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Philippines Government Accusations

Discussion in 'Off-Topic Forum' started by PatO, Aug 25, 2021.

  1. Pompolino

    Pompolino DI Member Showcase Reviewer

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    The 6% Capital Gains Tax is imposed on the vendor of the property and is payable 30 days after the date of sale or quite significant penalties apply and continue to apply until it is paid. However, the smart advice is that in the negotiation this is agreed to be paid by the purchaser (and obviously the purchase price to reflect this) to ensure that the tax is actually paid and the title can actually transfer - as no transfer can occur whilst the tax is unpaid.
     
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  2. Rye83

    Rye83 with pastrami Admin Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Right, so you aren't taxed twice as was seemingly implied. It is the seller's legal responsibility to pay but in reality it is the buyer that pays.
     
  3. cabb

    cabb DI Forum Patron ✤Forum Sponsor✤

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    In my experience, the selling price that is told to the BIR is different than the actual selling price. This helps in two ways by reducing the tax on the selling price and also the property taxes for the new owner. It's probably a good thing that they don't have property appraisers.
     
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  4. charlyB

    charlyB DI Senior Member

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    If you are referring to my comment then i cant see where i implied that you are taxed twice.
    My comment is about the fact that you can be taxed on a loss by a tax that is called GAIN.
     
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    Last edited: Aug 28, 2021
  5. charlyB

    charlyB DI Senior Member

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    I don't know if they call them property appraisers but the BIR have people that check the zonal value of the property and if the price you tell them is lower then they make you pay the zonal value with a penalty on top.
     
  6. Dutchie

    Dutchie DI Senior Member Showcase Reviewer Veteran Army

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    Actually, when you think about it, it would be much better if there would be no shenanigans with the tax base, with regard to the tax on property sales (cap gains tax is a wrong and bad name for this tax) and with regard to the city property tax.
    For one, the practice of making a fake deed of sale for tax purposes instills the notion among property owners and buyers that it's ok to cheat for personal gain. In my perception, this is one of the basic causes of corruption ruining this country.
    Second, property taxes are a substantial part of the funding for local government. diminished tax income means less options to improve services (fire brigade, garbage collection, road improvement and maintenance, whatever we expect from local government).
    Third, if the property tax on owning property would be based on realistic values rather than some imaginary much too low value, then it would be a lot less attractive for people to hold on to empty houses and unused land. I'm thinking the demand/supply balance in the property market would shift significantly (more supply), and transaction prices would come down so more people could afford to buy a lot and build a house.
     
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  7. cabb

    cabb DI Forum Patron ✤Forum Sponsor✤

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    True, but last I looked zonal values were generally really low.
     
  8. cabb

    cabb DI Forum Patron ✤Forum Sponsor✤

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    With respect to land transactions, many times taxes have not been paid in years, so when you go to buy and subdivide because you aren't buying the whole property, someone is on the hook for bringing the taxes current. I think that's why many deals are done as deeds of sale, but the official title is never processed. With the price per sq meter these days, I'd bet there are millions to billions of tax revenue that isn't being paid and when it is paid, it is paid at the zonal value.
     
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