Government Taxes
Philippine Taxes and Other Fees on Real Estate
Purchases
A. Buying a property from a developer
The following taxes and fees are added on to
the purchase price and is payable by the buyer:
- 10% Value Added Tax - 10% of the purchase
price is added on. This tax is sometimes incorporated
to the purchase price already. But it is advised
to make sure if it is included in the price
or not.
- Documentary Stamp Tax - 1.5% of the total
selling price
- Transfer Fee - 1/2 of 1% of the total selling
price
- Registration Fee - approximately 1/2 of 1%
of the total selling price
B. Buying property from individual owners
- Capital Gains Tax (CGT) - 6% of the total
selling price. This tax is usually paid by the
seller but some owners quote prices net of tax,
meaning the CGT is for the buyer's account.
- Documentary Stamp Tax - 1.5% of the total
selling price. Just like the CGT, this tax is
usually for the seller's account, unless otherwise
arranged.
- Transfer Tax - - 1/2 of 1% of the total selling
price
- Registration Fee - approximately 1/2 of 1%
of the total selling price
Philippine Laws
on Foreign Ownership of Land
Foreign nationals would prefer to own lands, especially
foreign investors who intend to stay here for
a considerable period of time. The law, however,
states that foreigners cannot own lands, with
only a few exceptions:
- a balikbayan (a former natural born filipino
citizen) is entitled to own 1,000 square meters
of residential land, and one hectare of agricultural
or farm land;
- in cases of succession; and
- in cases of a condominium unit where a foreigner
can own up to 40 percent of the capital stock
of the condominium corporattion.
A lease agreement can be entered into with Filipino
landowners for an initial period of 50 years renewable
for another 25 years.
DUAL CITIZENSHIP
ACT
What is Republic Act No. 9225?
Republic Act No. 9225 is an Act making the citizenship
of Filipinos who acquire foreign citizenship permanent,
amend in for the purpose Commonwealth Act No.
63.
RA 9225, which took effect on 17 September 2003,
declares that former natural-born Filipino citizens
who acquired foreign citizenship through naturalisation
are deemed not to have lost their Philippine citizenship
under conditions provided in the Act.
There former Filipinos can re-acquire/retain
their Philippine citizenship by taking the oath
of allegiance to the Republic of the Philippines.
Who is a natural-born Filipino citizens?
Under the Philippine Constitution, a natural-born
citizen is a person born of one or both parents
who are Filipino citizens at the time of birth.
Does the law RA 9225 apply to dual citizens?
RA 9225 does not apply to dual citizens, ie,
those who have both Philippine citizenship as
well as foreign citizenship not acquired through
naturalisation.
A child born of parents who are both Filipino
citizens (at the time of birth) in a country that
adheres to the jus soli principle (eg, the United
States) is a dual citizen. The child, who is a
natural-born Filipino because the Philippines
adheres to the jus sanginis principle, is also
entitled to apply for a US passport.
Jus soli (right of soil) is the legal principle
that a person's nationality at birth is determined
by the place of birth (ie, the territory of a
given state).
Jus sanguinis (right of blood) is the legal principle
that, at birth, an individual acquires the nationality
of his/her natural parent/s.
A chld born of one parent who is a Filipino citizen
(at the time of birth) and of one foreign parent
(eg, Australian) whose country adheres to the
jus sanguinis principle is a dual citizen and
is entitled to apply for both Philippine and Australian
passports.
A child born of one parent who is a Filipino citizen
(at the time of birth) and of one foreign parent
(eg, Australian) whose country adheres to the
jus sanguinis principle in a country that adheres
to the jus soli principle (eg, US) would be entitled
to apply for Philippine, Australian and US passports.
How do i prove that I am a natural-born
Filipino?
A former natural-born citizen, who was born in
the Philippines, shall submit the NSO-authenticated
copy of his or her birth certificate.
A former natural-born citizen, who was born abroad,
shall present a copy of the Report of Birth issued
by the Philippine Embassy or Consulate and, in
applicable cases, the original copy of the Birth
Certificate by competent foreign authorities.
What is the procedure in applying and
what documents are required in order to apply?
Applicant shall present a copy of his/her Birth
Certificate issued or duly-authenticated by the
National Statistics Office (NSO) in Manila
(Note: applicants can request for an authenticated
birth certificate from the National Statistics
Office on-line through the following website:
www.ecensus.com.ph)
In case of no records found, applicant must present
a Certificate of Non-Availability of Birth Record
from the NSO and other secondary documentary proof
of being a former natural-born Filipino citizen
(e.g. old Philippine passport, baptismal certificate,
marriage certificate of applicant’s parents)
Applicant accomplishes form entitled “Petition
for Dual Citizenship and Issuance of Identification
Certificate (IC) pursuant to RA 9225” and
attaches three (3) 2”x2” photographs
showing the front, left side and right side views
of the applicant.
Applicant submits duly-accomplished petition to
the Philippine Consulate / Embassy together with
the photos, birth certificate and a valid ID.
(Note: applicants who are married and who wish
to use their married names must submit a copy
of their marriage certificate).
Applicant pays a processing fee of US$ 50.00
and is assigned a schedule for his/her oath of
allegiance before a consular officer. Applicant
takes his/her oath.
Applicant is given the original copy of his notarized
oath of allegiance together with an Order of Approval
issued by the Philippine Consulate General.
The Philippine Consulate General forwards to the
Bureau of Immigration in Manila the petition,
oath, order of approval, and other supporting
documents for issuance of an Identification Certificate.
The Bureau of Immigration issues an Identification
Certificate (IC) and forwards it to the applicant
through the Philippine Consulate General.
What is the implementing agency of RA
9225?
Administrative Order No. 91, Section 1 designates
the Bureau of Immigration (BI), in consultation
with the Department of Foreign Affairs (DFA),
Department of Justice (DOJ), Office of the Civil
Registrar-General of the National Statistics Office
(NSO), as the implementing agency of RA 9225.
Where do I apply for re-acquisition of
Philippine Citizenship if I am in the Philippines?
A former natural-born Filipino citizen who is
already in the Philippines and registered in the
Bureau of Immigration shall file a petition under
oath to the Commissioner of Immigration for the
cancellation of the Alien Certicate of Registration
(ACR) and issuance of an Identification Certificate
(IC) as the case may be, under RA 9225.
A former natural-born citizen who is already
in the Philippines but has not registered with
the BI within 60 days from date of arrival shall
file a petition under oath to the Commissioner
of Immigration for the issuance of an IC under
RA 9225.
Where do I apply for re-acquisition of
Philippine Citizenship if I am overseas?
A former natural-born citizen who is abroad but
is a BI-registered alien shall file a petition
under oath to the nearest Philippine Embassy or
Consulate for evaluation. Thereafter, the Embassy
or Consulate shall forward the entire records
to the Commissioner of Immigration for the cancellation
of the ACR and issuance of an IC under RA 9225.
A former natural-born citizen who is abroad and
is not a BI-registered alien shall file a petition
under oath to the nearest Philippine Embassy or
Consulate for the issuance of an IC under RA 9225.
What is the Oath of Allegiance?
The Oath of Allegiance is the final act that
confers Philippine citizenship. It reads as follows:
"I,________________, solemnly swear that
I will support and defend the Constitution of
the Republic of the Philippines and obey the laws
and local orders promulgated by the duly constituted
authorities of the Philippines, and I hereby declare
that I recognise and accept the supreme authority
of the Philippines and will maintain true faith
and allegiance thereto, and that I impose this
obligation upon myself voluntarily without mental
reservation or purpose of evasion."
Can the conferment of Philippine citizenship
be revoked?
The conferment of Philippine citizenship under
the IRR shall no longer be subject to the affirmation
by the Secretary of Justice. However, Philippine
citizenship may be revoked by competent authority
upon a substantive finding of fraud, misrepresentation
or concealment on the part of the applicant.
Can my foreign spouse also become a Filipino
citizen under RA 9225?
No, the law does not apply to the foreign spouse.
He/she has the following option if he/she wishes
to reside permanently in the Philippines: (a)
apply for naturalisation; (b) apply for a permanent
resident visa.
Can my children (minor or aged 18 years
old or over) also acquire Philippine citizenship
under RA 9225?
According to Section 4 of RA 9225 (Derivative
Citizenship), the unmarried child, whether legitimate,
illegitimate or adopted, below eighten (18) years
of age, of those who re-acquire Philippine citizenship
under this Act shall be deemed citizens of the
Philippines.
A married child, although a minor, cannot therefore
be included in the petition of his/her parent.
Children 18 years old and over do not qualify
to acquire Philippine citizenship under RA 9225.
They have the same options that are open to the
foreign spouse.
What is the procedure for derivative
acquisition of Philippine citizenship?
The petition under oath has the option to list
the names and details of any minor, unmarried
children. The applicant should include a copy
of the Report of Birth and the original copy of
Record of Birth for each minor child.
The Embassy will clarify from Bureau of Immigration
the exact procedure in case of the minor children
and whether the BI will issue to them a Certificate
of Identification.
After I have re-acquired Philippine citizenship,
can I apply for a Philippine passport?
Yes, and so can the minor children who are deemed
to have acquired Philippine citizenship under
RA 9225. You would need to comply with the requirements
for first-time passport applicants.
What rights and privileges will dual
citizens enjoy?
Those who retain or reacquire their Philippine
Citizenship under RA 9225 shall enjoy full civil
and political rights and be subject to all attendant
liabilities and responsibilities under existing
laws of the Philippines and the following conditions:
Those intending to exercise their right of suffrage
must meet the requirements under Section 1, Article
V of the Constitution, Republic Act No. 9189,
otherwise known as “The Overseas Absentee
Voting Act 0f 2003” and other existing laws.
Under the Act, the right to vote or be elected
or appointed to any public office in the Philippines
cannot be exercised by, or extended to, those
who are candidates for or are occupying any public
office in the country of which they are naturalized
citizens and/or those who are in active service
as commissioned or non-commissioned officers in
the armed forces of the country which they are
naturalized citizens.
Those seeking elective public office in the Philippines
shall meet the qualifications for holding such
public office as required by the Constitution
and existing laws and, at the time of filing of
the certificate of candidacy, make a personal
and sworn renunciation of any and all foreign
citizenship before any public officer authorized
to administer an oath.
Those appointed to any public office shall subscribe
and swear to an oath of allegiance to the Republic
of the Philippines and its duly constituted authorities
prior to their assumption of office: Provided,
That they renounce their oath of allegiance to
the country where they took that oath;
Can I now acquire land and other properties
or engage in business?
As provided for under the 1987 Philippine Constitution,
a Filipino citizen is entitled to purchase land
and other properties and engage in business. There
is no limit in terms of area or size of land or
real property he/she could acquire/purchase under
his/her name. This right would now apply to former
natural-born Filipinos who have re-acquired Philippine
citizenship under RA 9225.
Can I now reside in the Philippines without
having to apply for entry visa?
Former natural born Filipinos who have re-acquired
Philippine citizenship may now reside in the Philippines
continuously without having to apply for entry
visa. If the foreign spouse and/or child wish
to also reside permanently in the Philippines,
they may opt to apply for naturalisation as a
Filipino citizen or apply for a permanent resident
visa.
If he/she does not wish to reside permanent in
the Philippines, he/she could visit the country
as a Balikbayan (refers to a Filipino citizen
who is out of the country continuously for at
least one year). The foreign spouse or child may
enter the country and stay for up to a year visa-free
provided the spouse or child is accompanying or
travelling with the Balikbayan when the Balikbayan
goes home to the Philippines.
As a dual citizen, how long can I stay
in the Philippines?
Having reacquired your citizenship, you can stay
in the Philippines for as long as you want without
having to pay an immigration fees. You can even
choose to retire or permanently settle back in
the Philippines. As a Filipino citizen, you are
subject to duties and other obligations imposed
on other ordinary Filipinos, such as paying the
necessary community tax residence and other tax
liabilities in accordance with the tax laws of
the Philippines.
Will I now be required to pay income tax and other
taxes? Am I exempt from paying the travel tax?
In accordance with existing laws, income earned
in the Philippines is subject to the payment of
tax. Filipinos who re-acquire citizenship and
opt to reside and work in the Philippines will
pay the income tax due at the end of each fiscal
year. They are also subject to other obligations
and liabilities, such as the community tax and
residence tax.
Countries routinely forge bilateral agreements
in order that their respective citizens who earn
income overseas do not pay income tax twice.
Filipinos who have re-acquired citizenship, as
long as they reside permanently overseas, also
enjoy the travel tax exemption extended to Filipino
citizens permanently residing in other countries,
the OFWs and their dependents.
As a dual citizen, am I allowed to practice
my profession in the Philippines (e.g. doctor)?
Under the law, those intending to practice their
profession in the Philippines shall apply with
the proper authority for a license or permit to
engage in such practice.
If I need to get more details on the
rules and procedures for the implementation of
RA 9225, which government office do I contact
in the Philippines?
Under Administrative Order No. 92 Series of 2004
dated 12 January 2004, the Bureau of Immigration
has been designated as the government agency in
charge of formulating the rules and procedures
for the implementation of Republic Act No. 9225.
The contact details of Immigration Commissioner
Alipio F. Fernandez are as follows: Office of
the COmmisioner, Bureau of Immigration, Magallanes
Drive, Intramuros, Manila, Philippines. (Tel.
No. (63)2 527-3265 / Fax No. (63-2) 527-3279)
For your info:
ACR - Alien Certificate of Registration http://www.immigration.gov.ph/acr-icard.php
CI- Identification Certificate
BI - Bureau of Immigration http://www.immigration.gov.ph
DOJ - Department of Justice http://www.doj.gov.ph
NSO - National Statistics Office http://www.census.gov.ph
http://www.ceburealtybrokerage.com/links.php
What is Real Estate?
It refers to land and/or building or other improvements
permanently attached or annexed to land including
the rights and interests thereon and includes
rural, suburban and urban land and developments
thereof such as residential, commercial, industrial,
institutional, agricultural, aqua cultural or
combination of such rights and interests, resorts,
land reclamation, building or housing projects
either for individual or condominium ownership,
memorial parks, townhouses, club houses and other
similar nature.
What is Real Estate Brokerage?
It refers to act or practice whereby a natural
or juridical person, on behalf of another and
for or in expectation of a fee, commisssion, compensation
or other valuable consideration, performs any
of the following acts: list, offer, advertise,
solicit, promote, mediate, negotiate or effect
the meeting of the minds on the sale, purchase,
exchange, mortgage, lease, joint venture or other
transactions in real estate or any interest therein.
What is a Real Estate Broker?
Any person, natural or juridical, who performs
real estate brokerage as defined above.
What is a Sale?
By a contract of sale, one of the contracting
parties obligates himself to transfer the ownership
of and to deliver a determinate and the thing
other party to pay therefore a certain price in
money or its equivalent.
What is a Lease Contract?
It is a contract whereby one of the parties
binds himself to give another the enjoyment or
use of a thing for a certain price, and for a
period which may be definite or indefinite.
What is Lis Pendens?
It is an annotation in the title which serves
as notice that the property is subject to a pending
litigation. It is a legal notice to all the world
that there is a dispute as to the title of the
same.
What is a Lien?
It is a hold or claim which one person has upon
the property of another as security for a debt
or charge, judgment, mortgages, taxes.
What is a paraphernal property?
It is a property exclusively owned by the wife.
What is a capital property?
A property belonging exclusively to the husband.
What is an earnest money?
It is a sum of money tendered by a buyer to
the seller which, if accepted by the seller, shall
form part of the purchase price and becomes proof
of the perfection of the contract. It is a sign
of good faith on the part of the buyer.
What is a option money?
It is a sum of money tendered by a buyer to
the seller which, if accepted by the seller, shall
not form part of the selling price.
What is foreclosure?
It is a procedure whereby property pledged as
security for a debt is sold to pay the debt in
the event of default in payment or terms.
What is a fair market value?
It is the price at which a willing seller will
sell and a willing buyer will buy, neither being
under abnormal pressure or circumstances.
|
