Best Posts in Thread: Need some advice regarding property sale

When we came here 10 years ago and bought a property to save us having the paper work hassle we agreed a price with the seller that included them to pay all the fees and capital gain tax, BIG mistake, the title was never coming and the seller was blaming their "broker" (i use that term loosely) for not doing what they paid them to.
Long story short and it was an excruciatingly long story we had to pay 10,000php to get it sorted, not a huge amount and the time wasted was more annoying.
When we came to sell that property we insisted the buyer take care of all transfer and capital gain transactions as once we had the money they could take as long as they want to get the title.
The next place we bought we settled on a price that included us paying everything even the brokers 5%, all went no problem.

 

From what I understand, the law in this country states that the payment of the 6% capital gains tax regarding the sale of a property is an obligation for the seller.

I also understand that in most cases this tax is paid by the buyer. However, if the seller insists on fulfilling that obligation, so the buyer negotiates a buying price that takes this into account, then how is the transfer of the title ensured?
What I mean is, if the seller just "forgets" to go pay that tax, then I assume that will make the transfer of the title impossible? What assurances if any can be written into the deed of sale or otherwise?

So, if the seller insists on paying the Cap. gains tax, and the buyers' lawyer says: then we'll run into trouble with the transfer of the title, then who's playing some game?
Seller, or lawyer, or both?

I understand that tax avoidance is probably as big an issue here as elsewhere, and without that explanation the whole thing doesn't make sense to me, but if someone could advise how things can or can't work here then I'd be grateful.

Maybe I'm seeing trouble looming where there is none, all I know is that I'm used to settling real estate transactions in a totally different way, where payment is made by the buyer into an escrow account at a certified notary, who pays all taxes and other stuff (like a mortgage bank) and assures that all paperwork is fine, before paying the remaining money to the seller. The (lack of) system here is totally alien to me.

 

I used Atty Mike Miguel when I sold my house and lot after I had moved back to the US. I highly recommend you use an attorney with experience in this to make sure every "I" is dotted and every "T" is crossed.

 

My research and experience from a few years ago says you're right. Capital gains tax is the seller's responsibility but as with most things, it's negotiable. I think what sometimes happens is that the seller does not pay the tax and the title can't be transferred until it's paid, usually by the buyer at that point.
****This is not legal advice and should not be taken as such.

I suggest talking to Atty Michael Miguel. He's very straightforward and reasonably priced.
Unit 2E, 2nd Floor, Yala Bldg., South Road, Calindagan (beside Robinsons Mall) 6200 Dumaguete City, Philippines

 

Basically it is Buyer beware

 

One sales agreement had a list of all the assorted fees and who was responsible to pay the fee. All the fees payable by the vendor were deducted from the money paid to the vendor. The buyer made the payments to the assorted government agencies so everything got done.
Some buyers have been known to become total a$$hats once they have their money. Consider having a clause added requiring the seller to provide all necessary assistance to complete the sale FREE OF CHARGE.

Atty Miguel is one of the most reliable lawyers I know of.

 

The consensus seems to be to accept the capital gain tax as the buyers responsibility and factor this into the amount paid for the property.

 

I forgot to do as I promised, my apologies.
I tried to reach agreement in several ways, but even my simple proposal
- to withhold the sum of the cap. gains tax from the agreed price until such time as the seller hands the buyer the BIR receipt for said tax while in the event this would not happen before date such and such the buyer would be automatically authorized to go to the BIR and pay the tax themselves -
was shot down.
Ultimately I walked away from the deal because of this issue (pity, I would have really liked to buy the house).