Property Transaction: Philippines Guide

Note: Try accessing the Bureau of Internal Revenue (BIR) Philippines website for the zonal values, and the Lamudi website for specific property listings in Parañaque, the provided guidance below is based on general practices and principles applicable in the Philippines. This should help outline the process of assessing a property's value for capital gains tax and other considerations during a property transaction, especially between siblings.

Assessing the Property Value

When assessing a 308 sqm bungalow (4-bedroom) in Parañaque, the commercial listing price from Lamudi, cited as PHP 31,800,000, serves as the market value. However, for tax purposes, the BIR's zonal valuation is crucial. This valuation typically determines the minimum value at which capital gains tax is computed if it's higher than the selling price.

### Capital Gains Tax Computation

The capital gains tax on the sale of real property in the Philippines is usually 6% of the gross selling price or the BIR zonal value, whichever is higher. Without the exact zonal value from the BIR website, you'd typically check the zonal valuation for Parañaque (or the specific barangay) on the BIR website and apply the 6% rate to the applicable base.

### Buyer's and Seller's Obligations

**Seller's Obligations:**

- Pay the capital gains tax (6% of the gross selling price or zonal value, whichever is higher).

- Provide necessary documents like the Certificate Authorizing Registration (CAR) from the BIR.

**Buyer's Obligations:**

- Pay the Documentary Stamp Tax (DST), Transfer Tax, and Registration Fee.

- DST is 1.5% of the selling price or zonal value, whichever is higher. Transfer Tax varies by local government unit but is usually 0.5% to 0.75% of the selling price or zonal value. The Registration Fee is based on a sliding scale depending on the selling price.

### Transactions Between Siblings

For transactions between siblings, the considerations are the same for taxes and obligations. However, if there's a concern about compensating for potential rental income loss, this would be a private agreement beyond the statutory obligations. The parties might agree on a higher purchase price or additional compensation to acknowledge the rental income the seller is foregoing.

### Additional Costs and Practices

In such transactions, it's also wise to consider other costs like notarial fees for deed of sale, real estate agent's commission (if applicable), and any adjustments for property improvements or liabilities tied to the property.

Since property and tax laws can be complex and subject to change, consulting with a real estate professional or a tax advisor in the Philippines is recommended to ensure compliance with current regulations and to tailor the transaction to the specific circumstances of the buyer and seller.

Basis URL:

https://www.bir.gov.ph/index.php/zonal-values.html#rdo043

And 

https://www.lamudi.com.ph/metro-manila/paranaque/house/buy/

Image inset: by JaCertAI Images, The image capturing the moment of two brothers, one selling and the other buying, with the property and blueprint in the background. It visually represents the transfer of ownership and the familial bond in this significant transaction.