BIR Ruling

June 2, 1976 Mr. Sixto Martinez Division Office Butuan City School Butuan City S i r : This refers to your letter dated April 30, 1976 requesting information as to whether or not you will be considered a real estate dealer and hence required to pay a real estate dealer tax for leasing your vacant lot to other person. In reply, I have the honor to inform you that if you receive an amount of four thousand pesos or more a year as rental of your land, then you are considered a real estate dealer as defined under Section 194(A) of the Tax Code, to quote: "...any person shall be considered as engaged in business as a real estate dealer by the mere fact that he is the owner or sub-lessor of property rented or offered to rent for an aggregate amount of four thousand pesos or more a year." Accordingly, you are required to pay the initial amount of P150.00 as real estate dealer's fixed tax imposed under Section 182(A)(3)(aa) of the Tax Code before offering to lease said lot, and for subsequent years the rate shall depend upon the total amount of rental derived during the preceding calendar year as follows: a. P150.00, if the annual income from buying, selling, exchanging, leasing or renting property (whether on their own accounts as principals or owners of rental property or properties) is over four thousand pesos but not exceeding ten thousand pesos; b. P300.00, if the annual income exceeds ten thousand pesos but does not exceed thirty thousand pesos; c. P500.00 if the annual income exceeds thirty thousand pesos but does not exceed fifty thousand pesos; and d. P1,000.00, if the annual income exceeds fifty thousand pesos. However, if you expect to receive less than four thousand pesos (P4,000.00) a year rental for said land, you are exempt from the payment of the real estate dealers tax imposed under Section 182(A)(3)(aa) of the Tax Code, as amended. cdta Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."