RENT TO OWN CONTRACT
This Contract of Lease with Option to Purchase (Rent-to-Own Contract) made and executed this ____of __________ 20___ Manila, Philippines by and between.
__________________________________, Filipino, of legal age, single/married to, with post address at ________________________, hereinafter referred to as the LESSOR/SELLER.
__________________________________, Filipino, of legal age, single/married to, with postal address __________________________, hereinafter referred to as the LESSEE/BUYER.
THAT, for and in consideration of the payment of rent and the faithful compliance by the LESSEE/BUYER of all the stipulations and covenants hereinafter contained, the LESSOR/SELLER has agreed to lease unto the LESSE /BUYER the premises located at _______________________________, City of Manila under the following terms and conditions.
- PURPOSE: That the premises hereby leased shall be used exclusively by the LESSE/BUYER for residential purposes only and shall not be diverted to other uses. It is hereby expressly agreed upon that if at any time the premises are used for other purposes, the LESSOR/SELLER shall have the right to rescind this contract without prejudice to its other rights under the law.
- TERM: The term of this non–renewable lease is for ______________ months from _____________________ to ________________ inclusive.
- RENTAL RATE: The monthly rate for the leased premises shall be in PESOS: ______________________ [_______________], Philippine currency. All rental payments shall be made payable to ______________________.
- DEPOSIT: That the LESSEE/BUYER shall deposit with the LESSOR/SELLER upon signing of this contract and prior to move in an amount equal to ten percent (10%) of the selling price or the sum of PESOS: _____________________________________________________, Philippine currency.
- RENTAL PAYMENT: The LESSE/BUYER shall issue, likewise, upon signing of this contract and prior to move in, Thirty (30) post-dated checks to cover monthly rental for the months of _________________ to __________________, each check dated on the _____ day of each month.
- DEFAULT IN PAYMENT: In case of default by the LESSEE/BUYER in the payment of the rent, such as when the checks are dishonored, the LESSOR/SELLER, at its option may terminate this contract and eject the LESSEE/BUYER as hereinafter provided. However, the LESSE/BUYER is given seven (7) days grace period within which to settle the account from date rental payment is due. Granting an extension to the aforesaid grace period may not be deemed as a waiver of LESSOR/SELLER right to terminate this contract and eject the LESSE/BUYER but in the event the LESSOR/SELLER so opts to grant a written request for extension, a penalty equivalent to three (3%) percent per month of the rental due, with a fraction of a month considered as one month shall be charged and assessed for delayed payments.
- SUB–LEASE: The LESSEE/BUYER shall not directly or indirectly sublet, allow or permit the leased premises to be occupied in whole or in part by any person, form or corporation; neither shall the LESSEE/BUYER assign its rights hereunder to any other person or entity and no right of interest thereto or therein shall be conferred on or vested in anyone by the LESSEE/BUYER without LESSOR/SELLER’s written approval.
- LESSE’S VISITORS, etc…: In case of damage to leased premises attributable to the LESSEE/BUYER, agents and/or visitors, repair of the same shall be for the account of the LESSEE/BUYER without prejudice to LESSOR/SELLER’s availment of any other right under the law.
- POWER, WATER CONSUMPTION & ASSOCIATION DUES: Power, water and association dues shall be for the account of the LESSEE/BUYER.
- OTHER PUBLIC UTILITIES: The LESSEE/BUYER shall pay for its telephone, cable and electrical services and other public services and utilities.
- REPAIR AND MAINTENANCE: The LESSOR/SELLER shall deliver the leased as is where is. The LESSEE/BUYER hereby expressly acknowledges that the leased as is where is. The LESSE/BUYER hereby agrees and binds itself to undertake at its exclusive expense all minor and major repairs as may be required to maintain the leased premises in good state of repair, any provisions of law, present or future, or any stipulation in this agreement to the contrary notwithstanding.
- IMPROVEMENTS, ALTERATIONS AND RENOVATIONS: The LESSEE/BUYER shall not make any improvements, alternations and renovations in the leased premises without prior written consent of both the Association and the LESSOR/SELLER. It is understood that all permanent improvements shall be owned by the LESSOR/SELLER and may not be removed without the express and written consent of the LESSOR/SELLER.
- INJURY OR DAMAGE: The LESSEE/BUYER hereby assumes full responsibility for any damage which may be caused to the person or property of third person/s while remaining either casually or on business in any part of the premises leased. LESSEE/BUYER further binds itself to hold the LESSOR/SELLER harmless and free from any claim for such injury or damage. Provided, however, that the LESSOR/SELLER shall make necessary actions to correct said deficiencies to ensure that premises are in good and tenantable condition.
- DISTURBANCE OF POSSESSION: Disturbance or discontinuance of possession of the LESSEE/BUYER due to “force majeure” shall confer nor right of any kind to the LESSEE/BUYER as against the LESSOR/SELLER, by reason of inconvenience, annoyance or injury to business arising out of the necessity of repairing any portion of the leased premises.
- GOVERNMENT REGULATIONS: The LESSEE/BUYER, shall, at its own expense and risks, comply with all the laws, ordinances, regulations and orders of any agency of the government, national or local, affection or pertaining to the leased premises and to any effects or articles which said LESSEE/BUYER may have in its possession therein.
- ABANDONMENT OF PREMISES: Should the LESSEE/BUYER abandon the leased premises for a period of THIRTY (30) DAYS or vacate the premises before expiration of this Contract of Lease without notifying the LESSOR/SELLER and check payment for the current month is dishonored, the LESSOR/SELLER’S may immediately re-enter the leased premises and this lease shall thereon be automatically terminated.
- BREACH OF CONDITIONS: In case of breach by the LESSEE/BUYER of any of the conditions and covenants of this lease as herein stipulated, the LESSOR/SELLER at its option, may forthwith terminate and cancel this lease and the LESSEE/BUYER shall be liable for any and all damages as a result of such default and termination. Forfeiture of whatever rental desists and advances shall apply in case the LESSEE/BUYER violates any of the provisions in the contract. Forfeiture shall likewise apply should the LESSEE/BUYER fails to exercise his option to purchase after the expiration of this contract.
- NON-WAIVER OF LESSOR’S RIGHT: Failure of the LESSOR/SELLER to enforce strict performance by the LESSEE/BUYER of any of the terms, conditions and covenants of this agreement shall not be construed as waiver of any right or remedy that the LESSOR/SELLER’S may have, nor shall it be deemed as a waiver of any subsequent breach of the terms, conditions, and covenants contained therein. No waiver by the LESSOR/SELLER of its rights hereunder shall be deemed to have been made unless expressed in writing and signed by the LESSOR/SELLER.
- EXPIRATION OR CANCELLATION OF LEASE: At the expiration of the term of this lease or cancellation thereof, as herein provided, the LESSEE/BUYER will promptly deliver to the LESSOR/SELLER the leased premises with all corresponding keys and in as good and tenantable condition as the same is now, ordinary wear and tear excepted, devoid of all occupants, movable furniture, articles and effects of any kind. Non-compliance with the terms of this clause by the LESSEE/BUYER will give the LESSOR/SELLER the right, at latter’s option, to refuse to accept the delivery of the premises and to compel the LESSEE/BUYER to pay therefrom at the same rate as herein provided plus an additional sum equal to Twenty Five (25%) percent thereof as penalty until the LESSEE/BUYER shall have complied with terms hereof. The same penalty shall, likewise, be imposed in case the LESSEE/BUYER shall refuse to leave the leased premises after the expiration of this Contract of Lease or the termination for any reason whatsoever.
- OPTION TO PURCHASE: For good & valuable consideration, the receipt whereof is hereby acknowledge from the LESSEE/BUYER. The LESSOR/SELLER hereby extends an option to the LESSEE/BUYER to purchase for the amount of PESOS: ___________________________________________ [P __________________] of Lease on the 18th month or the period from 1st to _____ of __________, _______. The LESSEE/BUYER, at his/her/its exclusive option, conditioned on faithful compliance with all payments and undertakings contained herein, may convey his/her/its decision to avail of option to purchase in writing to the LESSOR/SELLER who thereafter shall credit all rental payments up to the __________ (___) month and the initial deposit stated above to down payment.
- BALANCE AFTER THIS LEASE AGREEMENT: If LESSEE/BUYER complied with all terms and conditions stated above, inclusive of payment of realty taxes, power, water and association dues, the outstanding balance of the LESSEE/BUYER shall be 70% of the Total Selling Price amount equivalent to PESOS: _____________________________________ [P_____________], Philippine currency. The LESSEE/BUYER hereby agrees to execute the Deed of Absolute Sale upon payment in full of the TOTAL PURCHASE PRICE. Failure of the LESSEE/BUYER to exercise his/its right to purchase within the period of 30 months from the execution of this contract shall mean forfeiture and abandonment of his right to purchase. In such case, all payment made during the term of this lease are considered rentals.
- TRANSFER EXPENSES: Documentary stamp tax, capital gain tax, registration fees, transfer tax, and other necessary expenses connected with the execution and registration of the sale shall be for the account of and paid by the LESSEE/BUYER.
- TAXES, UTILITIES AND OTHER ASSOCIATION IMPOSITIONS: For the duration of this lease, LESSEE/BUYER shall pay the Realty Taxes. However, should the LESSEE/BUYER not exercise the option to purchase, LESSOR/SELLER shall reimburse the LESSEE/BUYER of all the taxes, exclusive of penalties for delayed payments, if any, it had paid as well as the start-up fund of the Homeowners Association.
- JUDICIAL RELIEF AND PENALTY: Should any one of the parties herein be compelled to seek judicial relief against the other, the losing parties shall pay an amount equivalent to One Hundred Percent (100%) of the amount claimed in the compliant as attorney’s fees which shall in no case be less than P 100,000.00 pesos in addition to other cost and damages which the said party may be entitled to under the law, to recover from the other party. Provisions of penal character in this Contract of Lease shall be considered as cumulative to the relief granted by this section.
- RIGHTS AND INTERESTS: The rights and interests of the LESSOR/SELLER subject under this instrument shall be fully assignable by the LESSOR/SELLER subject only to previous written notice thereof to the LESSEE/BUYER.
- FORFEITURE OF DEPOSIT: Forfeiture of whatever rental deposit and advances shall apply to any of the following:
a. When the LESSEE/BUYER is in default in payment for three (3) months. In such a case, the LESSOR/SELLER shall have the right to prohibit entry of the LESSEE/BUYER, visitors, guests and his employees in the premises and the right to padlock the leased premises until indebted is satisfied;
b. When LESSEE/BUYER pre-terminates lease with or without cause;
c. When LESSEE/BUYER violates any of the provisions of this contract; and
d. When the LESSEE/BUYER fails to exercise his/her option to purchase.
- PENAL PROVISION: The parties agree that all covenant and agreements herein contained shall be deemed conditions as well as covenants that if default or breach be made of any such covenants and conditions, then this lease may be terminated and cancelled and the party in breach shall be liable for any and all damages, actual and consequential, resulting from such breach or termination; provided however, that no default shall be declared under this lease unless the party in default has given written notice to cure such default within thirty (30) days. In the event of violation of this contract, other than the non-payment of rentals, the party in breach must immediately take remedial steps to cure the breach not later than thirty (30) days.
- RIGHT OF ENTRY: LESSOR/SELLER or its authorized agent/s shall, after giving due notice to the LESSEE/BUYER, have the right to enter the premises in the presence of the LESSEE/BUYER or its representative at any reasonable hour to examine the same or to make repairs therein or for the operation of regular maintenance of the building or for any other lawful purpose which it may deem necessary.
This RENT TO OWN CONTRACT (CONTRACT OF LEASE WITH OPTION TO PURCHASE) shall be valid and binding, between the parties, their successors-in-interest and assigns. No amendment of the terms of the instrument shall be effective unless in writing and signed by the parties therein.
IN WITNESS WHEROF, parties herein have affixed their signatures on the date and place first above written.
SIGNED IN THE PRESENCE OF:
Republic of the Philippines)
BEFORE ME, a Notary Public, this _____ day of ____________, 20___ personally appeared the following to witness:
NAME CTC No. DATE ISSUED PLACE ISSUED
------------------------------- --------------- --------------------- ---------------------
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Known to me to be the same persons who have executed the foregoing, instrument and acknowledged to me that the same is of their own free will and voluntary act and deed as well as of the corporation herein represented.
This instrument consisting of ______ (__) pages, including the page on which this acknowledgement is written, has been signed on the left margin of each page and every page thereof by the parties and their instrumental witnesses and sealed with my notarial seal.
IN WITNESS WHEREOF, I have hereunto set my hand, the day, year and place above written.
Doc. No. ______:
Page No. ______:
Book No. ______:
Series No 20___.
Effective January 1, 1998 up to Present
If the Net Estate is:
Over But not Over The Tax
Shall be Plus Of the Excess Over
P 200,00.00 Exempt
P200,000.00 500,000.00 0 5% P 200,000.00
500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
2,000,000.00 5,000,000.00 135,000.00 11% 2,000,000.00
5,000,000.00 10,000,000.00 465,000.00 15% 5,000,000.00
10,000,000.00 1,215,000.00 20% 10,000,000.00
Effective After July 28, 1992 up to December 31, 1997
If the Net Estate is:
Over But not Over The Tax
Shall be Plus Of the Excess Over
P 200,00.00 0%
P200,000.00 500,000.00 5% P 200,000.00
500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
2,000,000.00 5,000,000.00 135,000.00 12% 2,000,000.00
5,000,000.00 10,000,000.00 495,000.00 21% 5,000,000.00
10,000,000.00 1,545,000.00 35% 10,000,000.00
Effective Before July 28, 1992
If the Net Estate is:
Over But not Over The Tax
Shall be Plus Of the Excess Over
P 10,00.00 Exempt
P 10,000.00 50,000.00 3% P 10,000.00
50,000.00 75,000.00 P 1,200.00 4% 50,000.00
750,000.00 100,000.00 2,200.00 5% 75,000.00
100,000.00 150,000.00 3,450.00 10% 100,000.00
150,000.00 200,000.00 8,450.00 15% 150,000.00
200,000.00 300,000.00 15,950.00 20% 200,000.00
300,000.00 400,000.00 35,950.00 25% 300,000.00
400,000.00 500,000.00 60,950.00 30% 400,000.00
500,000.00 625,000.00 90,950.00 35% 500,000.00
625,000.00 750,000.00 134,700.00 40% 625,000.00
750,000.00 875,000.00 184,700.00 45% 750,000.00
875,000.00 1,000,000.00 240,950.00 50% 875,000.00
1,000,000.00 2,000,000.00 303,450.00 53% 1,000,000.00
2,000,000.00 3,000,000.00 833,450.00 56% 2,000,000.00
3,000,000.00 1,393,450.00 60% 3,000,000.00
Effective September 15, 1950 to December 31, 1972
Estate and Inheritance Tax:
From To ESTATE INHERITANCE
5,000.00 0 5,000.00 Exempt Exempt
7,000.00 5,000.00 12,000.00 1.0% 2&
18,000.00 12,000.00 30,000.00 2.0% 4%
20,000.00 30,000.00 50,000.00 2.5% 6%
30,000.00 50,000.00 70,000.00 3.0% 8%
BIR Form 1801 - Estate Tax Return
Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary.
BIR Form 1801 - Estate Tax Return
1. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds P3,000 for deaths occurring prior to January 1, 1998
2. Certified true copy of the Death Certificate
3. Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially
4. Court Orders/Decision, if the estate is settled judicially;
5. Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate
6. A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if applicable
7. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real property(ies) (front and back pages), if applicable
8. Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable
9. "Certificate of No Improvement" issued by the Assessor's Office declared properties have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees
10. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable
11. Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable
12. Photo copy of certificate of stocks, if applicable
13. Proof of valuation of shares of stocks at the time of death, if applicable
For listed stocks - newspaper clippings or certification from the Stock Exchange
For unlisted stocks - latest audited Financial Statement of issuing corporation with computation of book value per share
14. Proof of valuation of other types of personal property, if applicable
15. Proof of claimed tax credit, if applicable
16. CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos, if applicable
17. Certification of Barangay Captain for claimed Family Home
18. Duly notarized Promissory Note for "Claims against the Estate" arising from Contract of Loan
19. Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent
20. Proof of the claimed "Property Previously Taxed"
21. Proof of claimed "Transfer for Public Use"
22. Copy of Tax Debit Memo used as payment, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
The Estate Tax Return (BIR Form 1801) shall be filed and payment be made with an Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of residence of the decedent at the time of his/her death.
If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having jurisdiction over the place of residence of the decedent.
If the required filer has no legal residence in the Philippines, the Estate Tax return shall be filed and paid with:
(a) The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon City; or
(b) The Philippine Embassy or Consulate in the country where decedent is residing at the time of his/her death.
File the return within six (6) months from decedent's death. However, the Commissioner may, in meritorious cases, grant extension not exceeding thirty (30) days.
The Estate Tax imposed shall be paid at the time the return is filed by the executor or administrator or the heirs. However, when the Commissioner finds that payment on the due date of the Estate Tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts or two (2) years in case the estate is settled extra-judicially.
Extension of Time of Filing:
When the Commissioner finds that the payment of the estate tax or of any part thereof would imposed undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case it settled extra-judicially.
Where the request for extension is by reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the taxpayer, no extension will be granted by the Commissioner.
If an extension is granted, the Commissioner or his duly authorized representative may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount, not exceeding double the amount of tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance in the terms of extension.
The request for extension shall be filed with the Revenue District Officer (RDO) where the estate is required to secure its TIN and file the estate tax return. The application shall be approved by the Commissioner or his duly authorized representative.
Related Revenue Issuances
RR No. 2-2003, RMO No. 26-82, RMO No. 31-82, RMC No. 1-98,
Sec. 84 to Sec. 97 of the National Internal Revenue Code
Frequently Asked Questions
1. Who are required to file the Estate Tax return?
a) The executor or administrator or any of the legal heirs of the decedent or non-resident of the Philippines under any of the following situation:
- In all cases of transfer subject to Estate Tax;
- Where though exempt from Estate Tax, the gross value of the estate exceeds two hundred thousand P 200,000.00; and
- Where regardless of the gross value, the estate consists of registered or registrable property such as real property, motor vehicle, share of stocks or other similar property for which a clearance from the Bureau of Internal Revenue (BIR) is required as a condition precedent for the transfer of ownership thereof in the name of the transferee.
b) Where there is no executor or administrator appointed, qualified and acting within the Philippines, then any person in actual or constructive possession of any property of the decedent must file the return.
c) The Estate Tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the distributive share in the inheritance to any heir or beneficiary. Where there are two or more executors or administrators, all of them are severally liable for the payment of the tax. The estate tax clearance issued by the Commissioner or the Revenue District Officer (RDO) having jurisdiction over the estate, will serve as the authority to distribute the remaining/distributable properties/share in the inheritance to the heir or beneficiary.
d) The executor or administrator of an estate has the primary obligation to pay the estate tax but the heir or beneficiary has subsidiary liability for the payment of that portion of the estate which his distributive share bears to the value of the total net estate. The extent of his liability, however, shall in no case exceed the value of his share in the inheritance.
2. What are the procedures in the filing of the Estate Tax Return and payment of the corresponding taxes?
a) The Estate Tax Return (BIR Form 1801) shall be filed and payment made with an Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of residence of the decedent at the time of his/her death.
b) If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having jurisdiction over the place of residence of the decedent.
c) If the required filer has no legal residence in the Philippines, the Estate Tax return will be filed and payment be made with:
- The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon City; or
- The Philippine Embassy or Consulate in the country where decedent is residing at the time of his/her death.
d) Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the decedent.
e) Payment of Estate tax by installment -In case the available cash of the estate is not sufficient to pay its total estate tax liability, the estate may be allowed to pay the tax by installment and a clearance shall be released only with respect to the property, the corresponding/computed tax on which has been paid.
3. What are included in gross estate?
For resident alien decedents/citizens:
a) Real or immovable property, wherever located
b) Tangible personal property, wherever located
c) Intangible personal property, wherever located
For non-resident decedent/non-citizens:
a) Real or immovable property located in the Philippines
b) Tangible personal property located in the Philippines
c) Intangible personal property - with a situs in the Philippines such as:
- Franchise which must be exercised in the Philippines
- Shares, obligations or bonds issued by corporations organized or constituted in the Philippines
- Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located in the Philippines
- Shares, obligations or bonds issued by a foreign corporation if such shares, obligations or bonds have acquired a business situs in the Philippines ( i. e. they are used in the furtherance of its business in the Philippines)
- Shares, rights in any partnership, business or industry established in the Philippines
4. What are excluded from gross estate?
GSIS proceeds/ benefits
Accruals from SSS
Proceeds of life insurance where the beneficiary is irrevocably appointed
Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life)
War damage payments
Transfer by way of bona fide sales
Transfer of property to the National Government or to any of its political subdivisions
Separate property of the surviving spouse
Merger of usufruct in the owner of the naked title
Properties held in trust by the decedent
Acquisition and/or transfer expressly declared as not taxable
5. What will be used as basis in the valuation of property?
The properties subject to Estate Tax shall be appraised based on its fair market value at the time of the decedent's death.
The appraised value of the real estate shall be whichever is higher of the fair market value, as determined by the Commissioner (zonal value) or the fair market value, as shown in the schedule of values fixed by the Provincial or City Assessor.
If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration.
If there is an improvement, the value of improvement is the construction cost per building permit or the fair market value per latest tax declaration.
6. What are the allowable deductions for Estate Tax purposes?
For Resident Decedent
Expenses, losses, indebtedness and taxes
a) Funeral Expenses
i) CA 466 - 5 % of gross estate (up to Dec. 31, 1972)
ii) PD 69 - 5 % of gross estate but not exceeding P 50,000 (Jan. 1, 1973 to July 27, 1992)
iii) RA 7499 - 5 % of gross estate but not exceeding P 100,000 (July 28, 1992 to December 3l, 1997)
iv) RA 8424 - 5% of gross estate but not exceeding P 200,000 (Jan. 1,1998)
b) Judicial expenses of the testamentary/intestate proceedings
c) Valid claims against the estate
d) Claims against insolvent person
e) Unpaid mortgages/indebtedness
f) Unpaid taxes
g) Casualty losses
h) Property previously taxed or vanishing deductions
Present decedent must have died within five (5) years from date of death of prior decedent or date of gift
The property with respect to which the deduction is claimed must have formed part of the gross estate situated in the Philippines of the prior decedent or taxable gift of the donor
You have to register the sale of the house and lot that you purchased with the Register of Deeds of the Philippines in order to cause the transfer of the title to the property from the seller to you as its new owner. Your title as the new registered owner of the property is evidenced by Owner’s Duplicate Transfer Certificate of Title (Owner’s Duplicate Condominium Certificate of Title in case of condominium units) which will be issued to you bearing your name by the Register of Deeds.
The purpose of said title registration is to provide public record of the title itself upon which a prospective purchaser or someone else interested may rely.
BATAS PAMBANSA BLG. 185 AN ACT TO IMPLEMENT SECTION FIFTEEN OF ARTICLE XIV OF THE CONSTITUTION AND FOR OTHER PURPOSES Section 1. In Implementation of Section fifteen of Article XIV of the Constitution, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of a private land, for use by him as his residence, subject to the provisions of this Act.
Section 2. Any natural-born citizen of the Philippines who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of one thousand square meters, in the case of urban land, or one hectare in the case of rural land, to be used by him as his residence. In the case of married couples, one of them may avail of the privilege herein granted; Provided, That if both shall avail of the same, the total area acquired shall not exceed the maximum herein fixed. In case the transferee already owns urban or rural lands for residential purposes, he shall still be entitled to be a transferee of additional urban or rural lands for residential purposes which, when added to those already owned by him, shall not exceed the maximum areas herein authorized.
Section 3. A transferee under this Act may acquire not more than two lots which should be situated in different municipalities or cities anywhere in the Philippines; Provided, That the total area thereof shall not exceed one thousand square meters in the case of urban lands or one hectare in the case of rural lands for use by him as urban land shall be disqualified from acquiring rural land, and vice versa.
Section 4. As used in this Act -
A natural-born citizen is one who is a citizen of the Philippines from birth without having to perform any act to acquire or perfect his Philippine citizenship.
Urban areas shall include:
In their entirety, all municipal jurisdictions which whether designated as chartered cities, provincial capitals or not, have a population density of at least 1,000 persons per square kilometer;
Poblaciones or central districts of municipalities and cities which have a population density of at least 500 persons per square kilometer;
Poblaciones or central districts (not included in 1 and 2) regardless of population size which have the following:
Street pattern, i.e., network of streets in either at parallel or right angle orientation;
At least six establishments (commercial, manufacturing, recreational and/or personal services); and
At least three of the following:
A town hall, church or chapel with religious services at least once a month;
A public plaza, park or cemetery;
A market place or building where trading activities are carried on at least once a week; and
A public building like a school, hospital, puericulture and health center or library.
Barangays having at least 1,000 inhabitants which meet the conditions set forth in sub-paragraph (3) of paragraph
above, and in which the occupation of the inhabitants is predominantly other than farming or fishing.
All other areas of the Philippines which do not meet the conditions in the preceding definition of urban areas shall be considered as rural areas.
Section 5. Transfer as a mode of acquisition of private land under this Act refers to either voluntary or involuntary sale, devise or donation. Involuntary sales shall include sales on tax delinquency, foreclosures and executions of judgment.
Section 6. In addition to the requirements provided for in other laws for the registration of titles to lands, no private land shall be transferred under this Act, unless the transferee shall submit to the register of deeds of the province or city where the property is located a sworn statement showing the date and place of his birth; the names and addresses of his parents, of his spouse and children, if any; the area, location and the mode of acquisition of his land-holdings in the Philippines, if any; his intention to reside permanently in the Philippines; the date he lost his Philippine citizenship and the country of which he is presently a citizen; and such other information as may be required Section 8 of this Act.
Section 7. The transferee shall not use the lands acquired under this Act for any purpose other than for his residence. Violations of this Section, any misinterpretation in the sworn statement required under Section 6 hereof, any acquired within two years from the acquisition thereof, except when such failure is Code and deportation in appropriate cases, be penalized by forfeiture of such lands and their improvements to the National Government. For this purpose the Solicitor General or his representative shall institute escheat proceedings. Any transferee liable under this Section shall moreover be forever barred from further availing of the privilege granted under this Act.
Section 8. The Minister of Justice shall issue such rules and regulations as may be necessary to carry out the provisions of this Act. Such rules and regulations shall take effect fifteen days following its publication in a newspaper of general circulation in the Philippines.
Section 9. If any part of this Act shall be declared unconstitutional, the remaining provisions not thereby affected shall remain in full force and effect.
Section 10. This Act shall take effect upon its approval.
Approved, March 16, 1982
REPUBLIC ACT NO. 7042 (AS AMENDED BY RA 8179)
FOREIGN INVESTMENTS ACT OF 1991
SECTION 1. Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land to be used by him for business or other purposes.
SECTION 2. In the case where both spouses are qualified under the law, one of them may avail of the said privilege: However, if both shall avail of the privilege, the total area acquired shall not exceed the maximum allowed.
SECTION 3. In the case the transferee already owns urban or rural land for business or other purposes, he shall still be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned by him shall not exceed the maximum areas allowed.
SECTION 4. A transferee under this Act may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines: Provided, That the total land area thereof shall not exceed five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land for use by him for business or other purposes. A transferee who has already acquired urban land shall be disqualified from acquiring rural land and vice versa. However, if the trasnferee has disposed of his urban land, he may still acquire rural land and vice versa, provided that the same shall be used for business or other purposes.
SECTION 5. Land acquired under this Act shall be primarily, directly and actually used by the transferee in the performance or conduct of his business or commercial activities in the broad areas of agriculture, industry and services, including the lease of land, but excluding the buying and selling thereof. A transferee shall use his land to engage in activities that are not included in the Negative List or in those areas wherein investment rights have been granted to him under this Act.
SECTION 6. Registration of Land. The Register of Deeds in the province or city where the land is located shall register the land in the name of the transferee that it will be used for any purposes mentioned in Section 5 above, i.e. certification of business registration issued by the BTRCP/Department of Trade and Industry and affidavit that the land shall be used for business purposes.The provision of BP 185 (An Act to Implement Section 15 of Article XIV of the Constitution and for Other Purposes Pertaining to the Ownership of Private Lands for Residential Purposes by Former Natural Born Filipinos) and its implementing Rules and Regulations shall be adopted, where applicable, in the implementation of this Act through a Circular to be issued by the Land Registration Authority.The Register of Deeds shall ensure that the limits prescribed by law are observed.
(Section 10. RA 7042 as amended by RA 8179. Approved, March 28, 1996)