• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Pagibig Financing

Pag-IBIG Fund, Housing Loans, Mortgage, Membership, Foreclosures, etc

  • Home
  • FAQ
  • Marketplace
  • Contact Us
  • Subscribe

Capital Gains Tax

Capital Gains Tax, Other Real Estate Fees You Should Know

by Pag-IBIG Financing Admin

Real estate ads are all over the place these days. You see them in the pages of sleek magazines, in the local newspapers, and of course from the Internet. If you are like most buyers, you would probably notice first the price and then the other details next.

But did you know that the list price doesn’t tell you the whole real story? There could be a lot of other information and fees that are hidden from you and which could be a real shocker once the transaction starts to be formalized.

Many ads, not just with real estate but with other products as well, are subtly crafted to catch one’s attention and entice the prospective buyer into part ways with his money?

In real estate, there is a popular phrase that goes, “Caveat Emptor”, which translates to “Buyer Beware”. And when it comes to buying a property, you really have to know what you are getting into. As they say, the devil is always in the details.

This article is written to arm you with the right knowledge of the most important fees and charges related to a real estate purchase. Especially if you are cash strapped, that’s where the headaches really originate.

Outlined below are the various fees and charges — plus, who pays for what — that you need to be aware of.

real estate deal

1. Reservation Fee or Earnest Money (Paid by the buyer). The main purpose of this fee is to initially hold the property and assign it to the account of buyer so that no other interested buyers can take it for a specified period of time. Normally non-refundable, but should the prospect proceed with the transaction, this money will also form part of the down payment.

2. Down Payment (Paid by the buyer). Also called equity payment, this is normally in the range of 10% to 30% of the selling price which can be paid either in one-time or in a series of installments up to 24 months. The down payment is only required if the buyer is planning to finance the purchase by securing a mortgage loan from a financial institution like Pag-IBIG or a bank.

(Related Link : Mortgage Loan Fundamentals)

3. Appraisal Fee (Either paid by the seller or the buyer). Sometimes this is done only if the property is to be financed by a loan from bank or other lending institution. Usually, the appraisal is also conducted by the financing company through their Appraisal Team. The payment for this is collected together with the loan application fee before the loan is even processed. In the case of For Sale By Owner, the seller may also wish to have the property he is selling appraised by a third-party, independent appraiser.

(Related Link: Equity, Appraisal and Loan Amount.)

4. Loan Charges (Paid by the buyer-borrower). When you apply for a home loan, the lender has to make sure that you are a good borrower. And that implies a lot of work on their part. From documentary charges, to credit investigation and processing some documents, they have to make sure that you pay them for the time and efforts they spend doing the tasks.

5. Attorney’s Fees (Paid by both the buyer and the seller). These are fees for the services rendered by a lawyer and are needed by both parties to formalize the legality of a real estate deal . Some legal documents could involve the Special Power of Attorney, Contract To Sell, Deed of Restriction, Waiver of Rights, Deed of Absolute Sale, etc.

6. Agent’s Commission (Paid by the seller). Real brokers and agents are paid by commission based on the selling price of the property, typically in the range of 3% to 7%.

7. Value Added Tax (Paid by the Buyer). If you think the agent is a sucker for taking 5% off the transaction, remember that there is an even bigger sucker who takes on a bigger piece while doing nothing. The rate of VAT is 10% of the selling price, but some real estate properties are exempted from this tax, especially those which are very cheap. Please check with your agent or seller to know if the property could be exempted from EVAT.

8. Capital Gains Tax (Paid by the seller). This kind of tax is usually imposed if the property is being sold at a higher price than it was purchased. Hence, the term “Capital Gains”. But the BIR has pegged this value to 6% of the Selling Price, or Zonal Value, or Market Value whichever is higher.

9. Documentary Stamp Tax (paid by the buyer). This innocent-sounding tax is set to be 1.5% of the Selling Price or the Zonal Value whichever is higher.

10. Transfer Tax (Paid By the buyer). The rate of this tax depends on the location of the property. The range is from 0.25% to 0.75% of the Selling Price or the Zonal Value of the property, whichever is higher.

11. Registration Fee (Paid by the buyer). Graduated rate based on the selling price of the property. This one is determined at the office of the Register of Deeds, they have a table there of the updated rate of charges.

12. Realty Tax (Paid by the buyer). The rate also varies from place to place, but you can consult your respective local government for the computation.

~~~

This article is written by Carlos Velasco.

Filed Under: Real Estate Finance Tagged With: Capital Gains Tax, Down Payment, Equity, Realty Tax, Taxes

Land Title : How To Register and Transfer It In Your Name As The Real Estate Buyer

by Pag-IBIG Financing Admin

When applying for a Pag-IBIG Housing loan, only two things can happen: Your loan application is either approved or disapproved.

Once your loan application is approved, the real work is just about to start. The most important, and tiring process here, is the registration and transferring of the Title in your name as the buyer of the real property – whether it is a lot-only property, a house and lot, a townhouse or a condominium unit.

Depending on the kind or property that you are buying the Title here can mean any of the following:

  • The Certificate of Land Title, which is also known as the Transfer Certificate of Title (TCT)
  • The Condominium Certificate of Title (CCT)

( Related: What if my housing loan application is disapproved? )

Title Registration and Name Transfer

Sample Land Title in the PhilippinesIf you are buying a new property from a real estate developer, or through its marketing arm, they should be able to assist you in the registration and transferring of title in your name. This is one of the advantages of buying from a developer instead of purchasing a property from an individual seller, where the burden of registration is placed on the buyer.

Of course, you can always opt to register the property by yourself, if that’s fine with you and you don’t mind going through the whole process. Again, as already mentioned, if you are buying from an individual, you have to do the legwork of title registration.

In any case, we have outlined below the series of step you need to take to be able to properly register the Title of the property and have it in your name.

(See also : Citizenship, Land Ownership and Pag-IBIG Fund Membership )

STEP 1: Get A Certificate Authorizing Registration

  1. Go to the office of the Bureau of Internal Revenue (BIR)
  2. Once you are at the BIR, present the Deed of Absolute Sale (DOAS), and Loan and Mortgage Agreement (LMA)
  3. Request for the computation of the Documentary Stamps and Capital Gains Tax.
  4. Then proceed to the designated bank and pay for the Documentary Stamps and the Capital Gains Tax. (Usually this is the Land Bank of the Philippines.)
  5. Go back to the office of the BIR and your Bank Receipt
  6. Finally, request for the issuance of Certificate Authorizing Registration (CAR)

STEP 2: Request Issuance of New Title

  1. Proceed to the Registry of Deeds and present the following documents: DOAS, CAR and LMA.
  2. Pay transfer tax and registration fees
  3. Request for the following:
    • Issuance of new Title under buyer’s name with proper annotation
    • Certified true copy of new title (owner’s copy)
    • Certified true copy of new title (RD’s copy)
    • DOAS stamped received, LMA stamped received

STEP 3: Pay Tax Declaration

  1. Proceed to the Assessor’s Office
  2. Present the new Title with your name
  3. Pay for the issuance of the new Tax Declaration under the buyer’s name
  4. Secure a copy of the new Tax Declaration

Take note that the steps just presented are just a part of whole Housing Loan Application Process — probably up to the loan approval stage but prior to the release of the loan proceeds. After you are done with Step 3 above, which is the most critical and time-consuming of them all, you have to go back to the Pag-IBIG Fund office or branch that approved your loan application. Present all the necessary documents required for the release of the loan proceeds.

~~~

This article on Title Registration is written by Carlos Velasco.

Filed Under: Housing Loans Tagged With: Capital Gains Tax, Documents, Housing Loans, Land Title, Tax Declaration, Title

The Pag-IBIG Housing Loan Process

by Pag-IBIG Financing Admin

This can be filed as one of the frequently asked questions: “How can I apply for a Pag-IBIG Housing Loan?”

This article addresses that question in a very straight-forward and easy-to-understand manner.

So without further ado, here are the steps to take.

Step #1: Attend The Loan Orientation. Officially, it’s called Loan Counselling Session. It’s conducted at any Pag-IBIG Office all over the Philippines. Check your nearest Pag-IBIG Fund office to check their scheduled Loan Counselling Session.

Step #2: Fill Up Some Documents. Normally, you will be asked to accomplish the following documents:

  1. Preliminary Counselling Questionnaire – Some basic questions that are easy to answer.
  2. Membership Status Verification Slip (MSVS) – This will be used by the assigned staff to check your records and contributions to the Pag-IBIG Fund.
  3. Housing Loan Application (HLA) – This is the official document where you signify your intention of getting a loan.

If you are qualified for a loan, you will be given the Checklist of Requirements (COR) depending on the purpose of your housing loan. Fill-up the HLA only after knowing your status. (Read Step 3)

Related: Are you qualified for a Pag-IBIG Housing Loan? Click here to find out.

Step #3: Submit HLA And Other Required Documents. This will probably take a couple of days to comply. But once all of the documents in the requirement checklist are ready, submit them together with the Loan Application Form. You will be asked to pay the processing fee, which is non-refundable.

Step #4 Wait for The Notice of Loan Approval or Letter of Guaranty. Or if you can’t wait on your mail box, phone them to follow-up the status of your loan application.

Step #5. Sign Loan Documents. There are some and will be provided at the Pag-IBIG Fund office.

Step #6: Visit the Bureau of Internal Revenue and Registry of Deeds.

  • Pay for the documentary stamps and capital gains tax at the BIR.
  • Have the Registry of Deeds put an annotation of mortgage on the Land Title.

Step #7. Get Loan Proceeds. But you have to show Pag-IBIG Fund the following documents:

  • Original Transfer Certificate of Title (TCT) in the name of the applicant with annotated mortgage
  • Deed of Absolute Sale with original stamp from the Registry of Deeds
  • New Tax Declaration in the name of the applicant
  • Updated Real Estate Tax Receipt (for house and lot, if applicable)
  • Occupancy Permit (secured from LGU Engineering Office, if applicable)
  • Assignment of Loan Proceeds

That’s it for the Pag-IBIG Housing Loan process — only seven steps.

Most likely, you will also be asked to make an advanced payment on the first monthly amortization immediately following the loan release. So have your cash or check ready.

Further Note: If you are buying a property from a real estate developer, this whole process would be easier. All that are needed is for you to follow Steps 1 to 3. Ask your agent or broker if he/she can assist on the housing loan application most often you will be extended an assistance.

Other Articles Related to Pag-IBIG Housing Loan:

  • Income vs Loan Amount vs Contribution
  • Housing Loan Document Requirements

~~~

The Pag-IBIG Housing Loan Process is written by Carlos Velasco in response to website visitor requests.

Filed Under: Buying Tips, Housing Loans, Real Estate Finance Tagged With: Capital Gains Tax, Documentary Stamp Tax, Documents, Housing Loan Process, Land Title, Loan Proccess, Membership Verification, Pag-IBIG Housing Loan, Requirements

Primary Sidebar

Article Categories

  • Buying Tips (21)
  • Featured Project / Property (13)
  • Housing Loans (39)
  • Membership (17)
  • Other Loan Types (8)
  • Pag-IBIG Fund QA (9)
  • Pag-IBIG Overseas Program (9)
  • Pag-IBIG Savings And Investments (7)
  • Real Estate Finance (32)
  • Tips and Traps (23)

Recently Written

  • Home Construction Loan — Should You Get One From Pag-IBIG?
  • Credit Card and Globe G-Cash — New Ways to Send Your Payment to the Pag-IBIG Fund
  • Pag-IBIG Housing Loan Basics. Plus: Dividends, Lost Land Title, etc
  • 5 Home Buying Strategies When Money is Tight
  • Common House Types in the Philippines
  • Home Ownership And Its Many Benefits
  • House For Sale in Laguna
  • How To Become An Expert in Pag-IBIG Housing Loan in 25 Minutes or Less
  • 3 Stupid Things People Do With Their Mortgage Loan
  • How To Assume A Loan
  • Real Estate Agents: Should You Work With Them?
  • Top 4 Reasons Why You Should Not Buy A House
  • Pag-IBIG Real Estate For Sale, May 2012
  • Email Exchange: Maximum Loan, Reactivating Member
  • Capital Gains Tax, Other Real Estate Fees You Should Know
Pag-IBIG Financing © 2010–2023
This website made by NegosyoBuilder.com