# Hidden Charges on Condo upon turnover



## xxxsoulxxx (Oct 27, 2020)

Hi all, I just got turnover on my condo unit from the developer and was shocked with the list of hidden charges amounting to almost 5% of total price. It was nowhere stated in the contract when I first purchased them. Need advise from experienced condo buyers if its normal and reasonable to pay these and what should I do:

Other Charges
Documentary Stamps
Transfer Tax
Registration Fee
Miscellaneous Fee

Appreciate your kind advise.


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## Tiz (Jan 23, 2016)

Well my advice would be rent, don't buy.......but I guess it's a bit late for that.


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## PH-Expat (Oct 25, 2020)

Those are all normal fees as far as I know but they should have been disclosed.


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## Shadowman (Apr 20, 2020)

Transfer tax: .75% of sales price
Registration fee: .25%
Documentary tax: 1.5%
Capital Gains tax: 6%

Your specific contract stipulates who pays these, buyer or seller.


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## John Monk (Oct 28, 2020)

This is why I would never buy anything other than a scoot/motorbike in the Philippines. Lesson learned, rent then annoying neigbors or bullys can be avoided by simply moving =)


Those are all normal though and should have been disclosed.... I entertained some condo sellers in Manila for the free meal they treated me to but would never invest in one myself.

I like freedom, rent for a few months then go to a different city and rent there!


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## hogrider (May 25, 2010)

Shadowman said:


> Transfer tax: .75% of sales price
> Registration fee: .25%
> Documentary tax: 1.5%
> Capital Gains tax: 6%
> ...


Capital Gains Tax is for the seller, unless you agreed differently in your contract.


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## hogrider (May 25, 2010)

John Monk said:


> This is why I would never buy anything other than a scoot/motorbike in the Philippines. Lesson learned, rent then annoying neigbors or bullys can be avoided by simply moving =)
> 
> 
> Those are all normal though and should have been disclosed.... I entertained some condo sellers in Manila for the free meal they treated me to but would never invest in one myself.
> ...


Great if you enjoy the life of a nomad. Personally, I can't imagine upstakes every couple of months, shifting all my nice furniture, transporting the dogs etc, and starting all over again.


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## Gary D (Oct 28, 2013)

hogrider said:


> Capital Gains Tax is for the seller, unless you agreed differently in your contract.


It's not unusual for the seller not to have any money so the buyer often ends up paying it.


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## hogrider (May 25, 2010)

Gary D said:


> It's not unusual for the seller not to have any money so the buyer often ends up paying it.


As I said, unless you agreed differently in your contract. The CGT can be taken from the funds handed over to the seller if he is unable to pay it upfront.


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## Gary D (Oct 28, 2013)

hogrider said:


> As I said, unless you agreed differently in your contract. The CGT can be taken from the funds handed over to the seller if he is unable to pay it upfront.


I think the only way would be to reduce the sale price by the appropriate amount then the buyer pay it.


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## bigpearl (Jan 24, 2016)

Exactly Gary and buyer/seller beware and not a penny more. The operative word is buyer and seller own their responsibilities and those to slack to research deserve to be smacked.

OMO.

Cheers, Steve.


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## Lunkan (Aug 28, 2020)

Shadowman said:


> Transfer tax: .75% of sales price
> Registration fee: .25%


 The tax and fee can't be that high. Perhaps you mean a reduced value, which the tax and fee are calculated at? 
I checked it years ago so I don't remember how it's calculated but if I remember correct is/was the total a bit over 10 % extra.
BUT it's calculated at the* highest *of the selling price and what officials have valued the real estate to. In some municipalies the officials' valuing is crazy far to high. I have seen some valuations, which have been almost ten times higher than owners of such land have big problem to sell at!!! That's for rural land. I have no idea if it's similar craztness about condos and town houses, because I'm not interested in such  So check the official valuing before buying anything.


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## 68whiskeymike6 (Jan 10, 2019)

Tiz said:


> Well my advice would be rent, don't buy.......but I guess it's a bit late for that.


Lol


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## 68whiskeymike6 (Jan 10, 2019)

hogrider said:


> Great if you enjoy the life of a nomad. Personally, I can't imagine upstakes every couple of months, shifting all my nice furniture, transporting the dogs etc, and starting all over again.


"Every couple of months"? How about every couple of years?


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## Shadowman (Apr 20, 2020)

hogrider said:


> Capital Gains Tax is for the seller, unless you agreed differently in your contract.


Like I said, it depends on the contract. In theory it's for the seller, especially because sellers can find loopholes to avoid paying it, but in practice most sellers stipulate "buyer pays all taxes" including CG



Lunkan said:


> The tax and fee can't be that high. Perhaps you mean a reduced value, which the tax and fee are calculated at?


This says you're correct about the tax but not the fee:

The Registration fee: "commonly set at 0.25 percent of the selling price, or zonal value or fair market value, depending on which is higher."

The Transfer Tax (Local Treasurer’s Office): "50 percent of 1 percent (or 75 percent of 1 percent in some cities) of a property’s worth." - Q&A: How Much Does It Cost to Transfer a Land Title in the Philippines? | Lamudi


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## Lunkan (Aug 28, 2020)

Shadowman said:


> Tax:.75
> ...
> 0.25


 Oh the first is ment to be* 0*.75. Then I agree


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## hogrider (May 25, 2010)

Who should pay capital gains tax Philippines?
A: *CGT* is a *tax* that is always *paid* by the seller of a *capital* asset at a rate of six percent of its gross selling price, zonal value (BIR), or assessed value (provincial/city assessor), whichever is higher. A *capital* asset is any property that is not used in the seller's trade or business.Feb 13, 2019


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## Gary D (Oct 28, 2013)

hogrider said:


> Who should pay capital gains tax Philippines?
> A: *CGT* is a *tax* that is always *paid* by the seller of a *capital* asset at a rate of six percent of its gross selling price, zonal value (BIR), or assessed value (provincial/city assessor), whichever is higher. A *capital* asset is any property that is not used in the seller's trade or business.Feb 13, 2019


Because the seller never has any money and the buyer is rich. So often the only way the transaction can proceed is for the buyer to pay. It's sort of become expected.


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## cvgtpc1 (Jul 28, 2012)

Gary D said:


> Because the seller never has any money and the buyer is rich. So often the only way the transaction can proceed is for the buyer to pay. It's sort of become expected.


Seller pays or give me a 6% discount? But know how that would work.


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## Lunkan (Aug 28, 2020)

Gary D said:


> Because the seller never has any money and the buyer is rich. So often the only way the transaction can proceed is for the buyer to pay. It's sort of become expected.


 But the seller get money when selling


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## Gary D (Oct 28, 2013)

Lunkan said:


> But the seller get money when selling


It's been a while since we got involved in this type of thing but it's possible that it needs paying up front.


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## Lunkan (Aug 28, 2020)

Gary D said:


> It's been a while since we got involved in this type of thing but it's possible that it needs paying up front.


 Can't it be done at SAME time? =Both seller and buyer is there when the transfer is done.


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## Lunkan (Aug 28, 2020)

LOCK UP! Not only loans with real esttate as collateral,
but there are other depts as 
the yearly real estate tax
electric bill depts
and I suppouse water and other depts related to the real estate too
*depts follow the real estate NOT the person who got the depts! * So look up as buyer to not get any such suprice depts. For instance you can be demanded to pay a big electricity bill dept to get possibility to get electricity...


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## hogrider (May 25, 2010)

Lunkan said:


> But the seller get money when selling


Totally agree. That's what I've been saying for the past several messages. Seller pays CGT end of story, or else you get a discount on the selling price of that amount.


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## Manitoba (Jun 25, 2014)

Just consider the selling price to be 6% less than what you pay.

No different than the sales taxes added at the cash register as is common on Canada and the USA.


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## bigpearl (Jan 24, 2016)

Guys, sorry if this is another long winded post (what's new with me?), only our experience here and may vary for others.
We purchase house and lot a little over three and a half years ago but doubt if things with BIR have changed.

In our negotiations with the vendor and the licensed R/E agent prior to purchase.

It was agreed and accomplished that the vendor pay and bring up to date all municipal and Barangay rates and pay any fines as he was 4 odd years behind.
He would pay the electricity until the day he left, accomplished. Maintain the property in good order for the 2 years he was a tenant,,,,,,, not accomplished sadly.
CGT. the vendor only wanted to pay 100K. We discussed this at length as the 6% on the purchase price of 5.75M would mean 345K in tax. It doesn't work that way, the value of the property is assessed by the BIR and not the purchase price and was advised by the R/E agent that the funds proffered by the vendor should cover CGT based on their experience.
The sale went through and some weeks later we were contacted by the agent advising we had to pay an additional 110K odd for CGT. Many emails (we were back living and working in Oz) and phone calls to the R/E principal questioning his advice and ethics in this matter eventually saw the attorney or their representative appealing the valuation by BIR for CGT. It was revised and we coughed up 20K on the new valuation.

I find it interesting, the CGT thing. In Oz it is a capitol gains tax meaning capitol gain, depreciations and other factors come into the equation also, say I purchased a property for 10 bucks and sold it a year later for 12 bucks then the gain is 2 bucks aside from other things in our tax system and I pay the gain on 2 bucks, not 5 or 8 bucks. BTW in Oz if it is your primary place of residence, your home, there is no taxes to the vendor only stamp duties etc to the purchaser.

CGT on property here is not transparent and obviously "negotiable" and based on what? It really shouldn't be called CGT in my opinion.

Encumbering a title with a lease is another story for another thread.

Cheers, Steve.


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## bigpearl (Jan 24, 2016)

bigpearl said:


> Guys, sorry if this is another long winded post (what's new with me?), only our experience here and may vary for others.
> We purchase house and lot a little over three and a half years ago but doubt if things with BIR have changed.
> 
> In our negotiations with the vendor and the licensed R/E agent prior to purchase.
> ...


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## bigpearl (Jan 24, 2016)

Not sure why the double post now as I was trying to add more info but can't find an edit facility in this new setup, not the first time. Perhaps the moderators will point me in the right direction.
A little more info on the CGT rules.






Overview of Capital Gains Tax in the Philippines - Tax and Accounting Center, Inc.







taxacctgcenter.ph





Regardless how is it fair, imposed on the families primary place of residence, no wonder most expect or hope the purchaser will pay the CGT. It seems to be a play on words to generate revenue.

OMO.

Cheers, Steve.


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## Shadowman (Apr 20, 2020)

bigpearl said:


> BTW in Oz if it is your primary place of residence, your home, there is no taxes to the vendor


In the PH too:



> The sale of a principal residence is exempt from capital gains tax. - The Basic Taxes Involved in a Sale of Real Estate Property


Another reason most sellers want the buyer to pay them the CG tax is because the seller may just keep that money themselves.

What buyers should do:



> The buyer of the principal residence should withhold from the seller of the principal residence the supposed 6% capital gains tax. This amount should be placed in an escrow agreement between the concerned Revenue District Office and the seller.


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## Lunkan (Aug 28, 2020)

Buyer better deduct and pay self for things as unpaid electric bill and the yearly property tax, because if the seller don't pay them even if agreed so, such depts will become the BUYER'S because such depts follow the PROPERTY.


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