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What are the Real Estate and Rental Property Tax Deductibles?

santilm00 · 14 · 2823

santilm00

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Hi guys, i need your insights. I have a 3 door 2 story town house, i rent-out the 2-doors but my problem is that our expenses for real estate taxes and payment for business renewal eats around 13% of my yearly gross. My apartment is already five years, did i miss deductibles something like building depreciation etc..? and what are their requirements? Seems to me like my taxes are going up each year. Maraming Salamat Po.


the_minion

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I think pwede mo nang ideduct ng depreciation yan para makabawas rin ng tax.
Let's also wait for other PMTers who have a deeper understanding on that matter

Off T
Paano niyo po hinahati yung electricity between sa tenants niyo? I mean malalaman mo ba sa metro kung sino ang pinakamagastos sa kuryente? or divided equally


santilm00

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I think pwede mo nang ideduct ng depreciation yan para makabawas rin ng tax.
Let's also wait for other PMTers who have a deeper understanding on that matter

Off T
Paano niyo po hinahati yung electricity between sa tenants niyo? I mean malalaman mo ba sa metro kung sino ang pinakamagastos sa kuryente? or divided equally

I should start deducting tax deductibles now, but i don't know where to start. With regards to electricity etc., they have their own metro, were responsible only for maintenance and repair sa bahay.


ZiadSerghei

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It depends on your overall income.


proudtobepinoy

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wait, bit off topic do we really need to register as a business and secure a business permit when you want to rent out your property?
Say I am renting my condo or property to a friend or to somebody, do I really need to pay taxes other than property tax?
Also am I required to declare this as income?
« Last Edit: Feb 12, 2014, 05:47 PM by proudtobepinoy »


wilch23

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wait, bit off topic do we really need to register as a business and secure a business permit when you want to rent out your property?
Say I am renting my condo or property to a friend or to somebody, do I really need to pay taxes other than property tax?
Also am I required to declare this as income?

If you want to be legal, you need to register (DTI or SEC, City Hall, BIR) so you can have BIR Official Receipt. Then you have to pay either 3% percentage tax or 12% VAT monthly (depends on the rental rate and income). Then there is also annual income tax, business permit, barangay clearance, locational clearance, fire protection, etc

A lot of people who rent out residential properties don't do this. But if your tenant is a business or professional, they may ask for OR.


wilch23

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Hi guys, i need your insights. I have a 3 door 2 story town house, i rent-out the 2-doors but my problem is that our expenses for real estate taxes and payment for business renewal eats around 13% of my yearly gross.

So your rental business is registered as a single proprietor? If so, you can claim 40% (OSD in BIR ITR form) of annual gross revenue as your annual expense without need of CPA.

My apartment is already five years, did i miss deductibles something like building depreciation etc..? and what are their requirements?

If you use depreciation as an expense, you can also claim repairs, etc as expenses. This way, you are using itemized deductible expenses. I think BIR is now requiring a certified CPA document if you go this route for your annual ITR filing.

Seems to me like my taxes are going up each year.

That is true and you can't stop it. What you can do is increase the rent.

Maraming Salamat Po.

Welcome


proudtobepinoy

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If you want to be legal, you need to register (DTI or SEC, City Hall, BIR) so you can have BIR Official Receipt. Then you have to pay either 3% percentage tax or 12% VAT monthly (depends on the rental rate and income). Then there is also annual income tax, business permit, barangay clearance, locational clearance, fire protection, etc

A lot of people who rent out residential properties don't do this. But if your tenant is a business or professional, they may ask for OR.

I see so it's about whether making it official or not,
I think it's like an online buy and sell business? I mean some online businesses register in the BIR/SEC and some don't and also don't pay tax.
« Last Edit: Feb 13, 2014, 11:00 AM by proudtobepinoy »


gogoypmt

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Anu at magkano yung BIR Threshold para sa mga Rental Properties na pang Individual lang.. lalo na pang bahay upa lang. Gusto ko lang naman malaman kung ang renta na below 10k ay kailangan bang iregister or magbayad ng tax etc.


wilch23

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Legally, Basta may rental income, you have to issue OR, which means you need to register with BIR, city hall, etc. Monthly Percentage Tax (3%) of monthly rental income HAS to be paid regardless of your monthly rental income. Kung zero ka (vacant ang unit) you need have to file monthly % tax but nothing to pay.

Kung may income tax na babayaran, that depends on your annual taxable income. Pero filing of annual ITR is still a requirement. If have are also an employee, this rental income becomes your other source of income in the consolidated ITR.


gogoypmt

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Salamat sa info.


proudtobepinoy

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Legally, Basta may rental income, you have to issue OR, which means you need to register with BIR, city hall, etc. Monthly Percentage Tax (3%) of monthly rental income HAS to be paid regardless of your monthly rental income. Kung zero ka (vacant ang unit) you need have to file monthly % tax but nothing to pay.

Kung may income tax na babayaran, that depends on your annual taxable income. Pero filing of annual ITR is still a requirement. If have are also an employee, this rental income becomes your other source of income in the consolidated ITR.
yeah thanks for the info


santilm00

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Hi guys, i need your insights. I have a 3 door 2 story town house, i rent-out the 2-doors but my problem is that our expenses for real estate taxes and payment for business renewal eats around 13% of my yearly gross.

So your rental business is registered as a single proprietor? If so, you can claim 40% (OSD in BIR ITR form) of annual gross revenue as your annual expense without need of CPA.

My apartment is already five years, did i miss deductibles something like building depreciation etc..? and what are their requirements?

If you use depreciation as an expense, you can also claim repairs, etc as expenses. This way, you are using itemized deductible expenses. I think BIR is now requiring a certified CPA document if you go this route for your annual ITR filing.

Seems to me like my taxes are going up each year.

That is true and you can't stop it. What you can do is increase the rent.

Maraming Salamat Po.

Welcome

Do i need the original receipt ng mga repair bills ko?
Thanks, increase rent is the easiest way i think.
« Last Edit: May 12, 2014, 08:32 PM by santilm00 »


wilch23

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You can use any kind of receipts as expenses but the BIR only recognize ORs registered and approved by it. So kung may audit yari ka, minimum bayaran mo kulang, pwede with interest and penalties. Worst case is tax case with possible imprisonment (pero never pa yata nangyari i think).


 


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