Redemption period on foreclosure sales

For purposes of reckoning the one-year redemption period on the foreclosed asset of natural persons and the period within which to pay the capital gains tax or creditable withholding tax and documentary stamp tax on the foreclosure of real estate mortgage, the same shall be reckoned from the date of registration of the sale in the office of the Register of Deeds.

As regards the right of redemption of juridical persons in an extrajudicial foreclosure, the right to redeem should be made before the registration of the Certificate of Foreclosure Sale with the applicable Register of Deeds or within three months after foreclosure, whichever is earlier. The three-month period shall be reckoned from the date of the executive judge’s approval of the certificate of sale because it is only then that there is a “sale” to speak of which can be taxed.

(BIR Ruling No. 319-2013, August 16, 2013)

Tax Brief – September 2013

Punongbayan and Araullo