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Your Helpful Guide to Property Transfer Taxes and Fees

Do you want to buy real property? If you do, learning about real property taxes and fees is critical. Failing to pay can result in different consequences for you, depending on which one you miss. There are also a few types of taxes and fees that the seller will handle. Keeping track of what payments both parties need to settle will help make the transferring process easier. Prepare yourself with this quick overview of the different taxes and fees you and your seller will encounter, so that you’ll always stay on top of your payments. Buyer’s Taxes and Fees Registration Fee The simplest fee to consider when transferring a property is the registration fee, which you as the buying party will shoulder. Completing this payment is required in order to make the transfer of ownership official. To calculate the registration fee, take the selling price, zone value, or fair market value of the property, whichever one is the largest. The final cost for registration is 0.25% of that number. Transfer Tax A municipality imposes the transfer tax on any method of transferring real property ownership. You will pay this tax to the local government. The transfer tax is not to be confused with estate taxes, which are paid to the BIR. To calculate transfer taxes, you will still have to take the largest number among the property’s selling price, zone value, or fair market value. The transfer tax that you will have to pay is 0.75% of that number in Metro Manila, and 0.5% in other provinces. Documentary Stamp Tax Finally, you’ll have to pay the Documentary Stamp Tax upon finalizing the transfer. Documentary Stamp Tax, or DST, refers to the tax that is on any document or paper proving a sale or transfer. This tax applies to, among other things, the sale or transfer of stocks and properties. Calculating the DST for the transfer of real property works similarly to the transfer tax and registration fee. Take the highest number between the selling price, zone value, or fair market value of the property. You will have to pay 1.5% of that number for your DST. However, note that the DST is applied to a wide range of documents, and there are different ways to compute each one. The best way to see how to compute the DST for your document is by checking BIR’s Tax Rate Table. Seller’s Taxes and Fees Capital Gains Tax The government imposes the capital gains tax, also known as CGT, on the profit that the investor received from selling or exchanging their capital assets. Capital assets refer to both stocks of a domestic corporation and real property, but we will focus on real property for now. To get the CGT of a real property, take whichever is the larger number between the zonal value or selling price on the deed of sale. The seller will have to pay 6% of that number for your CGT. Realty Tax Realty tax refers to the tax imposed on all buildings, land, improvements on the land or building, and machinery. Section 197 to 283 of the Local Government Code states that all local governments can impose a realty tax. These governments will then use the collected tax to provide their public services to the community. If your seller has any unpaid realty taxes, he or she will have to settle them before completing the transfer of title. There are a few more steps towards calculating the realty tax. First, check the real realty tax rate of the property’s area. If it’s within Metro Manila, the rate is 2%. Likewise, if it’s within the provinces outside of Metro Manila, the rate is 1%. Next, calculate the property’s assessed value. You can get this by multiplying your property’s market value by its assessment level. Here are the assessment levels, based on Section 218 of the Local Government Code: For example, if you have a house worth P2,000,000, you’d multiply that by the residential assessment level, which is 20%. Your property’s assessed value would then be P400,000. Multiply your property’s assessed value by the area’s tax rate to get your yearly realty tax. Say this house is located in Metro Manila. Multiply P400,000 with 2% to get P8,000. The final step is to add an additional 1% of your property’s assessed value for the Special Education Fund, which aims to fund the local schools in the area. In this case, 1% of P2,000,000 would be 20,000. Adding this all up would finally bring your realty tax to 28,000 per year. You will have to shoulder this tax instead once the transfer is fully complete and the property is officially yours. Therefore, it’s a good idea to keep this in mind for the future. Conclusion Settling all of these taxes and fees on time can speed up the process of the transfer of title. Ensure that both you and your seller handle your respective payments on time. Are you looking for a real estate lawyer to help you with your transfer of title? You can rely on Sadsad Tamesis Legal and Accountancy Firm’s team of lawyers to help you throughout the transferring process.

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Do You Have a Lost TCT? What to Know About: Getting a New Certificate of Title

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Have you recently purchased real property, such as a plot of land or a house and lot? The first thing to do upon receiving ownership of real property is to put your Transfer Certificate of Title (TCT) somewhere safe. Your title is how you’ll be able to prove that you own the land or property in question. Without this document, you won’t be able to sell, borrow against, or give your property to anyone. You’ll also need your TCT if you plan on passing down your property to any heirs. However, sometimes incidents happen. It can get misplaced, or caught in an unfortunate fire or flooding. If you find yourself having lost or damaged your TCT, don’t worry. There’s still a way to prove yourself as the true owner, even without the original copy. According to Section 109 of Presidential Decree No. 1529, you can get a new copy through a Reissuance of Title. If you need a new copy of your TCT but are unfamiliar with the court process, here’s a quick overview of what to expect. Hire a Lawyer and File an Affidavit of Loss First and foremost, it’s essential that you look for and hire an experienced lawyer. A good lawyer will be able to speed up the process of the reissuance by gathering and organizing your evidence, guiding you with the requirements you have to obtain, handling other court requirements, and keeping you updated throughout the process. Afterwards, it’s time to file an Affidavit of Loss. This affidavit is a sworn statement that will notify the Registry of Deeds that your previous TCT has been lost or destroyed. This, in turn, will kick start the rest of the reissuance process. This Affidavit of Loss will include information such as the name and details of the owner; a description of the property; a description of how the property was lost; and why you are filing an Affidavit of Loss. File a Petition Requesting for Reissuance After filing your Affidavit of Loss, your lawyer will draft a petition requesting for the reissuance of the TCT. This petition will be filed with the Regional Trial Court. Attached to that petition are pieces of documentary evidence to support the claims of ownership which are stated there. These will include the Affidavit of Loss, Official Receipts, Tax Declaration, Tax Clearances, and any other documents that your lawyer will require from you.. Testify in Court To get a new copy of your TCT, you will need to prove to the court that you have truly lost the original copy and that you are the rightful owner of the property covered by the TCT. While requirements and documents you had gathered in the previous step serves this purpose, the law requires that you also testify in court so that you can confirm the statements and claims in the petition and to identify the documents attached before the judge.. If you have a co-owner, he or she may be allowed to testify on your behalf. Wait for Court Decision and File at the Registry of Deeds Once you have gone through all these processes and you have submitted your evidence, the only thing left to do is wait for the court’s final decision. Normally, this would end in your favor, especially if you had done your due part in ensuring your testimony is watertight, and documents are all genuine. However, there is a chance that someone will oppose the reissuance, which will further complicate and prolong the case. He or she may try to claim that you don’t have ownership of that property. He or she may also try to claim you never lost your original TCT in the first place. So long as you and your lawyer have a strong case, it’s likely that the court will grant your petition for reissuance. Afterwards, you’ll have to register the Court Decision with the Registry of Deeds. This will finally lead to the reissuance of your new Certificate of Title. Conclusion Take note that the court process of reissuing a Certificate of Title can take up to at least a year. This is why it’s essential for you to have a trustworthy, efficient, and experienced lawyer by your side. If you need a lawyer for your Reissuance of Title case, you can Sadsad Tamesis Legal and Accountancy Firm (STLAF) and book a consultation today.

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Books of Accounts: Simplified and Explained

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Having a book of accounts isn’t just for the sake of organization. If you’re handling a business establishment, you must manage a book of accounts. In fact, it’s one of the first things you have to register when applying for a Certificate of Registration with BIR. This doesn’t just include large corporations; even freelancers and smaller businesses need to keep a book of accounts. Your book of accounts should record all business transactions throughout your business, along with proof of transactions, such as receipts. These recordings are to ensure that your business is properly paying its due taxes to BIR, so ensuring your book of accounts is accurate and updated is essential. Be wary of letting your book of accounts go unupdated, as it could lead to harsh penalties. Here are the basics of your books of accounts so that you can start recording your business transaction Formats of Books of Accounts BIR currently accepts three formats of book of accounts, and you are free to choose whichever format works best for you and your business. However, do note that if you are a large taxpayer (meaning you have total annual gross sales/receipts of at least P1,000,000,000), you are required to use a computerized book of accounts. Manual Books of Accounts Chances are you’ve seen books of accounts for sale in an office supply store or bookstore. These are preprinted with all the required components of a book of accounts, and each entry has to be handwritten. You can register a manual book of accounts once you’ve gotten your Certificate of Registration from BIR. Once you have filled up your first book of accounts, you’ll be able to register another volume. Computerized Books of Accounts Finally, computerized books of accounts are programs where you can log your transactions, with functions and features that can help with efficiency. Many programs are available to purchase, but you can also hire IT experts to create one just for your business. However, do note that BIR is stricter with approving these programs. They have to put it under rigorous testing to ensure that it complies their rules and regulations. Again, large taxpayers must use computerized books of accounts. Loose-leaf Books of Accounts Finally, loose-leaf books of accounts combine both manual and computerized formats. You would create entries through a computer, usually using a template. Then, you can print these entries out, bind them, and it to BIR as your book of accounts. Note that you must submit your template to BIR first for approval before you can use it for your entries. During registration, you must also justify why a loose-leaf book of accounts is the best format for your business. Basic Types of Books of Accounts General Journal The General Journal is where you would initially put your accounting transaction. Many also call it the ‘original entry book’ for this reason. When creating an entry in the General Journal, you’d have to write down the date, description, reference code, and the debit or credit amount. General Ledger On the other hand, the General Ledger is also what taxpayers call the “book of final entry.” Here, you’ll be writing down summaries of your transactions that you previously recorded in your General Journal, as well as the other journals in our book of accounts. You’ll essentially follow the same format, too: account name, date, reference code, and the amount in either debit or credit. Cash Receipt Journal To keep your cash receipts in order, you’ll first have to input them in your Cash Receipt Journal, then transfer them to the General Ledger later on. To successfully record a cash receipt, you’ll need to write down the date, the official receipt number, description, amount, and other account titles (if any). Cash Disbursement Journal Likewise, you’ll need to keep track of your cash disbursements in order to summarize them in the General Ledger later. To do so, you’d write down the date, description, amount, and other amount titles. If you’re a non-VAT registered taxpayer, these four basic types are all you’ll need for your book of accounts. However, if your business is VAT-registered, there are two more journals you’ll need to update. Sales Journal You’ll need to record every sales transaction that your business completes in your Sales Journal. The format you’ll have to follow includes: Note that you won’t need to write the customer’s name and address if a Customer Master File is available. A Customer Master File, or CMF, is a company’s record of all of their customers’ information. Purchase Journal You’ll also need to record all of your business expenses in your Purchase Journal. The format is similar to the Sales Journal and is as follows: Just like with your Sales Journal, you won’t need to include the supplier’s name or address if you have a Vendor Master File, which functions in the same way as the Customer Master File. You’ll soon be able to register your own Book of Accounts now that you know how it works. Be sure to check BIR’s requirements and instructions before proceeding with registration. Are you in need of guidance regarding your book of accounts? Schedule a consultation with STLAF’s team of accountants today so that you can start recording your business transactions with ease.

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What You Need to Know About Trademarks: 4 FAQs Answered

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Can you go a day without seeing a trademark symbol anywhere? It’s a more challenging task than one may think. After all, almost every notable brand for every product and service has one of these symbols attached to its name or logo. But what are they exactly, and what is their significance? Knowing such information is crucial, especially if you plan on starting your own business. Here’s what you need to know about trademarks. What is a trademark? A trademark identifies a brand and differentiates it from competitors. The most common trademarks take the form of a word, phrase, symbol, or combination of the three. However, sounds and even smells can also be trademarked. A trademark gives your brand the exclusive right to use it while preventing others (especially your competitors) from using it. They would also not be allowed to use anything similar. For example, a competitor of McDonald’s would not be allowed to use a version of their logo in a different color. What is its importance? Trademarks prevent competitor brands from using your brand’s name or anything similar. This protection keeps you safe from competitors imitating your brand to get your consumer base or doing something slanderous to ruin your brand’s reputation. It also helps consumers remember your brand, distinguishing it from the rest of the crowd. Keeping your image unique, memorable, and recognizable can help expand your consumer base and increase the opportunity for repeat customers. Where can you file a trademark application? You can file a trademark application with the Intellectual Property Office of the Philippines (IPOPHL). Firstly, ISOPHL’s website links to the World Intellectual Property Organization’s Global Brand Database. This website lets you check if another company has already trademarked your intended brand name. You’ll also be able to browse a particular trademark’s serial number, registration number, mark type, expiration date, and more. You can proceed once you’ve confirmed that your intended brand name is safe to be trademarked. You can fill up your application online through the eTMFile Page. Regarding the Eat Bulaga Trademark Issue Who has the right over a trademark, the creator or the first to file the trademark? The ongoing dispute regarding Eat Bulaga between Tito Sotto, Vic Sotto, and Joey De Leon (TVJ) vs. TAPE Inc. has raised an interesting issue regarding trademarks. Is TVJ in the right to pursue getting Eat Bulaga’s trademark because they conceptualized and created the show? Or are they powerless against it because they didn’t submit the application before TAPE did? IPOPHL has what is called the FIRST-TO-FILE rule. This rule means that the party that was the first to file for registration for a trademark will get the rights to it above anyone else who filed for the same. Note that this is only if the first party was able to get all of their requirements together and filed their registration correctly. This means that since TAPE has been registering the trademark for Eat Bulaga for the past 40 or so years, they should be able to continue doing so, despite not being the show’s original creators. However, there are also ways for other parties to oppose a registration for a trademark. Section 151 of the Intellectual Property Code of the Philippines states that another party can file a petition to cancel a trademark registration if they believe that the registration will damage them in any way. This ended up being TVJ’s course of action. They filed a petition to the Bureau of Legal Affairs to cancel TAPE’s trademark of Eat Bulaga. IPOPHL has asked TAPE to respond before the 6th of July. If TAPE fails to answer TVJ, the agency will have to decide on the case. If TAPE does respond, an Adjudication Officer will handle the cases for a proper decision and resolution. Iit’s best to consult a lawyer first before filing a trademark application for your brand,. That way, you’ll be able to ensure that your application is complete and properly filled out for a smoother process. Our lawyers at Sadsad Tamesis Legal and Accountancy Firm will be able to guide you through every step of your application process.

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Adoption in the Philippines: An Easy Step-by-Step Overview

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This article is the latter part of a series regarding adoption. Click here to read the first part of this article series. Adoption is a complicated process that needs preparation both before and throughout. However, granting a child a new family and home makes it worth it. Arming yourself with the correct information beforehand will make the process much smoother for you. Now that you know who can adopt, who can be adopted, and the requirements to fulfill, it’s time to look at an overview of the process. This way, you can be several steps ahead and prepare for what’s to come. 1. Pre-Adoption Seminar/Forum The first thing a prospective parent must do is attend a Pre-Adoption Seminar. The DSWD regularly hosts these seminars, which contain crucial information about adoption. Some topics they may tackle during the seminar include another brief rundown on the adoption process and common misconceptions people might have about adopting a child. During these seminars, you’ll be able to connect with a social worker and give the profile of the child you wish to adopt. The social worker will then inform you of the length of the process, the documents needed for the adoption, and other information regarding your application. 2. Collection of Information and Analysis of the Applicant’s Motive Once you have submitted your application, a social worker will collect your information. The National Authority for Child Care (NACC) aims to approve applicants who can prove they can sufficiently care for and provide for an adopted child. This data collection is done to analyze your motivation for applying to adopt. 3. Submission of Oath, Application Form, and all other documents If you’ve prepared your requirements beforehand, this step is easy. You must submit your application form, all other documents, and oath to the NACC. The oath refers to The Undertaking and Oath Regarding Complete and Accurate Information on Prospective Adoptive Parents. It is an oath you must take and sign, indicating all the information you have provided is true and accurate. 4. Analysis of Requirements & Home Study Report Once you’ve submitted your application and other requirements, you’ll have to wait up to ten (10) working days as your assigned social worker goes through and analyzes your documents. If your requirements are satisfactory, the social worker will arrange your home visit. 5. Home Study Report After the home visit, your assigned social worker will create a Home Study Report (HSR). This report thoroughly analyzes the prospective parents’ household and background. It includes the household members’ psychological, psychosocial, and medical information. It would also have the social-cultural and economic conditions of the household. The social worker must analyze all of these factors to determine if the household is suitable for the adoptee to grow up in. 6. RACC Social Worker Review and Recommendation All of the documents from and about the prospective parents are then gathered and sent to a social worker of the Regional Alternative Child Care Office (RACCO) for review. Note that this process can take up to fifteen (15) business days. Once approved, the social worker will create a recommendation letter and send it to a RACCO officer. 7. Presentation and Interview with RCPC Once the RACCO officer approves your documents, he or she will schedule you for a presentation and interview with the Regional Child Placement Committee (RCPC). If you pass the interview, the RCPC will endorse your approval and inclusion to the National Roster of Approved Applicants to the RACCO Head. 8. Final Approval Finally, once you’re on the National Roster of Approved Applicants, the RACCO social worker will inform you of the decision regarding the adoption application. If you pass, you’ll finally be the legal guardian of the adoptee. Once you’ve completed every step in the process, the only thing left for you to do is to welcome your child into their new home. If you require legal advice, consider visiting sadsadtamesislaw.com and setting up a consultation with our team of lawyers.

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3 Things to Know Before Starting The Adoption Process

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All children deserve a loving family and a safe home to live in. Unfortunately, circumstances might make this more challenging to achieve for some. They may be abandoned, orphaned, or taken away from their biological parents due to neglect. Adoption remains a viable choice for individuals and couples to give these children a second chance at getting a family. In the Philippines, the National Authority for Child Care (NACC) is a one-step quasi-judicial agency that overlooks alternative child care, including the adoption process. It is attached to the Department of Social Welfare and Development (DSWD). Its adoption program is implemented under the recently passed Republic Act No. 11642, or the Domestic Administrative Adoption and Alternative Child Care Act. If you plan on adopting a child in the Philippines, looking through NACC’s adoption requirements is a good idea. That way, you’ll know exactly what you need. Here are the most critical factors you’ll need to know before beginning the adoption process. Who Can Adopt It’s essential to determine if both the adopter and adoptee are qualified to undergo the adoption process. An adult would be eligible to adopt if he or she is at least twenty-five (25) years old and at least sixteen years (16) older than the adoptee. However, the latter may not be applicable if the adopter is the biological parent or sibling of the adoptee. The adopter would have to be of good moral character and must be able to demonstrate it with a clean criminal record. He or she must also have total civil capacity and legal rights. Finally, he or she must be emotionally and psychologically well enough and be in a good financial position to sufficiently provide for a child. If the adopter is married, he or she must adopt jointly with his or her spouse, save for a few exceptions, such as: For these three exceptions, the spouse who would want to adopt need not do so jointly with his or her spouse. Who Can Be Adopted On the other hand, a child can only be eligible to be adopted if he or she is under eighteen years old. The child should also be administratively or judicially declared available for adoption. However, someone of legal age could be adopted by someone who was consistently cared for and treated by the adoptee as family when he or she was a minor. Examples of eligible children may include an illegitimate child of one parent by the other parent. There have also been cases of illegitimate children turned legitimate by their parents through adoption. Children whose parents have since died or whose previous adoptions have been rescinded can also be declared available for adoption. Requirements for Local Adoption Finally, it’s essential to get all your requirements ready before you begin the adoption process. Adoption is a lengthy procedure lasting up to a year or more. Ensuring that the documents needed on your end are set can help speed it up. It’s likely that you already have many of these requirements. The DSWD will require you to submit your Birth Certificate, Certificate of Employment, and National Bureau of Investigation (NBI) or Police Clearance. You’ll also need your marriage or nullity of marriage documents, such as a Marriage Certificate or Declaration of Nullity if applicable. They will also require your medical certificate to ensure you’re physically well enough for your parental duties. The NACC also wants to ensure your financial capabilities are sufficient to cover the needs of the prospective adoptee. Because of this, they’ll likewise require documentary proof of said financial capabilities, such as tax returns or bank statements. Next, prepare the requirements that are specific to the adoption process. Remember to fill up your application form and attend the adoption seminar to get your certificate of attendance. Prepare 3×5 inch-sized whole-body photos of yourself and, if applicable, your family. If you have other children aged ten or above in the house, they’ll need to fill out a written consent to adoption for you. Finally, you’ll need at least three (3) character references who will prepare letters attesting to your character and general reputation. The NACC will use these to review your suitability for caring for a child. By keeping these in mind, you’ll be able to make the beginning of your adoption smooth sailing. In the next part of this series, you’ll be able to get an overview of the adoption process so that you’ll know what to expect throughout. (to be continued) Are you in need of legal advice? Visit sadsadtamesislaw.com to get your first consultation with one of our lawyers.

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A Worker’s Quick Guide to Holiday Pay

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This year’s Independence Day has made it the perfect opportunity for groups of friends and families alike to plan a short getaway. After all, everyone loves a long weekend. Some even look up a list of long weekends for the rest of the year so they can work out their vacations for months in advance. But before you finalize your plans, it’s good to fully know all the ins and outs of holidays and holiday pay. Here’s everything you need to know when another holiday rolls around. Regular Holidays Holidays in the Philippines are considered either a regular holiday or a special non-working holiday. The easiest to remember are regular holidays, such as Christmas or Independence Day. Holiday pay allows you to get one day’s worth of your regular wage on a regular holiday. This is as long as you were present or on a leave of absence the day preceding that holiday. DOLE’s Handbook on Workers’ Statutory Monetary Benefits states that “Every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate (daily basic wage and COLA).” If you choose to work on a regular holiday, or if two holidays fall on the same day, you’ll be able to receive double your regular daily wage. If you choose to work when there are two holidays at once, you’ll receive triple your daily wage. Note that some are exempted from the holiday pay, such as government employees, kasambahay workers, certain managerial employees, certain members of a managerial staff, field personnel, commission-based workers, and those of retail/service establishments with less than ten employees. Special Holidays On the other hand, special holidays are usually either enacted by the Congress or declared by the President. Examples of special holidays include All Saints’ Day or the Feast of Immaculate Conception of Mary. Special holidays are divided further into two categories: non-working and working holidays. Examples of special non-working holidays include All Saints’ Day and the Feast of Immaculate Conception of Mary. These holidays follow a “no work, no pay” principle. You are allowed to skip work on these days, but you will not be able to claim any holiday pay. However, should you choose to go to work, you’ll be able to receive an additional of at least 30% your regular daily wage. If you choose to go to work on a non-working holiday that also falls on your rest day, you’ll receive an additional of at least 50% your daily wage. These increases are considered your ‘premium pay.’ Finally, special working days are similar to ordinary workdays. You still won’t be able to claim any holiday pay, nor will you receive premium pay if you choose to attend work. Knowing which holidays fall under which category can help you know how much additional pay you’re entitled to, depending on whether you attend work or not. That way, you’ll be able to enjoy your well-deserved vacation without any worries. If you want to start planning your long weekends, Rappler posted a list of long weekends in 2023.

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