What's the Zonal Value?

Just for fun: compute the Zonal Value/Tax Base of the house in the image. Other details are provided in the caption. Answers will be provided in another post on Sunday, June 4, 2023, at 6:00 AM.

This is the house in the animated movie, Up.

TITLE

Lot Area: 200sqm

TAX DECLARATION LOT

Area: 200 sqm

Market Value: Php4,000,000

TAX DECLARATION IMPROVEMENT

Area: 100 sqm

Market Value: Php500,000

BIR ZONAL VALUE

RR: 50,000/sqm

CR: 60,000/sqm

QUESTIONS:

1. What is the Tax Base?

2. What tax shall the Seller pay? Capital Gains Tax or Creditable Withholding Tax + VAT?

+++ ANSWERS +++

1. LOT = 200 x 60,000 = 12 Mn

IMPROVEMENT = 500,000

LOT + IMPROVEMENT = 12.5 Mn

Why was 60,000 used instead of 50K? If you check the footnotes of the Zonal Value spreadsheets, they say:

All real properties REGARDLESS OF ACTUAL USE, located in a street, barangay, zone, which are predominantly commercial shall be classified as "Commercial" for purposes of Zonal Valuation.

2. The seller will pay Capital Gains Tax since he didn't earn money from the property (based on the movie).