07/08/2021
FYI ๐
Q: How Much Does It Cost to Transfer a Land Title?
โข A: Unlike in other purchases, buying real estate does not consist of โone big cost.โ
Apart from the price of the property, there are also fees and taxes that need to be covered to complete the transaction.
Among these is the cost to transfer the land or property title, which itself is not one singular expense, but also a number of fees and taxes, the amounts of which are based by how much the property cost at the time of transaction or transfer.
โ๏ธCapital Gains Tax: equivalent to 6 percent of the selling price on the Deed of Sale or the zonal value, whichever is higher
โ๏ธWithholding Tax: applies only when the seller of the property is a corporation
โ๏ธUnpaid real estate taxes due (if any)
โ๏ธDocumentary Stamp Tax: this is commonly set at 1.5 percent of the selling price, or its zonal value or fair market value, depending on which is higher
โ๏ธTransfer Tax (Local Treasurerโs Office): this is tax is imposed on the sale, barter, or any other mode of transferring of ownership or title of real property, at the maximum rate of 50 percent of 1 percent (75 percent of 1 percent in the case of cities and municipalities within Metro Manila) of a propertyโs worth.
โ๏ธTransfer Tax (BIR): Transfer taxes may also be owed to the Bureau of Internal Revenue. According to the BIR, if the property was/is donated, this is in the form of donorโs tax. If the property was transferred by way of inheritance, this is in the form of estate tax.
โ๏ธRegistration Fee: commonly set at 0.25 percent of the selling price, or zonal value or fair market value, depending on which is higher.
โ๏ธIncidental and miscellaneous expenses incurred during the registration process, such as notary fees.
The total of these taxes and fees is the cost of transferring a land title which, as mentioned, depends on the overall value of the land or property being transferred.
