QUESTION : Besides the cost of the property itself, what are the other fees , closing fees, that I as a buyer must sort out? ANSWER : Besides the property’s purchase price, there are also fees and taxes that you as a buyer must sort out. Note, however, that this article is just a general guide to help you get your finances ready. The total cost of purchasing a home will differ depending on the circumstances of the sale and how you are financing your home. For this reason, it is very important that you seek the advice of professionals, such as licensed brokers,Consultant, accountants, or even a lawyer. 1. Documentary Stamps Tax Documentary Stamps Tax (DST) is a type of tax levied on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, right, or property. In the case of a sale of a transfer of a real property or a Deed of Absolute Sale, the tax rate is 1.5 percent or Php15 for every Php1,000 of the property’s selling price, zonal value, or fair market value, whichever is higher. 2. Transfer Tax This is a tax imposed on any mode of transferring the ownership of a real property, either through sale, donation, barter, or any other mode. This varies to a low of 0.5 percent to a high of 0.75 percent of the zonal value of selling price of the property, whichever is higher, depending on the municipality where the property is located. To determine the exact amount, the buyer should consult with the City or Municipal Treasurer. 3. Registration Fee This fee is paid for the registration of a deed of sale, conveyance, transfer, exchange, partition, or donation of a real property and is paid to the local Registry of Deeds or Land Registration Authority where the property is located. To make the calculation simple, let’s use Php1.7 million as the property’s selling price, an amount that incurs a registration fee of Php8,796. However, if the property’s selling price exceeds Php1.7 million—for example, Php2 million—the buyer will add Php90 for every Php20,000 in excess of Php1.7 million. Hence, the Registration Fee for a property worth Php2 million will be Php10,146. 4. Notarial Fee The Deed of Absolute Sale should be also notarized, which requires a fee of about 0.1 to 0.15 percent of the property’s selling price. 5.Documentation Fees, 6. Other Administrative and handling fees in order transfer tittle to buyers name. 5. Loan Fees Lastly, if the buyer applies for a housing loan, there are extra costs tied to it, such as an appraisal fee, handling fee, mortgage redemption insurance, and fire insurance. This depends on the bank or lender, so make sure to shop around to find out who offers the best rate.
Posted on: Sat, 25 Oct 2014 08:59:08 +0000
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