People had a sigh of relief when the Tax Amnesty Act (RA 11213) was passed. We then waited with bated breath wondering when the Implementing Rules and Regulations (IRR) would come out.
Last April 8, 2019, we were greeted with good news. The first IRR finally came out. BIR's Revenue Regulation No. 4-2019 ("RR"), however, implements only a portion of the Tax Amnesty Act, specifically the settlement of your tax delinquencies.
Remember that tax amnesty does not mean that you can go scot-free from your delinquencies: it means that the government will take you off the hook if you pay a certain amount and allow yourself to be subjected to various requirements. This amnesty applies to taxable year 2017 and earlier.
To put a long story short, below is the list of covered tax delinquencies with the rates required to be paid:
A. Delinquent accounts and assessments which have become final and executory - 40% of the basic tax assessed;
B. Tax cases subject of final and executory judgment by the courts - 50% of the basic tax assessed;
C. Pending Criminal Cases filed with the DOJ/Prosecutor's Office or the courts for tax evasion and other criminal cases under Chapter II of Title X and Section 275 of the Tax Code, as amended - 60% of the basic tax assessed; and
D. Withholding agents who withheld taxes but failed to remit to the BIR - 100% of the basic tax assessed, even if the taxes shall fall under letters (A), (B) or (C) above.
You just bought a house and lot. Now you want to transfer title from the seller's name to yours. If you're dealing with a real estate company, that company usually will take care of that for you. However, in some instances, especially if you bought the house and lot from an individual, you will have to work on it on your own.
So how do you do it? Here are a few tips:
1. Secure extra original copies of the Deed of Absolute Sale, if possible. Copies of this important document will be submitted to relevant government offices before the transfer can be processed. It's better if you always have an extra copy by your side. If the seller is a corporation, make sure that you also have an original copy of the Secretary's Certificate authorizing the sale of the corporation's land to you. It would also be best to personally know the lawyer who notarized the Deed of Absolute Sale. Under the law, he should have with him a copy of the Deed of Sale and, in case you lose your copy, you can always go back to the notary to get one.
2. Make sure the capital gains tax are paid. Under the law, it should be the seller who should file the Capital Gains Tax Return and pay the taxes due. However, you may be in a situation where the contract states that you will be liable for the taxes due on the sale. In this case, ask the seller for a duly accomplished Capital Gains Tax Return (because he/she has to sign), submit the Return to any Bureau of Internal Revenue (BIR) Authorized Agent Bank and pay the capital gains tax due.
3. After payment of Capital Gains Tax, secure a Certificate Authorizing Registration (CAR) from the BIR. A CAR is a document issued by the BIR which serves as proof that Capital Gains Tax for the sale of the property has been paid.
4. Make sure that the necessary transfer tax is paid to the local government unit where the property is located. Transfer taxes vary from one local government unit to another. It is best to consult with your local city/municipal/provincial treasurer regarding transfer taxes. Don't forget to get the receipt/proof of payment of transfer taxes.
5. Obtain a Realty Tax Clearance from the local government unit where the property is located. This is a document which proves that real property taxes over the property have already been paid. If there are delinquencies in the payment of real property tax, better discuss this with the seller of the property.
6. Secure a Owner's Duplicate Copy of the Title and the Certified True Copy of the latest Tax Declaration of the property you bought. You should ask the assistance of the seller in this.
7. After finishing everything, go to the Register of Deeds (RD) where the property is located with the following: (a) Deed of Absolute Sale; (b) BIR CAR/Tax Clearance Certificate; (c) Owner's Duplicate Copy of the Title; (d) Realty Tax Clearance; (e) Certified True Copy of the latest Tax Declaration of the property; and (f) Transfer Tax Receipt/Clearance. The lovely people at the RD will be more than happy to assist you.
