Various topics on real estate, brokerage and the laws and regulations
I posted this announcement in my website last October 2011. But, I forgot to post it here.
The HLURB approved last June 24, 2011 the IMPLEMENTING RULES & REGULATIONS of Republic Act No. 9904, otherwise known as the “Magna Carta for Homeowners and Homeowners Association.” For a copy, click on the link above.
To read other articles that I have published recently, kindly go to the REALTTORNEY website.
By Ernesto C. Perez II
“Bakit ako magpaparehistro sa BIR? Eh, dati naman kahit nung nasa DTI pa lisensyado ang brokers hindi naman kailang iyan?”
That was the reaction of a fellow licensed real estate broker when I explained to her that under Republic Act No. 9646 – the Real Estate Service Act of the Philippines (RESA) – ALL licensed real estate service practitioners (brokers, appraiser/valuers, and consultants) are mandated to “establish and maintain a principal place of business and such other branch offices as may be necessary.”
I was in the middle of preparing to submit my documentary requirements for registering my real estate business at the Indang Municipal Hall. Thereafter, I was to proceed to the Revenue District Office of the BIR at Trece Martires City.
In order to refresh everyone’s memory, Section 33, RA 9646 states the following:
“Section 33. Display of License in the Place of Business. – Every registered and licensed real estate service practitioner shall establish and maintain a principal place of business and such other branch offices as may be necessary, and shall conspicuously display therein the original and/or certified true copies of his/her certificate of registration as well as the certificates of registration of all the real estate service practitioners employed in such office.”
Prior to the passage of RA 9646, any Tom, Dick and Harry – or for that matter any Anne, Jane or Matilda – can act as an agent of a party in a real estate transaction for the buying or selling of real properties for a “commission.” In such a transaction, “laway lang ang puhunan” as the saying goes.
Then you hear stories of so-called pseudo-brokers fight over the piece of the “commission” pie even before the sale is consummated. You also hear stories of unscrupulous pseudo-brokers defrauding their clients. There was no Code of Ethics being followed.
However, the passage of RA 9646 did not fully address this situation. But it was a step forward in the right direction – professionalize the practice, hold accountable erring licensed professionals and prosecute pseudo-brokers that still proliferate to this date.
RESA does not only require licensed professionals like us to establish a place of business, it also requires us “to indicate the certificate of registration, professional identification card, PTR number, and APO receipt number, and the date of issuance and the duration of validity on the documents he/she signs, uses or issues in connection with the practice of his/her profession.”[1]
In my previous blog (Reminders As 2012 Roll In), I reminded my fellow professionals to get their Professional Tax Receipt from the Office of the Treasurer of the local government unit where they reside, as a first step. The rest of the steps listed there are on how to register with the BIR. Do check it out for your reference to know the most important reason why we should register with the BIR.
RESA imposes on us the requirement to establish and maintain a principal place of business in order to legitimize our profession as a business and main source of livelihood for some. And, when we are required by law to establish our place of business then we should follow the regulatory processes of having our business registered with the appropriate government agencies.
In a 2008 report “Doing Business in the Philippines” the World Bank pointed to the need to improve the efficiency of local business and other regulatory processes —such as the issuance of business permits, licenses and the imposition and collection of business taxes—which currently serve as disincentives to many businesses. Typically, these processes involve numerous procedures that are not only inefficient but also create opportunities for corruption.
Notably, the Philippines ranks very low among East Asian countries in terms of ease of doing business; it only ranked higher than Cambodia, Lao PDR and Timor-Leste. Singapore followed by Hong Kong, Thailand, Malaysia, Taiwan, Mongolia, Brunei, Vietnam, and Indonesia ranked higher.
The Philippines also requires a much larger number of entry procedures (15) to start a business compared to other East Asia countries and consequently entails higher transaction costs.
This fact should not be a hindrance to us in trying to follow such regulatory procedures. As a group of professionals, we should suggest ways to improve and make efficient such regulatory process. But in the meantime, we follow what is required of us to do in registering our business – from procuring the Mayor’s (Business) Permit to registering with the BIR.
Tomorrow we shall discuss the steps to starting your real estate business.
[1]Section 38, RA 9646.
“By the taxes he pays, a citizen has every right to demand for a good and honest government.”
– Franklin D. Roosevelt
By Ernesto C. Perez II
I wish all licensed real estate service practitioners – brokers, appraisers, consultants and government assessors – a prosperous and abundant 2012. If we are to believe the prognostications made last year, the real estate industry will continue its boom this year.
This is good for us who can expect more business to come our way this year. As we start a new year, I wish to outline some reminders that need to be performed by all licensed real estate professionals pursuant to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).
First, in Section 28, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification car, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”
Therefore, all licensed real estate service practitioners should get a PTR. It cost around P300.00 and you can get this at your City Hall. Just say that you will get a PTR at the Office of the Treasurer. The Privilege Tax Receipt mentioned in the IRR is the same as the Professional Tax Receipt mentioned in the Local Government Code.
Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of P500.00 using the BIR Form 0605. You can remit the payment at the BIR Revenue District Office (RDO) that you registered in or at the Authorized Agent Banks of the concerned RDO.
Now, if you are still not registered with the BIR then you must do so in order not to be in trouble with the Bureau as they are stepping up their efforts to collect taxes and plug the budget deficit of the country. The BIR has its eye on the professionals this 2012.
On 27 December 2011, the headline in the article in Philippine Star bannered “BIR targets 15% hike in income tax collection.” The news item said that the Bureau expects more self-employed professionals to comply with the tax rules in 2012.
Citing data from the Professional Regulation Commission, the BIR said there are some 3 million registered professionals in the country – that it includes licensed real estate service practitioners. The BIR said “the average annual income tax payments of professionals, however, average less than the monthly minimum wage of P8,500.”
As licensed real estate service practitioners, we should take this as a warning that the BIR means business. In response to this, we should make the necessary steps to be above board and follow the letter of the law, as we swore to during our oath taking as licensed professionals. Sundin natin ang matuwid na daan.
I will quickly outline below, the steps to register with BIR as a self-employed individual (professional):
STEP 1: Secure and fill up BIR Form 1901 – Application for Registration for Self-Employed and Mixed Income Individuals, Estates/Trusts.
STEP 2: Submit the same with the following documentary requirements to the RDO having jurisdiction over the place where you hold office – it could be a home office or a commercial office space.
Documentary Requirements:
Other documents for submission, if requested:
STEP 3: Pay the Annual Registration Fee (P500.00) at the Authorized Agent Banks of the concerned RDO.
STEP 4: Pay Documentary Stamp Tax (DST) [loose DST / BIR Form 2000 for DST on Contract of Lease, etc.). Present proofs of payment upon submission of the documentary requirements.
STEP 5: Submit requirements for Authority to Print (ATP) and registration of books of accounts.
Documentary Requirements:
Book of Accounts:
STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants in order to apprise them of their rights and duties/responsibilities as taxpayers.
STEP 7: Wait for the RDO to issue the Certificate of Registration (BIR Form 2303) together with the “Ask for Receipt” notice, Authority to Print and Books of Accounts.
For a more comprehensive discussion on the steps enumerated above including the related revenue issuances promulgated by the BIR and codal references in the National Internal Revenue Code can be found in the BIR website (www.bir.gov.ph).
A final reminder to all brokers reading this article. The tax code states that “all individuals engaged in trade or business shall accomplish and file the application on or before the commencement of business operation or from the day the first (1st) transaction occurred or within thirty (30) days from the application with the LGU for issuance of Mayor’s Permit/Professional Tax Receipt (PTR), which ever comes earlier.”
I suggest that all licensed real estate service practitioners – in particular, those brokers, appraisers, and consultants – who have not registered with the BIR to do so. In 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.” You can buy a copy of his book at his website at www.alexlacson.net.
“PAY YOUR TAXES” is the 10th Little Thing he listed. I end by quoting some portions of what he wrote in pages 75 – 80, which resonates the same message as if it was written last year:
“Of the many duties of a citizen under our Constitution, paying taxes is one of the most crucial. Because taxes are the lifeblood of our government, of our nation.
“It is what we use to buy the basic textbooks for our millions of children in the country, or to build additional classrooms in public schools nationwide…
“Taxes are what we use to buy the most basic of medicines, often generic and cheap, that our Department of Health officials distribute to 34 million Filipinos nationwide who live below the poverty line.
“It is what we use to pay all our government employees nationwide – our soldiers, our policemen, our public school teachers, among many others.
x x x
“Viewed in this light, the taxes that you and I pay are actually not lost or wasted completely. A substantial portion of the taxes we pay is still put to good use. Because there are many public servants – not only a few or some – who still do their jobs properly. There are many of them, these honest and faithful ones, but maybe many of them are just in the rank and file, like you and me.
“But they are there. Among the silent many who hold the center and keep our government from falling apart. They are the ones who keep our public institutions intact through storms and scandals, notwithstanding the misguided ambitions and corruption of some of their leaders.
“It is for this reason that we should continue paying our taxes. The good ones in the government are still good reason for us to continue paying our taxes properly. The challenge for us is just how to increase the number of these good ones in government.
x x x
“In 2003, P83 Billion was collected from individual income taxes. But 91% of this amount came from salaried workers from the government and private sector, people who have no choice since their income taxes are withheld mandatorily. Only P7 Billion of P83 Billion (or 9%) came from businessmen and professionals like doctors, lawyers, accountants, architects, and dentists, among others.
“But how can this be? Guillermo de Joya, spokesman for Filipino-Chinese Chamber of Commerce & Industry, told the Senate on 12 October 2004 that there are at least 50 Billionaires and 42,500 millionaires in the country who do not pay taxes properly.
“Can you imagine if our businessmen and professionals pay more income taxes? Or if our government is able to collect 21% this year instead of the 14.1% last year, because we all decided to pay 50% more of taxes this year? This means that our government will have more funds to perform its duties and obligations to the public.
x x x
“But we have to pay our taxes properly. Because we all live in the same country. Because this government, whether we like it or not, is our government. Its cost is a burden we must all share. The task of building this nation is a task that we all must share. We all must contribute to build this kind of nation we dream for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”
Hi Everyone,
I invite you to check out my very own website at www.realttorney.com.
It’s where I publish my latest posts. However, it is still under construction to improve its contents and look. I hope you like it. Your comments and suggestions are most welcome. Thanks.
The Board of Trustees of MUNREB regrets to inform everyone that the CPE scheduled on June 22 – 24, 2011 at the Alabang Country Club, Ayala Alabang Village, Muntinlupa City is CANCELLED. Please be guided accordingly. Thank you for your understanding.
MUNREB will conduct a Continuing Professional Education Program for licensed brokers on June 22, 23, and 24, 2011 (Wednesday to Friday) at the Alabang Country Club, Ayala Alabang Village, Muntinlupa City.
We are still in the process of finalizing the topics and roster of speakers for this year’s CPE.
Those who have yet to file their applications for registration with PRC and who require additional CPE units for this purpose are strongly encouraged to attend on June so as to meet the July 30, 2011 deadline for PRC Registration Without Examination under the grandfather clause of RESA.
The following is the table of units offered and the corresponding fees:
Pre-reg fee:
Php3,000 (for 8 units)
Php6,000 (16 units)
Php8,000 (24 units)
On-site fee:
Php4,000 (8 units)
Php8,000 (16 units)
Php10,000 (24 units)
Pre-registration is on June 8, 9, and 10 from 10am to 12noon ONLY.
Those interested to pre-register may proceed to 703 Common Goal Tower Madrigal Business Park Ayala Alabang, Muntinlupa City on any of the dates and time specified. Look for the Treasurer of MUNREB, Ms. Maricar Sison.
Registration beyond June 10 will be considered on-site registration, and will thus be subject to the regular fees on the table above.
For further details you can go to the MUNREB POST – the official site of PAREB – Muntinlupa Realtors Board.
See you all there.
