There are still other factors that these future homeowners must consider, once they decide to invest in condo living. These include legal papers, transfers, titles, miscellaneous, and most importantly, taxes. It is, perhaps, the most crucial part of moving and purchasing a new home, but such hassle will fade away once they see the actual product of their hard-earned labors
As many may have known, taxes are one the most crucial parts of adulting. Aside from being intricate, a single and simple mishap can lead to bigger problems. So, as early as now one must learn the responsibilities, the taxes, before finally buying that condo, may it be a pre-selling condo, or a ready for occupancy condo.
The main question “What are these taxes that are needed to be settled and paid” looks like it has a simple answer, but not. For the people who currently seek properties and are reading, lucky for all of you! Here is a brief yet helpful guide on which and what not to think in terms of organizing the taxes in buying a condo.
There are four different types of taxes that a homeowner must be aware of (which will be further discussed later) but in understanding it completely, here is a guide that must be kept in mind especially for property seekers:
Zonal Value literally means a value of a specific area (a zone). In the Philippine setting, the Institution that keeps an eye on this is the BIR (Bureau of Internal Revenue). Though they do not provide an exact market value, It helps the City Assessor’s Office, Register of Deeds, and the BIR itself in assessing and computing the taxes due for properties.
For example, the value of tax of a condo in Manila might be different from a condo in Baguio - thus, the zonal value helps predetermine the needed amount that one must prepare in buying a condo or property.
Fair market value
Fair market value is just simply the amount of the seller that they are willing to offer to a particular investor. In other words, this is the value of the exact same offer.
These two terms are commonly the basis in computing some additional fees and taxes.
Basic Taxes in the Philippines
Documentary stamp tax
The Documentary Stamp Tax (commonly known as DST) is fees that are charged on the documents, instruments, loan agreements, and papers that prove the acceptance, assignment, sale, or transfer of an obligation, right, or property. In simpler terms, every document or agreement that is needed for verification, signing, through the virtue of “stamping”, has an accompanying fee. Such tax is commonly applied on the Deed of Absolute Sale executed between the seller and buyer as well.
To be more intricate, DST is the 1.5% of the sales price, zonal value, or fair market value, whichever is highest. To simplify this, a two-million-worth condo in Manila has 30,000 DST.
If DST is 1.5% of the sales price, Transfer tax rates vary from 0.5% to 0.75% of either the zonal value or the total selling price of the property (whichever is higher) and depending on the place where the property is actually located.
But what is this for? Transfer tax is used in terms of transferring ownership of a real estate property either through sale, donation, inheritance, or the like. So, in buying a real estate property like a condo or an apartment, such tax must be included on the buyer’s checklist.
Title Registration fees
Title Registration fee on the other hand pertains to the fees that are paid in the process of registration of a deed of sale, a title, any instrument, order, judgment, or decree, that changes or transfers the right of ownership.
For example, if a property seeker bought a condo in the Philippines, he/she is required to pay an amount to declare that such property is indeed owned by him/her - this is through a certificate of title. To achieve a swift and smooth transfer, the apparent homeowner must make sure to set aside an amount of money to cater to the process.
Real Property Tax
Finally, Real Property Tax (RPT). This property tax must be paid annually which includes lands, houses, buildings, and machinery. This is essential since this is where the LGUs accumulate budget from external sources which will be eventually used for community building.
The RPT rate varies depending on the location; either within cities or municipalities (computation goes back to the Zone Value and Fair Market Value). Commonly, Metro Manila and other developing cities have a 2% RPT rate. Meanwhile, provinces and municipalities dwell on the 1% RPT rate.
Having a condo in the Philippines is not just an investment but also a dream especially for those who find condo living more comfortable, productive, and efficient. It is also the preferred place for students, employees, and even starting families since almost all of the condos in the Philippines are located within a city, close to the city, and even being a city in itself by building a community with friendly neighborhoods.
Speaking of loud and lively cities, Manila is no doubt one of the prime. The capital city is not only the center of economic and commercial development, but also houses a big chunk of Filipinos coming from neighboring cities, nearby provinces, and most especially those coming from the different parts of the country. Though it is a fact that Manila is now congested, it doesn’t deny the fact that the country’s capital city is rich in culture, heritage, and most importantly, opportunities.
The place has a lot of condos to offer, in fact, there are numerous condos for sale in Manila. Vista residences, for example, caters to an array of residents with diverse backgrounds and fields - may it be for students, young professionals, or start-up families. Plumeria Heights around Taft is the ideal place for students. This pre selling condo and a vertical landscape give every resident access to the closest hospitals, schools, and shopping malls. Meanwhile, Vista heights, a ready for occupancy condo in Manila, integrate learning and fun, clean and secured environment, perfect for families and young professionals.
Bottom line is, when investing in a property like a condo, make sure that one must have their priorities and have a deep thought about it. Asking questions like: Is buying at this time worth it? Does postponing investing in such a property lead to a bigger gain? Is a condo the priority at this moment? And other “what ifs”. If such answers do not make it convincing to buy a condo, then perhaps delaying the condo living dream might be the best choice.
If you are thinking of moving in to a new condominium, check out Vista Residences!
Vista Residences is the condominium arm of the country’s largest homebuilder, Vista Land & Lifescapes, Inc. that offers ready for occupancy and pre-selling condominium projects in Manila, Makati, Mandaluyong, Quezon City, Ortigas, Baguio, Cebu, and CDO that are strategically located within major cities, in close proximity to premium universities, transit oriented locations and developed business districts.
At Vista Residences, unit owners can take advantage of the property’s centrality. The properties of Vista Residences are strategically located near the country’s premium universities and CBDs, making them an attractive investment for both local and foreign investors.
Living in Vista Residences enables you to enjoy convenience, where everything is pretty much within walking distance or a few minutes away from the property; comfort because the project features and amenities are designed to deliver comfort at all times, which makes condo living a worthy investment; security that is 24/7 and CCTV monitoring, which makes the residents safe and secure within the property.
In line with Vista Residences’ thrust to offer convenience among its residents, it also features an AllDay Convenience Store and Coffee Project in all its projects.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.