Did you know that it is a legal requirement for every resident and non-resident to apply for a property tax withholding clearance certificate? If ever your name doesn’t appear in the list of registered owners, you may apply for a withholding certificate. This document simply states your compliance with BIR’s directive on real estate taxation and serves as proof that you’re already compliant with the law.
If ever there will be any doubt about your compliance you’ll get notified by the Bureau of Internal Revenue (BIR) through its official letter asking for payment of taxes and/or updating status within 30 days from the date of receipt or face penalties such as fines and surcharges.
Keep in mind that you’re also obliged to declare your property’s fair-market value, the current year and all taxable income. You must be aware of this especially if you own more than one property because it will be taxed accordingly.
What Is Property Tax Withholding?
As mandated by law, withholding is a process that requires an owner to remit real estate tax payment quarterly through his/her bank account instead of paying it personally at BIR regional offices or directly at its main office in Quezon City.
A certificate will then be issued for every remittance made with BIR as proof that taxes have been paid. In contrast to self-assessment where owners are required to pay the full amount due before applying for a tax waiver, under withholding an owner can still pay the tax without applying for a clearance certificate.
What Are The Benefits Of Applying For a Property Tax Withholding Clearance Certificate?
Aside from proving that you’ve paid your dues to BIR, there are also other benefits in having this document although no monetary refund will be given to you. If ever your property is sold or transferred, withholding certificates will serve as proof of compliance with BIR. It’s the same thing if the ownership of the property changes hands while upon application for transfer of withholding certificate, it’s considered voluntary acceptance by the new owner.
You may avail yourself even of an instalment payment plan if it has already been offered by your bank plus zero interest rate on late payments for three months.
Who Can Apply For Property Tax Withholding Certificate?
Non-resident and resident withholding certificates can be applied by:
1. Individual/joint applicant(s) whose name appears as the registered owner on BIR certification or TOR. However, if the property is under a corporation, all officers must sign the application form.
2. In the case of multiple owners, at least one person with the authority to represent the others should apply for it. There are two options here – co-registered owner who acts as a representative or authorized representative from the management office of condominium corporations/subdivisions.
3. If ever names appear in TOR but not in BIR certification, they must attach a copy of TOR and request for correction through a special power of attorney before applying for a withholding certificate.
What Are The Documents Required?
Following documents must be submitted when applying for a withholding certificate:
1. Signed Special Power of Attorney (SPA) in favour of representative or request by management office/ association for correction of TOR and BIR certification;
2. Four (4) original copies of the duly-accomplished application form;
3. Payment voucher covering tax due;
4. Latest BIR Form No. 2307 (if there’s any), TOR, Certificate Authorizing Registration (CAR) with attached photocopy of Torrens title, latest mortgage contract and TCT; and,
5. If the property is registered under a corporation, submit amended BIR Form 1701 showing the actual number and percentage shareholdings of the individual stockholders.
How Long Will It Take To Get The Certificate?
A withholding certificate may be released anytime within 30 days upon receipt of all requirements submitted by the applicant. If it’s not, BIR will send you formal notice to explain why your application is still under review or why they haven’t received complete requirements yet.
What Is The Fee For Property Tax Withholding Clearance Certificate (PWTC)?
For individuals who want either non-residential or resident withholding certificates, the fee will only be P200 for each type through cash payment at the local Revenue District Office (RDO) that has jurisdiction over your property. However, if you don’t fall under these categories but need PWTC anyway (e.g. you’re applying for transfer or correction of TOR) it will cost you P450 per type.
Contact company 123 to help you get such a clearance certificate.