Among the four factors used by the Pag-ibig Fund to compute the amount of housing loan that its members may avail of is their monthly net disposable income.
Net disposable income is what’s left of your salary after deducting taxes, mandatory contributions to Pag-ibig and Social Security System (SSS) for the private sector or Government Service Insurance System (GSIS) for the public sector, and loan or other payments (if applicable).
Since Pag-ibig decides on the lowest amount of loan that a member may take out based on either contribution, actual need, loan-to-collateral ratio, or capacity to pay (based on the net disposable income), it is the latter factor that is usually used as basis for most housing loan computations.
The table below is a listing of net incomes and their equivalent housing loan amounts pegged on the loan terms or the number of repayment years.
(For loans over 750,000 pesos, see the rest of the Pag-ibig income table.)
If you’ve made that big decision to buy a house, chances are you’re also already choosing from the many possible financing options available to you because, let’s face it, only a few people can afford to pay cash for big purchases like property acquisitions.
One alternative that private sector employees should consider when acquiring a house and lot is to take out a housing loan from the Home Development Mutual Fund (HDMF), more popularly known as Pag-ibig Fund.
Republic Act 7742 has made membership in the fund mandatory for private sector employees earning 4,000 pesos and above. If you’ve been contributing religiously to the fund for at least two years, you probably quality for that loan.
Pag-ibig Fund allows borrowing of up to 2 million pesos to fund any of the following:
* purchase of a fully developed lot in a residential area
* purchase of a lot and construction of a house on it
* purchase of a house and lot, townhouse, or condo unit
* construction of a house on a lot owned by the member
Jose Reyes, who works in a call center in Cebu City, has been transferred to his company’s main branch in Manila. He wants to move for good and sold his house and lot in a subdivision in Lapu-Lapu City for 2.5 million pesos.
How much is he required to pay in taxes to government for the sale?
The computation of his tax due depends on whether his property is a capital asset or an ordinary asset.
Capital assets refer to properties that are not used in connection with trade, business, or as an income source by the owner.
An example of a capital asset would be a residential house and lot “actually” used as residence by the owner.
On the other hand, properties used in trade or business or as a source of income by the owners are considered ordinary assets.
The applicable tax in the sale of capital assets is the capital gains tax. The tax rate is 6 percent of either the “price per deed of sale” or “zonal value” in case of land.
Government, in deciding which of the price or the zonal value (fixed by the local government unit) to use as basis in the computation of taxes, always goes for the higher amount.
Posted in Computations, Terms, Tips
Tagged capital-gains, cebu, cebu-city, creditable-withholding, documentary-stamps-tax, DST, fair-market-value, real-estate-tax, transfer-tax, zonal-value
If you’ve owned real estate for some years now, chances are you already know what you need to pay government on a yearly basis.
Those still thinking of acquiring a house and lot or commercial and industrial land, be warned that aside from the one-time tax due on the sale, mortgage, or exchange of real property, there is also the regular yearly taxation–basic and special education fund–that you need to settle religiously.
The first of these yearly levies on properties is called the basic real estate tax. The other is the special education fund tax.
How does government determine how much basic tax owners should pay for their properties?
Central to this determination is what is called the fair market value (FMV) of a property.