Questions: Buying a townhouse..

[n2knee]

Unfortunately, in the context of real estate transactions, the term "capital gains tax" is a misnomer. The tax is not based on gains (ie profit) but on selling price.

It should actually be called a "sales tax".

much better term in order to avoid confusion on both parties.

wow. may "sales tax" pala ang real estate transaction dian.

[creepy]

much better term in order to avoid confusion on both parties.

wow. may "sales tax" pala ang real estate transaction dian.

Unfortunately, that's what it's called officially.

"Capital gains tax" used to be based on gains. Because of changes in tax regulations, it's now based on sales price.

[Lemon]

a little off topic: totoo bang condominium units usually revert back to the developer after XX number of years? I read here before na thats how ayala operates. If so, how about townhouses?

I have know idea, that condos after 50 years will revert back to the developer until an agent from DMCI mentioned this. Hindi binabanggit ng mga agent kung Perpetual Ownership ang mga condos kung hindi mo tatanungin. Before buying one, check mo muna and dapat Perpetual Ownership yun condo. Thats why I ended up getting my unit with DMCI.

[creepy]

I have know idea, that condos after 50 years will revert back to the developer until an agent from DMCI mentioned this. Hindi binabanggit ng mga agent kung Perpetual Ownership ang mga condos kung hindi mo tatanungin. Before buying one, check mo muna and dapat Perpetual Ownership yun condo. Thats why I ended up getting my unit with DMCI.

It depends on whether the land on which the condo sits is leasehold or freehold. Most condos in the Phils are freehold.

[swordsman]

First, get a photocopy of the Title of the land and the tax declaration of the town house and have it checked with the Registry of Deeds to make sure that it is in the name of the supposed owner and it is not mortgaged or being contested upon.

so those info about disputes or court cases on the property(if ever there is one) can also be obtained from the Registry of Deeds?

[leolop]

so those info about disputes or court cases on the property(if ever there is one) can also be obtained from the Registry of Deeds?

when you do get a copy of the title, you should go to the registry of deeds where it is registered and verify the title. they will give you a certified trued copy then you will see if there are notices (legally called annotations) that are inscribed on the title. possible annotations could be a mortgage, adverse claim, notice of pending litigation (lis pendens), etc. a clean title will have no annotations except possibly the deed of restrictions placed by the original developer.

you should take caution because you are dealing with someone who is not the owner. it's easy to make an SPA. if possible, ask for some more identification documents from the owner himself such as passport and other IDs and try to get to talk to him/her personally. just be more diligent, and don't presume anything. the flip side to this is that it may be fraud and you're dealing with someone who was only entrusted with the copy of the title.

if you are purchasing on installment basis from the seller, then the maceda law (ra 6552). but if you are paying for it with a loan from a bank then that will not apply and you will be covered by general banking act.

on other points, condominiums are set up as corporations and each unit owner owns an aggregate share of the corporation. all corporations have a life span of 50 years, but may be extended. automatic reversion to the developer sounds contrary to public policy.

capital gains tax is based on either the zonal valuation, tax declaration or selling price, whichever is highest. it is 6% of gross because it presumes a capital gain. the flip side to this is if it were based on actual gain, the gain would be taxed 32-35% as income tax. just imagine if you held property for a decade and the price had tripled then that 6% may not be so bad sounding after all.

it's true that cap gains tax is supposed to be on the part of the seller, but most sellers try to pass this onto the buyer. if buyer agrees then no problem.

[swordsman]

when you do get a copy of the title, you should go to the registry of deeds where it is registered and verify the title. they will give you a certified trued copy then you will see if there are notices (legally called annotations) that are inscribed on the title. possible annotations could be a mortgage, adverse claim, notice of pending litigation (lis pendens), etc. a clean title will have no annotations except possibly the deed of restrictions placed by the original developer.

thank you, very enligtening, sir.

you should take caution because you are dealing with someone who is not the owner. it's easy to make an SPA. if possible, ask for some more identification documents from the owner himself such as passport and other IDs and try to get to talk to him/her personally. just be more diligent, and don't presume anything. the flip side to this is that it may be fraud and you're dealing with someone who was only entrusted with the copy of the title.

that's what i'm worried about, and will double check. by

by the way, when it comes to trasferring of ownership, is a land title same as a certificate of registration on a vehicle?
for example, the original land/property owner(who's name appears on the title) sold the land to another(2nd owner) but failed to have the title changed to his name; the 2nd owner then sold the property to another(3rd owner). Is it possible to transfer the ownership from the 1st owner to the 3rd owner directly? Of course the deed of sale from 1st to 2nd to 3rd owner is intact.

I think when it comes to vehicles, this can be done, not sure about land.

if you are purchasing on installment basis from the seller, then the maceda law (ra 6552). but if you are paying for it with a loan from a bank then that will not apply and you will be covered by general banking act.

if paying with a loan from a bank, woudn't there be checks done by the bank(aside from what the buyer should do) to avoid any possible fraud, in this case?

[leolop]

thank you, very enligtening, sir.

that's what i'm worried about, and will double check. by

by the way, when it comes to trasferring of ownership, is a land title same as a certificate of registration on a vehicle?
for example, the original land/property owner(who's name appears on the title) sold the land to another(2nd owner) but failed to have the title changed to his name; the 2nd owner then sold the property to another(3rd owner). Is it possible to transfer the ownership from the 1st owner to the 3rd owner directly? Of course the deed of sale from 1st to 2nd to 3rd owner is intact.

I think when it comes to vehicles, this can be done, not sure about land.

if paying with a loan from a bank, woudn't there be checks done by the bank(aside from what the buyer should do) to avoid any possible fraud, in this case?

sorry, i'm not sure what the definite mode is when transferring from 1st to 3rd owner. it might be that the BIR will throw the book at you and charge you capital gains tax for both transfers. ouch! what i only know of is when a someone buys from the developer then sells to another, he can issue a deed of assignment of rights. the developer charges a fee and the rights are transferred to the new buyer.

but this would be even more basis to be cautious if you're not buying from the registered owner. yes, the bank is charged to be extra ordinarily diligent so they will check out everything. good luck!

[swordsman]

thanks sir leolop!

[swordsman]

Standard earnest money is good for 45 days reservation unless specified otherwise on your contract. It is non-refundable but can be deducted once the sale pushes through. The only provision of refund is if the seller is at fault for the sale not pushing through.

Follow-up question dito. If bank loan ang pambabayad sa townhouse, yong earnest money is given after(not before) the approval of the bank?