Realty business, nowadays, are even becoming more aggressive and sophisticated with the advent of technological advancements on design and marketing their products. Tax implication of real property disposition basically depends on its classification for tax purposes: ordinary asset or capital asset. To determine for tax savings, the author suggest that a proper study be made as there could be some tax minimization schemes that may help legally reduce tax dues.

As to taxability, it is either VATable or non-VATable. If VATable, it maybe subject to 12% regular rate or 0% under certain conditions. On the other hand, if non-VATable, it maybe VAT-exempt, covering those which are not subject to VAT but subject to other percentage tax (OPT) of 3%, or those which are neither subject to VAT nor to OPT. Seems so confusing, right?

“Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to value-added tax (VAT)…”(Section 105 of the Tax Code, as amended.) The rate is 12% of the gross selling price or gross receipts.

VAT is a business tax [...]

This post covers tax implications of renting residential dwellings such as an apartment, condominium unit, and a house and lot in both sides-the lessor or owner and the lessee or tenant. Tax implication would depend on the monthly rental of such units. For every lease contract, a documentary stamp tax (DST) at the rate of [...]