You have finally bought or sold your real estate property, and you would need to know not only the documents needed but also, the associated fees and taxes on transferring the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT). This will help you become aware of the probable cost to make informed decisions and ensure a successful transaction.
You may check out the documentary requirements for the Transfer of Title.
Fees & Taxes on Processing Title Transfer
BIR Zonal Value
First, you must identify the BIR Zonal Value of the property. It is important to know the zonal value because it will determine the amount of tax that you need to pay when either selling or buying a property. Take note that the year to input must be updated based on the used zonal year.
However, there are circumstances where the Fair Market value is higher than the Zonal Value. In this case, you will be using instead whichever is higher. The fair market value represents the price at which a property would sell on the open market.
Capital Gains Tax
The Capital Gains Taxis a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines. It is computed by multiplying6%by the gross selling price (total value either zonal or fair market value).
Documentary Stamp Tax
The Documentary Stamp Tax is a tax imposed on the documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto. The tax rates for documentary stamp tax depend upon the document to be stamped and its corresponding taxable base. For real property transfer, however, the documentary stamp tax is 1.5%.
Transfer Tax
It is imposed by the local government units (LGUs) on the transfer of ownership or title of real property. The amount of tax payable depends on the location where the property is located. The typical rate is 0.50% (if it is located in the provinces) or 0.75% (if it is located within Metro Manila)of the gross selling prior fair market value, whichever is higher.
Land Registration Authority (LRA) Fees
These are the costs associated with recording and documenting land ownership and transactions in the public registry. This includes the registration fee, Information Technology (I.T) fees, and all other expenses required to transfer the ownership or real property title.
Take note, that the registration fee amounts up to P8,796.00 if the selling price does not exceed P1,700,000.00. However, if the selling price exceeds the amount of P1,700,000.00, an additional amount of P90.00 for every P20,000.00 will be added to the fee of P8,796.00.
Sample of Computation of Transfer of Title Tax/Fees
Need further information and assistance in the Title Transfer process? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+63) 917 149 2337 or send an email to info@filedocsphil.com or simply message us through the live chat for more information.
