2. What would be the tax implications of buying the property?

The following are the tax implications of buying the property:

1. The disposition of a principal residence shall be exempt from capital gains
tax when the proceeds thereof had been fully utilized to acquire a new
principal residence within eighteen (18) months from the sale or disposition;
2. The Commissioner shall have been duly notified within thirty (30) days by
the taxpayer from the date of sale or disposition;
3. The tax exemption shall only be availed of once every ten (10) years; and
4. If there is no full utilization, the portion of gain shall be subjected to capital
gains tax.

The exemption under the Capital Gains from Sale of Real Property
provides that: “The provisions of paragraph (1) of this Subsection to the contrary
notwithstanding, capital gains presumed to have been realized from the sale or
disposition of their principal residence by natural persons, the proceeds of which
is fully utilized in acquiring or constructing a new principal residence within
eighteen (18) calendar months from the date of sale or disposition, shall be exempt
from the capital gains tax imposed under this Subsection : Provided, That the
historical cost or adjusted basis of the real property sold or disposed shall be
carried over to the new principal residence built or acquired: Provided, further,
That the Commissioner shall have been duly notified by the taxpayer within thirty
(30) days from the date of sale or disposition through a prescribed return of his
intention to avail of the tax exemption herein mentioned: Provided, still further,
That the said tax exemption can only be availed of once every ten (10) years:
Provided, finally, That if there is no full utilization of the proceeds of sale or
disposition, the portion of the gain presumed to have been realized from the sale or
disposition shall be subject to capital gains tax. For this purpose, the gross selling
price or fair market value at the time of sale, whichever is higher, shall be
multiplied by a fraction which the unutilized amount bears to the gross selling
price in order to determine the taxable portion and the tax prescribed under
paragraph (1) of this Subsection shall be imposed thereon.”
 The family home of Bogart and Brenda which they sold in 2012 is considered
as their principal residence. In order that the property sold be exempted from
capital gains tax, the proceeds thereof must have been utilized to buy a new
principal residence within 18 months from the sale or disposition. Bogart and
Brenda sold the property in 2013 amounting to Php 10,000,000.00 and the Php
8,000,000.00 thereof had been used to buy a new principal residence within 18
months from the sale and disposition of the old principal residence.
In this case, the proceeds amounting to Php 8,000,000.00 shall be exempted to
capital gains tax and the unutilized portion amounting to Php 2,000,000.00 shall be
subjected to capital gains tax. Provided, that Bogart and Brenda shall have notified
the Commissioner within thirty (30) days by the taxpayer from the date of sale or
disposition and the tax exemption shall only be availed of once every ten (10)
years, otherwise, the failure to comply with the requirements under the law will
result in the payment of capital gains tax for the purchase of another family home
and Bogart and Brenda must file the capital gains tax return for the sale of the
family home.