08 November 2011

Higher VAT exemptions on real property sale


 Here’s good news to businessmen engaged in the sale of real estate and lease of residential properties.
The Bureau of Internal Revenue (BIR) adjusted upwards over the weekend the threshold amounts for the sale of residential lots and houses and the leasing of dwelling units which are exempted from the payment of value-added tax (VAT).
In revenue Regulations No. 16- 2011 signed by Revenue Commissioner Kim S. Jacinto-Henares, lot sellers are exempted from paying the VAT if the value of the property is not more than P1,919,500 and P3,199,200 if there is a house in the said property.
Previously, the VAT threshold for a lot and lot with house were placed at P1.5 million and P2.5 million, respectively.
On the other hand, a lessor is also exempted from paying the VAT if the total rental payment per unit is P12,800 annually from the previous P10,000.
If he has a number of units but his yearly income does not exceed P1.9 million no VAT payment is required. The previous threshold was at P1.5 million.
In increasing the VAT exemption threshold, the BIR made use of the current values using the consumer price index of the National Statistic Office.
The BIR is mandated under the law to make the necessary adjustments every three years.

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