QuestionsQuestions (CIRCULAR NO. 406)
It provides standard and uniform policies for determining (a) retention fees for developer-assisted housing loan accounts and (b) transfer/registration fees for retail housing loan accounts.
Yes. It covers retention fees for developer-assisted housing loan accounts and transfer/registration fees for retail housing loan accounts.
It depends on the housing loan amount bracket and is computed using the applicable rates for the Bureau of Internal Revenue (BIR), Registry of Deeds (RD), and Local Government Unit (LGU).
BIR: 3.5%; RD: 3.0%; LGU: 1.0%. Total: 7.5%.
BIR: 5.0%; RD: 1.5%; LGU: 1.0%. Total: 10.0%.
BIR: 8.0%; RD: 1.0%; LGU: 1.0%. (Total stated: 2.0% appears inconsistent with the table formatting; students should verify the intended total rate for this bracket.)
Since PHP 400,000 is up to PHP 500,000, the total rate is 7.5%.
Because PHP 1,500,000 falls within over PHP 500,000 to PHP 2,000,000, the total rate is 10.0%.
For the bracket over PHP 2,000,000 to PHP 6,000,000: BIR: 8.0%; RD: 1.0%; LGU: 1.0%.
Yes. If the developer is exempted from tax, no retention fee shall be deducted from the housing loan takeout proceeds up to the extent of the said exemption, provided proof of a Certificate of Tax Exemption is furnished.
The developer must furnish proof of a Certificate of Tax Exemption issued by the BIR Commissioner (as stated in the Circular).
It applies only up to the extent of the tax exemption; Pag-IBIG shall not deduct retention fees up to that exempted amount, not necessarily for the entire fee.
It repeals Section II.1 of Pag-IBIG Fund Circular No. 388, as well as the cited items under Circular Nos. 298 and 259 (items related to conversion of CTS to REM and related provisions).
They continue to be in full force and effect, as stated in Circular No. 406.
After fifteen (15) calendar days following completion of its publication in the Official Gazette or in a newspaper of general circulation.
Students should multiply the applicable total percentage rate (or sum the component rates, where consistent) by the loan amount to get the total retention/transfer-registration fee, then apply any tax-exemption rule if the developer is tax-exempt and has provided the required BIR Certificate of Tax Exemption.