Section 24. Income Tax Rates (D)
Final Tax for sale of real property is 6% of the total gross selling price or current fair market value, whichever is higher.
Capital gains is presumed to have been realized on the real property classified as capital asset, located in the Philippines, from:
- sale (including pacto de rectro or other conditional sales)
- other disposition
Provided that the tax liability if any, on gains from sales or other dispositions of real property to the government or any of its political subdivisions/agencies or to GOCC’s shall be determined either under Section 24 (A) or under this Subsection, at the option of the taxpayer;
Exception to the General Rule. (to be exempt from capital gains tax)
Sale of principal residence by natural persons.
- The proceeds of the sale shall be fully utilized in acquiring or constructing a new principal residence.
- period: within 18 calendar months from the date of sale of principal residence
- additional condition: Provided that the cost (historical or adjusted basis of sales amount) shall be carried over to new principal residence to be built or purchased
- additional condition: Provided further – CIR has been duly notified by taxpayer within 30 days from date of sale/disposition of principal residence of the intention to avail the tax exemption.
- additional condition: This privilege can be availed of only once every 10 years.
- additional condition: If all the proceeds are not fully utilized, shall be subject to capital gains tax from the sale of the principal residence.
- How computed: multiplied by a fraction which the unutilized amount bears to the gross selling price of the principal residence sol