Effectivity of Adjusted Threshold Amounts
- New threshold amounts apply to sale instruments executed and notarized on or after January 1, 2012.
- For documents executed between November 1, 2005, and December 31, 2011, old thresholds apply (P1,500,000 and P2,500,000 respectively).
- Thresholds affect VAT applicability on sales:
- Sale of residential lots exceeding P1,919,500; houses and lots exceeding P3,199,200 are subject to 12% output VAT from January 1, 2012.
- Prior to 2012, sales exceeding the lower thresholds were subject to 10% VAT starting November 1, 2005, escalating to 12% starting February 1, 2006.
VAT Exemption Provisions for Real Property Sales
- Sales of residential lots valued at P1,919,500 or below, and houses and other residential dwellings at P3,199,200 or below executed on or after January 1, 2012, are exempt from VAT.
- For sales executed between November 1, 2005, and December 31, 2011, exemption applies to properties within the lower threshold values.
- The thresholds are subject to adjustment every three years according to the CPI.
- Adjustments must be published via revenue regulations no later than March 31 of each adjustment year.
Modification and Repeal of Inconsistent Regulations
- Any prior rules, regulations, or issuances inconsistent with these regulations are hereby modified, amended, or revoked to conform with the updated thresholds and provisions.
Implementation Date
- These regulations took effect on January 1, 2012, as mandated by the Secretary of Finance and Commissioner of Internal Revenue.