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  • How Can a “Dead” Corporation Sell Its Real Estate in the Philippines?

    “There is something fundamentally wrong in treating the Earth as if it were a business in liquidation.”

    – Herman E. Daly, American Economist

    (Part 1 of 4)

    By Realttorney®

    On April 24, 2025, I attempted to answer this question during the Continuing Professional Development (CPD) seminar sponsored by my mother chapter, REBAP Metro Tagaytay.

    Real estate service practitioners (RESPs) in the Philippines occasionally encounter a peculiar situation: a parcel of land or a piece of property remains registered under the name of a corporation that no longer operates. This scenario prompts a legal and practical question: Can a “dead” corporation still sell its real estate? If so, how?

    For those who missed the CPD Event, this article explores the legal framework and procedures involved in the sale of real estate assets owned by a dissolved corporation, often referred to as a “dead” corporation. Drawing from the Revised Corporation Code of the Philippines (Republic Act No. 11232), relevant SEC regulations, and Supreme Court jurisprudence, we offer a proficient guide for real estate service professionals, lawyers, and estate planners alike.

    The Rise and Fall of Family Corporations. During the late 1970s up to the 1990s, it was common for Filipino families to form corporations as vehicles for managing their businesses and real estate assets. This strategy offered benefits such as:

    • Easier access to capital through institutional financing
    • Trust and control within the family structure
    • Efficient estate planning and intergenerational wealth transfer

    However, many of these corporations eventually became inactive or failed to comply with the annual regulatory filings, such as audited financial statements (AFS) and general information sheets (GIS). As a result, they were either administratively dissolved by the Securities and Exchange Commission (SEC) or voluntarily terminated by their shareholders.

    The assets of these dissolved corporations – including real estate – remain under their name on record, leading to legal complexities when a sale is contemplated.

    What Does It Mean for a Corporation to “Die”? Under Philippine law, the “death” of a corporation refers to the termination of its juridical existence. This may occur in several ways:

    1. Non-organization or non-operation. If a corporation fails to formally organize or start its business within two (2) years under Batas Pambansa Blg. 68 [now five (5) years under R.A. No. 11232], it is deemed dissolved.
    • Inoperative status. If a corporation becomes continuously inactive for five (5) consecutive years, it may be placed under delinquent status, and if it fails to comply with SEC requirements within the next six (6) months, the SEC may revoke its certificate of incorporation.
    • Non-filing of reports. Failure to file financial statements or GIS for three instances within five years also results in delinquency and possible revocation under SEC Memorandum Circular No. 19, Series of 2023.

    Once a corporation’s certificate of incorporation is revoked, it can no longer conduct business as a juridical entity, except for one purpose: liquidation.

    Understanding Dissolution vs. Liquidation. To appreciate how a “dead” corporation may still sell its real estate, we must distinguish between two key concepts.

    First, DISSOLUTION. Dissolution is the legal termination of the corporation’s existence. It is the formal end of its corporate life and may be: (1) voluntary, initiated by the shareholders or board of directors; or (2) involuntary, imposed by the SEC for violations such as inoperation or failure to file reports.

    It should be noted that once dissolved, a corporation ceases to exist for regular business purposes.

    Second, LIQUIDATION. Liquidation is the process that follows dissolution. It involves: (1) settling debts and liabilities; (2) collecting receivables; (3) disposing of corporate properties; and (4) distributing remaining assets to shareholders.

    The Revised Corporation Code (Section 139) provides that a corporation remains a body corporate for three years from the effective date of dissolution, but only for liquidation purposes. It cannot resume business operations, but it may still convey or sell property as part of winding up its affairs.

    The Three-Year Winding-Up Rule

    According to Section 139 of the Revised Corporation Code, “Every corporation whose corporate existence is terminated in any manner shall nevertheless remain as a body corporate for three (3) years… to settle and close its affairs, dispose of and convey its property, and distribute its assets…”

    This provision ensures that the corporation’s residual obligations can be fulfilled and that its assets are not stranded. It allows the appointment of liquidators or trustees to manage the sale of properties, including real estate.

    However, once the three-year winding-up period expires, the corporation no longer retains any capacity to act – unless its remaining assets were previously transferred to trustees.

    Why Is This Relevant to Real Estate Brokers and Other Professionals? In the real estate service practice, professionals often encounter situations where:

    • A parcel of land is titled under a long-dissolved corporation.
    • There is no designated liquidator or board resolution authorizing the sale.
    • The three-year liquidation window has already lapsed.

    Understanding how to legally facilitate the sale of such properties is not only crucial for compliance but also for protecting buyer interests and the integrity of licensed real estate brokers.

    In the next part of this series, we will explore the step-by-step procedure for selling real estate owned by a dissolved corporation, depending on whether the transaction occurs within or after the three-year liquidation period.

    Stay tuned for Part 2: “Step-by-Step Guide to Selling Real Estate Registered in the Name of a Dissolved Corporation.”

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • The 99-Year Lease Debate: Implications for Real Estate and Other Looming Risks

    (Part 2 of 2)

    By Realttorney®

    Despite the passage of the “99-Year Lease Law” on third and final reading by both Houses of Congress on December 24, 2024, there is a chance that it will not become law in the next 6 months. After the May 2025 elections, it seems our legislators may have no appetite to push for the harmonization of the 2 versions of the bill in the bicameral conference, and the subsequent ratification of the approved version by both chambers of the Congress of the Philippines.

    While the proposal to amend Republic Act No. 7652 to extend the lease term for foreign investors to 99 years aims to attract more foreign capital and boost economic growth, it has generated several arguments against its enactment into law. Let us discuss some of these criticisms here.

    This is an opportune time for all real estate stakeholders to learn about the various risks and challenges if the proposed amendments become law. And, by the end of the article, we shall discuss the key takeaways for real estate service practitioners as they practice and serve valued clients in their chosen profession.

    As discussed in the previous article, the proposed amendments to Rep. Act No. 7652 seem constitutionally sound. However, critics argue that a 99-year lease is practically equivalent to foreign ownership of land, which is prohibited under the Philippine Constitution to protect national patrimony. Cause-oriented groups fear this could create loopholes allowing foreigners and foreign-owned entities to gain excessive control over the country’s land and resources over an extended period.

    In addition, detractors of the “99-Year Lease Law” view this 99-year lease contract as a multi-generational lease, far exceeding the average global life expectancy. As such, this long duration raises concerns about the potential for foreigners and foreign-owned entities to establish long-lasting dominance over strategic lands all over the Philippines.

    Furthermore, the extended security over private lands provided to foreign investors may create an uneven competitive landscape. Local enterprises may face challenges competing with foreign investors who have greater incentives and long-term stability in land access. This imbalance could hinder the growth and success of local businesses in the real estate sector.

    Hence, while the extension of a lease up to an aggregate period of 99 years may bring opportunities for growth and development in the real estate market, it is crucial to carefully consider and address the potential challenges and risks associated with this incentive. Therefore, we should understand the risks and learn how to mitigate them so that the real estate sector can continue to thrive and contribute positively to the Philippine economy.

    What are the potential challenges facing the real estate sector if Rep. Act No. 7652 is successfully amended?

    One major concern is the reduced availability of private land for domestic use. Long-term leases effectively take land out of circulation for nearly a century, which could worsen the scarcity of prime land in urban and highly industrialized areas. This scarcity may drive up costs for local businesses and residents, impacting the overall economic landscape.

    The passage of this law will impact the housing market, especially the socialized, low-cost to mid-market housing projects, in a negative way. Apart from the issue of affordability of such housing units, the passage of the “99-Year Lease Law” will drastically affect the supply of such housing projects, thereby exacerbating the ability of government to provide decent and affordable housing units to the low-income Filipinos.

    In addition, there is apprehension that the extended lease terms could lead to increased land values, potentially displacing local investors or developers and making it harder for Filipinos to afford land and housing in their own country.

    What are the potential negative impacts on agriculture and the local communities tied to agriculture?

    Socio-civic organizations have raised concerns that agricultural lands awarded to agrarian reform beneficiaries (ARBs) could be targeted for long-term lease for 99 years by foreign investors or foreign-owned entities. If so, this will undermine the goals of land redistribution and, most importantly, food security.

    Therefore, this amendatory bill, if signed into law, could lead to the expansion of large-scale agribusinesses controlled by foreign corporations, to the detriment of small-scale farmers and other local food producers in the Philippines.

    Historically, the government’s Comprehensive Agrarian Reform Program (CARP) is designed to ensure the fair distribution of land to farmers and enhance agricultural productivity. The proposed amendments to the Investor’s Lease Act include provisions that require leases to adhere to agrarian reform laws.

    However, there are several concerns that need to be addressed. First, the detractors of the amendments see a potential risk that foreign investors may attempt to convert agricultural lands for industrial or commercial purposes. In their view, this could reduce the amount of land available for agrarian reform beneficiaries and jeopardize the long-term sustainability of the agricultural sector.

    But we have to remember that there are certain safeguards included in the amendments that would hopefully prevent these things from happening. If such eventualities happen, then it would not be the failure of the letter of the law and its implementing rules and regulations, but due to the weakness of the character of those implementing the agrarian reform law and the implementing agencies of the amendatory law.

    Second, and this is my opinion, enacting these amendments into law without the overall framework of a National Land Use Plan would present great regulatory challenges for the government regulators to manage and plan the use of land that is best for the Philippines, its regions, provinces, and cities.

    Without a comprehensive land use plan, each local government unit (LGU) will compete for the setting up of investment projects in their localities while sacrificing the need for human settlements, food production, and the protection of the environment and ancestral domains, if any, within their territorial jurisdiction.

    Monitoring and enforcing compliance of land use regulations of each LGU will be fragmented at best and may place a strain on government resources. Without effective oversight, there is a possibility of exploitation or non-compliance with the objectives of the Investor’s Lease Act, the laws on the environment, agrarian reform and other regulations.

    Furthermore, critics worry that the bill’s definition of “private lands” might be vague enough to include ancestral domains, putting these lands at risk of being leased to foreign investors and eroding the heritage and identity of indigenous communities. But of course, Rep. Act No. 8371 (the Indigenous Peoples’ Rights Act) will hopefully provide adequate protection and safeguards to the Indigenous Peoples’ Ancestral Domains.

    On a positive note, the proposed amendments to the Investor’s Lease Act could attract foreign investments in agro-industrial ventures. This could lead to increased employment opportunities for farmers and the introduction of modern agricultural technologies for the use of Filipino farmers.

    Thus, while the government’s land reform program has the potential to bring about positive changes in the agricultural sector, it is crucial to address the aforementioned concerns to ensure all stakeholders in the agricultural sector benefit from all foreign investments in agriculture and agro-industrial ventures.

    Economic Dependency and Lack of Real Impact: Some argue that such a long lease term could lead to economic dependence on foreign-owned entities, with control over significant land areas potentially shifting to foreign interests. Moreover, analysts suggest that the length of the land lease might not be the primary deterrent to foreign investment in the Philippines. Other factors like expensive power, poor infrastructure, governance issues, and graft and corruption might be more significant constraints. Therefore, extending the lease term alone might not guarantee a substantial increase in foreign investment or long-term economic development.

    What then are the key takeaways for Real Estate Service Practitioners?

    The proposed amendments to the Investor’s Lease Act could bring forth a myriad of challenges and opportunities for real estate service practitioners (RESPs) and real estate investors and developers.

    The first thing to keep in mind is the possible rise in demand for advisory services for RESPs. With lease terms being extended, foreign investors will seek expert guidance to navigate local laws and ensure the legality and sustainability of their lease agreements.

    Second, the increase in foreign direct investments in the Philippines may lead to an increase in demand for medium-scale or large-scale property development projects, opening doors for local partnerships and joint ventures for the clients of RESPs or the RESPs themselves.

    Third, the possible growing demand for real estate projects will necessitate that RESPs conduct thorough due diligence to guarantee that leased properties adhere to agrarian reform laws and local zoning ordinances, among others.

    Finally, it is imperative for RESPs to play a role in advocating for policies that strike a balance between protecting national interests and fostering economic growth. Ultimately, RESPs must be agents of positive change for all stakeholders in the real estate industry.

    RESPs must be prepared to adapt to the changes brought about by the forthcoming amendments to the Investor’s Lease Act and seize the opportunities it presents. By staying informed and proactive, RESPs can navigate the evolving landscape of the real estate industry with confidence and success.

    In conclusion, the proposed amendments to the Investor’s Lease Act demonstrate the government’s dedication to attracting foreign direct investments. While the proposed 99-year lease period is constitutionally acceptable, it is crucial to consider the potential drawbacks, such as impacts on land availability, the real estate market, and the land reform program, among others.

    To ensure that this policy achieves its objectives without compromising national interests, it is essential to establish robust safeguards, clear regulations, and transparent implementation by government officials. For professionals in the real estate industry, this development highlights the importance of staying informed and proactive in guiding clients through the changing legal landscape.

    Whether assisting foreign investors or safeguarding the rights of Filipino landowners, the real estate sector must serve as a conduit between opportunity and compliance. While proponents argue that a 99-year lease term will attract foreign investment and stimulate the economy, opponents voice significant concerns regarding national sovereignty, potential displacement of local communities, negative impacts on agriculture, questionable economic benefits, and potential legal complexities.

    The stakeholders in the real estate industry, especially RESPs, should urge Congress and the Executive Department to exercise caution and prioritize the long-term interests of Filipino citizens and national patrimony.

    Do you have anything to add? Or do you disagree with what we have written? Your comments will be very much welcomed.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • 5 Critical Things to Know About the Real Property Valuation and Assessment Reform Act

    “Per World Bank estimates, the Philippines’ real property taxes account for only 0.37% of the Gross Domestic Product (GDP) with an overall collection efficiency of 71%.”

    – OIC-Director Brenda L. Miranda, BLGF Local Fiscal Policy Service

    House approves the Real Property Valuation and Assessment Reform Bill (https://blgf.gov.ph)

    By Realttorney®

    Sometime on April 2-4, 2013, ranking officials of our Department of Finance (DOF) presented “Property Tax Reforms in the Philippines” during the Fourth IMF-Japan High-Level Tax Conference at Hotel Nikko, Tokyo, Japan. During this event, the Philippines identified eight (8) Issues and Challenges regarding our property-related tax administration system.

    The eight are as follows: (1) lack of uniform property valuation systems and methodology; (2) outdated real property values; (3) political interference in property valuation; (4) limited use of information technologies in the appraisal process; (5) multiple taxes on property ownership and transfers; (6) relatively high transfer taxes, which discourage formal transactions; (7) weak enforcement of property-related taxes; and (8) no provision for formal education and training of assessors/appraisers

    The promulgation and adoption of DOF Department Order No. 37-09 [Philippine Valuation Standards, 1st Edition] on October 19, 2009, continues to address the first item above, while the passage of Rep. Act No. 9646 addressed the last item on the list.

    Meanwhile, the various Joint Memoranda of the DOF and the DILG enjoined all Local Government Units (LGUs) regarding the regular preparation of Schedule of Market Values (SMV) and the conduct of general revision of property assessment in their respective jurisdictions.

    Way back on May 12, 2012, the House of Representatives passed the Valuation Reform Bill [House Bill No. 6044] to address most of the 8 Issues and Challenges mentioned above. However, the Senate of the Philippines failed to pass the counterpart bill at that time until recently.

    In the 2022 State of the Nation Address (SONA), Pres. Marcos, Jr. identified the Real Property Valuation and Assessment Reform Act (RPVARA) as one of his Administration’s priority legislations, and a key tax reform under the Comprehensive Tax Reform Program under the Duterte Administration.

    On December 12, 2022, the House of Representatives passed on third and final reading, the Real Property Valuation and Assessment Reform bill [House Bill No. 6558]. Thankfully, this time, the Senate of the Philippines had counterpart bills on hand.

    In the Explanatory Note of Senate Bill No. 897, filed by Sen. Pia S. Cayetano on July 26, 2022, she stated that “there are various agencies conducting or requiring property valuation, with each agency using their own system and methodology of valuation” of the economy, including the real estate industry. Understanding these implications is crucial for real estate professionals, investors, and policymakers.

    Senate Bill No. 2386 was passed on the third and final reading on March 11, 2024, via a unanimous vote by all 23 Senators present. Both Houses of Congress ratified the final version of the bill on March 20, 2024. The President approved the bill as Republic Act No. 12001 on June 13, 2024.

    As a real estate service practitioner (RESP), what do you need to know about this crucial tax reform program that was signed into law in June 2024?

    1. Updated and Fairer Property Valuation: According to RPVARA, it is the policy of the State to promote the development of a just, equitable, and efficient real property valuation system. Thus, it aims to establish uniform appraisal standards and procedures. This should lead to more accurate and consistent valuations across the country, reducing unfair tax burdens on property owners.

    According to Ma. Pamela Quizon, Director of the Bureau of Local Government Finance (BLGF), this reform bill will address the current inefficiencies in the system such as overlapping valuation. She stressed that there are currently 23 national government agencies requiring valuations of 1,715 LGUs.

    However, each government agency uses its own systems and methodologies which is causing wide disparities between zonal values, market values, and private appraisers’ values. Thus, leading to varying and multiple values for the same parcel of land or real property.

    RPVARA strengthened and expanded the powers and functions of the BLGF as the primary or lead implementing agency of this reform bill. The BLGF shall be the agency responsible for ensuring that valuations or revaluations are completed per standards outlined in the RPVARA.

    Finally, under the RPVARA, an updated schedule of market values (SMV) will be used as the basis for local and national land and property-related taxes. There shall be only one valuation for a specific real property.

    The SMV refers to a table of base unit market values for all kinds of real property, except machinery within an LGU, prepared by assessors according to existing laws, rules and regulations. LGUs are mandated to update SMV and its revision once every 3 years under Section 219 of the Local Government Code of 1991, as amended.

    2. Transparency and Efficiency: RPVARA shall develop and maintain the Real Property Information System (RPIS). This is an up-to-date electronic database of the sale, exchange, lease, mortgage, donation, transfer, and all other real property transactions and declarations in the country and on the cost of construction or renovation of buildings and other structures, and on prices of plant, machinery, and equipment.

    For this purpose, the BLGF shall require the mandatory submission of necessary documents from the concerned officials or employees of government agencies and instrumentalities, and LGUs. Towards this end, the BLGF shall establish mechanisms for the electronic submission of the required documents. Upon the creation of the RPIS, the private sector may access the database subject to the guidelines of the BLGF and the payment of a reasonable amount as an administration fee.

    This electronic database will centralize data on real estate transactions and shall be an important tool for all valuers – especially private appraisers who can now accurately prepare Appraisal Reports based on actual data of “comparables” in a given property location. No more educated guesses with the aid of Google and real estate listing sites.

    3. Streamlined Government Services: The RPVARA mandates all LGUs to automate their real property tax administration operations, such as but not limited to, tax mapping technology, maintaining software-enabled valuation systems, undertaking regular data cleansing, and computerized records management, with the guidance of the BLGF, in coordination with the Department of Information and Communications Technology (DICT). This could benefit the clients of RESPs involved in transactions requiring these services.

    Moreover, automating processes through the RPIS could expedite government activities related to property, such as right-of-way acquisition and land transfer tax administration which will redound to the benefit of its stakeholders.

    4. Taxpayer Relief: Republic Act No. 12001 grants a two-year amnesty on penalties, surcharges, and interest on real property taxes and special levies that were unpaid before the Act took effect (Section 30). The amnesty may be availed of within two years after the Act’s effectivity. A delinquent owner may pay the taxes in one lump sum or in installments. The amnesty does not apply to properties already sold at public auction for tax delinquency, properties whose delinquencies are covered by a compromise agreement, or properties subject to pending court cases on real property tax delinquencies. As noted above, this provision was not indicated in SBN 2386 or HBN 6558, but it appears in the enacted law, and it is a welcome addition to this important piece of legislation.

    This provides an opportunity for clients to settle outstanding tax obligations without extra charges and fend off the levy of the property and its public auction by the concerned LGU. It is a timely relief for landowners as they battle the effects of inflation and high-interest rates from 2021 up to the present. Because the window runs for two years from the Act’s effectivity, clients should confirm the exact deadline with the concerned LGU.

    5. Increase Collection of Real Property Taxes: The reform will broaden the tax base for local and national property and property-related taxes. With a wider tax base, the collection of real property taxes is expected to increase based on updated property values, which is most important to increase collection efficiency, and overall tax revenue by LGUs and the Bureau of Internal Revenue (BIR).

    Oftentimes, outdated property values result in unrealized revenues and socio-economic benefits from delayed projects, and conflicting land values which result in right-of-way (ROW) compensation problems, lengthy court litigations arising from valuation disputes, delayed projects, and cost overruns.

    With the increased collection efficiency, it is expected that LGUs will be able to translate this into better basic services for its constituents and critical infrastructure projects by the National Government based on the increased revenue-based national real property transfer taxes.

    With fairer valuations and a more transparent system, RPVARA would lead to a steady increase in market values of real properties in the Philippines at regular intervals without increasing the tax rates or introducing new taxes. Therefore, it is incumbent on RESPs to advise our clients as to the timing of such increases to take advantage of relatively low prices when they desire to purchase real properties.

    In conclusion, the Real Property Valuation and Assessment Reform Act brings several positive changes in the valuation system and the real estate sector in the Philippines in general. The reform bill shall implement a more efficient valuation system and will use a single valuation base, which will eliminate wide disparities caused by overlapping valuations.

    This would lead to consistency in real property valuation as well as the predictability of valuation. As such, the adoption of true market-based values for taxation purposes will increase revenues without necessarily adopting new tax measures.

    RPVARA endeavors to increase the capacity of the government to generate revenues from real property through the RPT, national government real property transfer taxes, and other related taxes. In addition, RPVARA aims to reduce government costs particularly unnecessary expenses incurred due to conflicting appraisals which lead to court litigations, project delays, and cost overruns.

    As RPVARA aims to implement uniform standards and efficient processes in the real property tax system, the government hopes that this will instill more confidence in the country’s real estate industry. In the end, the government desires to motivate and inspire real estate investors and public confidence because the valuation is done professionally, properly, and following current local and international standards.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • Unlocking Success: Why Registering with the BIR is Non-Negotiable for New Real Estate Salespersons

    “The Practitioner shall secure all necessary licenses, permits and authority as may be required by law, ordinance or rules and regulations.”

    – Section 1 (b), Article III, PRBRES Resolution No. 39, Series of 2019

    By Realttorney®

    On the third week of January 2024, I will once again be part of a Real Estate Brokerage Seminar for Entry-Level Salespersons, sponsored by PREVAIL, Inc. We are always looking forward to such an event since it signifies that a lot of illegal practitioners (colorum) desire to become legitimate real estate service practitioners (RESPs).

    Photo by Sora Shimazaki on Pexels.com

    Now, if you are still not registered with the BIR then you must do so to be compliant with the National Internal Revenue Code of 1998, as amended. We also should follow the laws of the Philippines as mandated by the Code of Ethics and Responsibilities promulgated in PRBRES Resolution No. 39, Series of 2019. Hence, BIR registration is a must for all newly accredited real estate salespersons.

    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:

    1. Birth certificate (Original and photocopy);
    2. Marriage certificate (Original and photocopy); and
    3. Birth certificate of children (Original and photocopy);

    Other documents for submission, if requested:

    1. Mayor’s Permit (Original and photocopy);
    2. Contract of Lease (if renting);
    3. Title/Tax Declaration & SPA/Affidavit of Consent if the location is not owned by the applicant (if not renting); and
    4. Sketch of location.

    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:

    1. Accomplished BIR Form 1906;
    2. Job order from the printer;
    3. Final and clear sample of receipt and invoices (machine printed);
    4. Photocopy of Taxpayer Identification Number Card; and
    5. Photocopy of BIR Form 0605 (payment of registration fee).

    Book of Accounts:

    1. Cash Receipts;
    2. Cash Disbursement;
    3. Ledger;
    4. Journal;
    5. Subsidiary Sales Journal; and
    6. Subsidiary Purchase Journal [the last 2 are additional books for VAT Taxpayer].

    STEP 6: Attend the taxpayer’s initial briefing to be conducted by the RDO concerned for new registrants 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.

    A more comprehensive discussion of 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 on the BIR website (www.bir.gov.ph).

    A final reminder to all new salespersons and 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), whichever comes earlier.”

    I encourage newly accredited salespersons and newly licensed real estate brokers to register with the BIR as soon as possible. To reiterate, the Code of Ethics and Responsibility mandates all RESPs to register with the BIR. Finally, in 2005, Atty. Alexander L. Lacson published his book “12 Little Things Every Filipino Can Do To Help Our Country.”

    “PAY YOUR TAXES” is the 10th Little Thing he listed. I quote some portions of what he wrote in pages 75 – 80, which resonates the same message today as if it was written 19 years ago:

    “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 reasons 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.

    x     x     x

    “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 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 building this kind of nation we dream of for ourselves. Each one of us has a role in it. Each one of us has a responsibility to it.”

    We sincerely hope that all newly accredited real estate salespersons will register themselves at the RDO nearest their place of residence. This is one of the keys to a successful career in the real estate service sector. There are no ifs or buts about this.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • Reminders as 2024 Rolls In

    “Our goal is to set the gold standard when it comes to compliance.”

    – Cathy Engelberg, Commissioner of the WNBA

    By Realttorney®

    Happy New Year. We wish you all the best for the Year of the Dragon. May you all work synergistically with your teams or other REPs to have the most prosperous 2024 possible.

    Photo by fauxels on Pexels.com

    We hope that you have your yearly goals written and these goals broken down into quarterly, monthly, and weekly goals.  Since this is the first working day of 2024, we would like to remind all real estate service professionals (RESPs) of some regulatory compliances according to Republic Act No 9646 and its Implementing Rules and Regulations (IRR).

    First, in Section 38, Rule IV of the IRR “Real estate service practitioners shall be required to indicate the certificate of registration, professional identification card, Privilege Tax Receipt (PTR) number, AIPO membership and/or receipt number.”

    Now, the IRR says ”privilege tax receipt” but in reality, this is called the Professional Tax Receipt or PTR. Yet, despite the “misspelling”, the mandate is clear. All licensed RESPs should get a PTR.

    Here are my previous year’s Professional Tax Receipts as an attorney and real estate broker

    It costs around PhP 300.00 and you can get this at the Office of the Treasurer of your LGU. Just say that you will get a PTR when you stand in front of the transaction window of the Treasurer’s Office. Some LGUs may not have a PTR, but instead have an OTR – the Occupational Tax Receipt – which is the same thing.

    What must you bring with you when you apply for a PTR? For veteran RESPs, a photocopy, digital copy, or the original copy of the PTR of the previous year will suffice. For the new salespersons and brokers, you need to bring a photocopy of your Certificate of Registration and the PRC ID Card with you.

    Second, if you are already registered with the Bureau of Internal Revenue (BIR) then you should pay your annual registration fee of PhP 500.00 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.

    Third, and final reminder, concerns accredited real estate salespersons and licensed real estate brokers who engage in project selling. If it is your cup of tea to sell subdivision and condominium projects then you are mandated by Presidential Decree No. 957 to register with the Department of Human Settlements and Urban Development (DHSUD), according to existing rules and regulations.

    Like securing a PTR, the Certificate of Registration must be renewed annually. You can apply at the Main office of DHSUD in Quezon City or at its Regional Offices nearest your place of residence.

    For licensed real estate brokers wanting to do project selling for the first time or those who are renewing their certificate of registration, kindly prepare for submission the following:

    (1) duly accomplished Application Form – which is specific per region. The application form you can download if you click here is only for Region IV-A [CALABARZON];

    (1) Photocopy of valid PRC-issued Certificate of Registration and PRC-issued Professional Identification Card (Originals thereof to be presented upon filing for comparison as faithful reproduction);

    (2) previous year’s Official Receipt;

    (3) Two recent 2 X 2 ID pictures; and

    (4) Surety/Cash Bond.

    If you are lucky to have been issued an ID Card issued by DHSUD then a copy of it can also be submitted. The registration fee is PhP 720.00 if renewed before expiration.

    Here is my DHSUD Identification Card for the year 2023

    Meanwhile, for newly accredited salespersons or those wanting to renew, you need to submit the following:

    (1) duly accomplished Application Form – which is specific per region. The application form you can download if you click here is only for Region IV-A [CALABARZON];

    (2) Two recent 2 X 2 ID pictures;

    (3) a copy of the PRC-issued accreditation card, or PRC-issued Official Receipt. or the PRC-issued claim stub;

    (4) Cash/Surety bond; and

    (5) the Letter of Engagement/Employment signed by a DHSUD registered Real Estate Broker with these attachments – copies of the PRC ID card of the broker, the DHSUD ID card, and the listing of accredited salespersons from PRC under the broker’s name. The registration fee is PhP 288.00 if renewed before expiration on December 31.

    Here is a sample of the Salesperson’s Letter of Engagement/Employment. Once again, notice that the Letter is region-specific. I secured this since I filed my requirements to the CALABARZON region in Brgy. Halang, Calamba City, Province of Laguna.

    Here is a final note. According to Section 4.7. of PRBRES Resolution No. 11, Series of 2021, “it is only after Mass Oath taking that the RES-Applicant can be considered Accredited and can already practice the real estate brokerage profession and may now register at DHSUD.”

    Let it be known that the Real Estate Salesperson-Applicant can only apply for registration at the DHSUD after attending the oathtaking ceremony – whether in person or online – NOT before. We hope this is clear.

    So kindly perform these regulatory compliances for you to work fully compliant with the requirements of the law that regulates our profession. Failure to comply is a violation of the law and the professional can be subjected to criminal and administrative sanctions.

    Start the year right. As professionals, these are the things we do. It is part of our identity as legal and fully compliant real estate service professionals.

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    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.