Miyerkules, Disyembre 12, 2012

VAT treatment on sale of adjacent real properties


Sale, transfer or disposal within a 12-month period of two or more adjacent residential lots, house and lots or other residential dwellings held primarily for sale to customers or for lease in the ordinary course of trade or business in favor of one buyer from the same seller, shall be presumed a single or one sale of real property, whether covered by one or separate deed/s of conveyance.

The sale shall be subject to value-added tax (VAT) if the aggregate value of the adjacent properties sold exceeds P1,919,500.00 for residential lots and P3,199,200.00 for residential house and lots or other dwellings.

On the other hand, the sale of a parking lot, which may or may not be included in the sale of condominium units, shall be considered a separate and distinct transaction not covered by the rules on residential exemption threshold. Hence, it shall be subject to VAT regardless of the amount of its selling price.

(Revenue Regulations No. 13-2012, October 12, 2012)
Tax Brief – November 2012
Punongbayan and Araullo

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