6

Buy/sell six properties in a calendar year, and you're automatically considered someone engaged in RE businesses.

After which, the sale of all your properties–even personal ones–will be subjected to VAT and income tax.

The BIR would classify any person who has had at least SIX real estate transactions in the preceding year as "habitually engaged" and, therefore, tag that taxpayer as a real estate developer.

The law is vague and does not identify whether this pertains to a sell or buy transaction.

The law also doesn't elaborate on how they "count" a transaction. Is it based on the number of titles? Or is it based on the number of deeds of absolute sale someone executes?

For example, if someone bought three adjacent lots from the same seller and executed one deed for all three properties, does that count as 1 or 3 transactions?

These are where the law is vague. It's safe to assume that the BIR will be counting both buying and selling transactions as well as the number of titles.

RE investors should consider this in their exit strategy unless they want problems later on.