a year.
Compute for the national and local taxes of this transaction.
Given:
1. Fair Market Value as determined by BIR (Zonal Valuation)
a. Land - P2,400,000 (8,000/sqm)
b. Improvement - P1,200,000
2. FMValue as determined by City Assessor (per latest TD)
a. Land - 2,100,000
(7,000/sqm)
b. Improvement - P1,300,000
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RELATED TAXES
NATIONAL TAXES:
Value Added Tax (VAT)
Creditable Withholding
Tax (CWT)
Documentary Stamp Tax
LOCAL TAXES:
Transfer Tax (TT)
SELLING
REAL ESTATE
PROPERTY
Ordinary Property
(VAT & CWT)
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1. The quarterly VAT Return should be filed and the tax due
should be paid on or before the 25th day of the month
following the end of each quarter using BIR Form 2550Q.
Eg. Tax on the Gross sales receipts (GSR) received in March must be paid and the VAT return must be filed not
later than April 25. But instead of the monthly return (BIR Form 2550 M) the quarterly return (BIR Form 2550 Q)
should be used and must also report GSR in January and February.
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RR16 2011
Residential lot
House & Lot
Monthly rent
Percentage tax
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Workshop Question #3
Ms. Mina Malas sells a residential lot in GenSan with a
floor area of 200sqm on cash with Selling Price of P3
Million. Ms. Mina is engaged in a real estate business.
Compute for the national and local taxes of this
transaction if payment is 20% downpayment and
balance in equal payments for 5 years.
Given: Fair Market Value as determined by BIR (Zonal Valuation)
a. Land - P2,400,000 (8,000/sqm)
b. Improvement - P1,200,000
2. FMValue as determined by City Assessor (per latest TD)
a. Land - 2,100,000
(7,000/sqm)
b. Improvement - P1,300,000
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RELATED TAXES
NATIONAL TAXES:
Value Added Tax (VAT)
Creditable Withholding
Tax (CWT)
Documentary Stamp Tax
LOCAL TAXES:
Transfer Tax (TT)
SELLING
REAL ESTATE
PROPERTY
Installment Basis
(VAT & CWT)
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Workshop Question #3
Ms. Mina Malas sells a residential lot in GenSan with a
floor area of 300sqm on cash with Selling Price of P3
Million. Ms. Mina is engaged in a real estate business.
Compute for the national and local taxes of this
transaction if payment is 20% downpayment and
balance in equal payments for 5 years.
Given: Fair Market Value as determined by BIR (Zonal Valuation)
a. Land - P2,400,000 (8,000/sqm)
b. Improvement - P1,200,000
2. FMValue as determined by City Assessor (per latest TD)
a. Land - 2,100,000
(7,000/sqm)
b. Improvement - P1,300,000
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Workshop Question #4
Ms. Mina Malas rents out her 6-door apartment in
General Santos City for P3,000 per room per month.
Compute for her annual national and local taxes
Given:
1. 80% occupancy rate
2. 90% collection rate
3. Fair Market Value as determined by BIR (Zonal Valuation)
a. Land - P2,400,000 (8,000/sqm)
b. Improvement - P1,200,000
2. Fair Market Value as determined by City Assessor (per latest TD)
a. Land - 2,100,000
(7,000/sqm)
b. Improvement - P1,300,000
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RELATED TAXES
NATIONAL TAXES:
Value Added Tax (VAT)
Creditable Withholding
Tax (CWT)
LOCAL TAXES:
Real Property Tax (RPT)
LEASING
REAL ESTATE
PROPERTY
Ordinary Property
(RPT, SEFT, VAT & CWT)
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3% P 388.80
12% P1,555.20
or
Annually
P216,000
43,200
P172,800
17,280
P155,520
P 4,665.60
P18,662.40
Hence Percentage tax only because monthly and aggregate yearly is less than threshold
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Workshop Question #4
A 1,000 sqm property located in General Santos
City with a 3-storey, 6-BR, 4T & B , and 4-car
garage residential building was sold for P25.0M.
Using the rule- of-thumb of building to land ratio
of 3:2, what is the value of the building?
Compute for the national and local taxes if the
selling price is higher than the FMV of BIR and
City Assessors.
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Workshop Question #5
In a sale of condominium unit following information were gathered
Value per Deed of Sale.. P3,00.000.00
Zonal Value of Condominium UnitP22,500/q.m.
Market Value of Condominium Unit.P1,500,000.00
Assessor Value of Land where the Condo unit is built.P2,500.00/sq.m.
Zonal Value Land where condominium project is built.P5,000.00/sq.m.
Floor area of the condominium unit sold .P150 sq.m.
Compute for the national and local taxes on the above transaction. If
this sale was by your realty firm thru one of your accredited
salesperson, compute the taxes to be paid by your realty firm.
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Workshop Question #6
Mr. Samson hired the services of a broker to sell his property.
The owner said he bought it at P6,300,000,00 and wants a 30%
gross profit. If you were a broker, at how much would you sell
the property? If you will be paid 5% commission, how much shall
be added to the selling price that the 30% profit of Mr. Samson
will not be affected? Compute for the national and local taxes on
the above transaction? Compute the national and local taxes of
the brokers realty firm if he sold the property himself. Compute
the taxes if he will share the commission with another licensed
broker..
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Workshop Question #7
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Workshop Question #8
A corporation owns two adjoining lots. Lot 1 with an
area of 1,000 sq.m. and Lot 2 with an area of 800
sq.m. Recently, it sold Lot 1 at P2,000/sq.m. with 20%
downpayment and the balance payable in 5 years at
the rate of P43,200.00 equal monthly amortizations. If
the corporation will sell Lot 2 at the same price and
terms as Lot 1, compute for the national and local
taxes
on
the
above
transaction.
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Workshop Question #9
A 3-hectare land was sold for P300/sq.m. and the seller
agreed to pay commission based on the following rate:
5% for the first p1,000,000.00; 4% for the next 1,
500,00.00; and 3% on the excess over P2,500,000.00.
Compute for the gross commission of the listing broker
and selling broker if they agreed to 40%-60% sharing in
favor of the selling broker. Compute for the national
and local taxes on the above transaction.
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