Real Estate Seminar and Review

Here are some quick notes about the Documentary Stamp Tax or DST:

• Accrues only upon FULL payment.
• DST on Sale = 1.5% of Tax Base
• DST on Mortgage
• Look at the amount of the mortgage.
• P20 for the first P5,000
• P10 for every P5,000 (or a fraction thereof) of the remaining amount of the mortgage (after you deduct the first P5,000)
• Still searching my notes…

Tax Base = compare the Selling Price, the Fair Market Value (as listed in the Tax Declaration Form prepared by the Assessor’s Office), and the Zonal Values of the BIR (pertains to the Land). Get the maximum amount. That’s the Tax Base.

Other Notes

• Since there is no payment in a Donation, there is no DST.
• Since there is no full payment yet in the early stages of an Installment Sale, you don’t compute for DST… yet.

When should you pay the DST?
You’ll find the answer in Tax Payment Due Dates

Tags: taxes

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As a real estate broker, you basically have to consider two kinds of assets when determining taxes which have to be paid to the BIR:

1. Ordinary Assets (pay Creditable Withholding Tax)
2. Capital Assets (pay Capital Gains Tax, 6%)

Ordinary Assets are:

• Assets acquired by the bank
• Depreciated
• Stock in trade
• Used in business
• Normally subject to VAT

What about your residential house? If you can’t describe it using the list above, then it’s a Capital Asset.

To-do: Find the rates used in computing Creditable Withholding Tax (CWT).

Want to check if you’ve correctly memorized the different CWT rates applicable to realty developers as well as to banks and other institutions not habitually engaged in real estate?

» See Creditable Withholding Tax.

Tags: taxes

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In the October 2008 Real Estate Brokers’ Exams, 615 out of 1,322 people passed.

In other words, about 46.5% passed.

The Top 5 Real Estate Brokers (as far as the October 2008 Real Estate Brokers Licensure Examination is concerned) has scores ranging from 79% to 86%.

Let’s make that Top 5 positions, since there were numerous ties among the 22 test-takers who landed in the Top 5:

1. Raphael Pulumbarit Reventar — 86.00%

2. Glicerio Maarat Avanceña — 82.00%
Larry Quebada Solis — 82.00%

3. Jose Mari Generoso Corota — 81.00%
Karen Lyn Sison Esdrelon — 81.00%
Jackie Crisologo Saguisag — 81.00%

4. Antonio Gerardo Emmanuel Mapa Achacoso — 80.00%
Allen Cecil Orara Amurao — 80.00%
John Arangorin Apatan — 80.00%
Fluellen Notar Besitan — 80.00%
Rhodora Lentejas Dapula — 80.00%
Maria Junio Dela Cruz — 80.00%
Delbert Lloyd Verano Fanuncio — 80.00%
Elena Natividad Dizon Gonzales — 80.00%
Mae Maria Co Ong — 80.00%
Roland Rhonnel Manalese Suarez — 80.00%
Richard Calaguas Trinidad — 80.00%

5. Isagani Mark Kintanar Atanacio — 79.00%
Caroline Chua Cu — 79.00%
Cathrina Myla Santos Lim — 79.00%
Walfredo Bueno Montañano — 79.00%
Melva Gloria Pino — 79.00%

Tags: board exams

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There are three basic kinds of Realty Tax:

1. Basic Realty Tax – 1% to 2% of the Assessed Value
(Provincial – 1%; Metro Manila – 2%)

2. Special Education Fund (SEF) – 1% of the Assessed Value
3. Idle Land Tax – not to exceed 5% of the Assessed Value

These taxes are paid to the Treasurer’s Office. Since those percentage values are fixed, you need to memorize them. The exam questions will not reveal those values.

There are other taxes related to Local Taxation.

There are other things you will need to consider:

• Transfer Tax (paid to Treasurer’s Office)
• Business Tax (depending on the location of the property)
• Registration Fee (paid to the Registry of Deeds)
• Cost of new Tax Declaration (paid to Assessor’s Office)

To-Do: Find out where the Business Tax is paid.

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Here is a quick summary of due dates for the payment of taxes related to real estate in the Philippines. This makes for a handy review for those who want to pass the Real Estate Brokers’ Exam conducted by the DTI.

DST – on or before the 5th day of the following month (based on notarization date).

CWT – on or before the 10th day of the following month (based on the proof of receipt).

VAT – due on the 20th day of the following month.

CGT – within 30 days from date of receipt.

Donor’s Tax – within 30 days from notarization date.

Estate Tax – within 6 months (180 days) from demise.

Additional Tip: Write the above data on a sheet of paper. The act of writing helps you remember. Please take note of the sequence: DST, CWT, VAT, CGT (5th, 10th, 20th, 30d). If you say it out loud, you’ll have an easier time remembering.

The act of reading (visual), writing (kinesthetic), and chanting/lecturing/rapping/singing (auditory) helps you learn things faster because you involve many types of intelligence.

BIR References

Please check the 2008 Regulations, particularly Section 4 of Revenue Regulations No. 4-2008 (PDF) [AMENDING THE VENUE FOR THE PAYMENT OF CAPITAL GAINS TAX, CREDITABLE WITHHOLDING TAX AND DOCUMENTARY STAMP TAXES DUE ON ONEROUS TRANSFERS OF REAL PROPERTIES OWNED BY TAXPAYERS CLASSIFIED AS LARGE TAXPAYERS PURSUANT TO REVENUE REGULATIONS NO. 1-98, AS AMENDED, THEREBY AMENDING FOR THIS PURPOSE PERTINENT PROVISIONS OF REVENUE REGULATIONS NO. 8-98.]

SEC. 4. TIME AND PLACE OF PAYMENT OF CREDITABLE WITHHOLDING TAX AND DST ON THE SALE, EXCHANGE OR OTHER MODE OF ONEROUS DISPOSITION OF REAL PROPERTIES CLASSIFIED AS ORDINARY ASSETS. —

Creditable withholding taxes deducted and withheld by the withholding agent/buyer on the sale, transfer or exchange of real property classified as ordinary asset, shall be paid by the withholding agent/buyer upon filing of the return with the Authorized Agent Bank (AAB) located within the Revenue District Office (RDO) having jurisdiction over the place where the property being transferred is located within ten (10) days following the end of the month in which the transaction occurred subject, however, to the rules prescribed by Electronic Filing and Payment System(EFPS) regulations in case the taxpayer is an EFPS taxpayer.

The corresponding documentary stamp tax return shall be filed within five (5) days after the close of the month when the taxable document was made, signed, accepted or transferred, and the tax thereon shall be paid at the same time the aforesaid return is filed with the Authorized Agent Bank (AAB) of the RDO having jurisdiction over the place where the property being transferred is located.

Provided, however, that in cases where the seller thereof is a large taxpayer, the venue for the filing of the creditable withholding tax return (BIR Form 1606) and payment of taxes due thereon as well as the DST Return (Form No. 2000-OT) and DST due thereon shall be with the AAB of the concerned LTS Office where said large taxpayer-seller is registered.

In the case of real estate development projects under a joint venture agreement where one of the co-venturers is a large taxpayer and the other is a nonlarge taxpayer, the venue for the payment of taxes accruing to the sale or onerous disposition to third parties of their owned respective portion of the real estate shall be in accordance with the provisions herein prescribed. Thus, the taxes due on the sale or disposition of the shares/units allocated to the co-venturer which is a large taxpayer, shall be paid and the corresponding returns thereof shall be filed with the AAB of the concerned LTS Office where said large taxpayer is registered. On the other hand, the returns required and the taxes accruing on the sale or disposition of the units allocated to the other co-venturer that is a non- large taxpayer shall be filed and paid with the AAB of the RDO having jurisdiction over the place where the property being transferred is located.

This above rule on the venue in the filing of the returns and payment of taxes on onerous transfers of real estate shall likewise apply to taxable foreclosure sales.

Tags: CGT, CWT, DST, due dates

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Here are the requirements that you need to submit to the DTI if you want to take the Real Estate Brokers’ Exam:

1. Signed Application Form (get the form from the DTI)

2. Original and photocopy of your Transcript of Records or your Diploma.

NOTE: I heard that you can also submit your Certified True Copy of Grades, but the DTI will retain the original copy or certified copy. In the case of Transcript of Records, the DTI will retain the photocopy and return to you the original copy.

3. Two (2) pieces, passport size ID photos, with white background, and complete name tag.

4. Cedula (Residence Certificate)

5. Window envelope with stamp (from what I’ve heard, the regular mail costs P7.00)

6. Photocopy of the “Certificate of Completion” from the accredited CRESR provider.

7. Examination fee of P250.

NOTE: As far as the May 31, 2009 exam is concerned, the deadline for securing your exam permit at the DTI is on May 8, 2009 (subject to change, so please just register early.)

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There are a lot of people who want to become licensed real estate brokers in the Philippines. You’d be surprised at how jampacked all these comprehensive real estate seminar and review (CRESR) sessions can be.

The main challenge of reviewees, however, is TIME. What with the traffic, our hectic full-time jobs… when will we have time to review? Also, it can get quite lonely when you struggle with a concept but there’s no one nearby to help you out.

We’ll be sharing with you some of the key things we’ve learned. Please remember, however, that you will need to formally attend a review (course runs for 24 hours) conducted by a DTI-accredited service provider.

Better do it this year, because I hear that next year, the 24-hour seminar requirement will be replaced by a four-year college course requirement.

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