THE TRUSTY 'OL "TAGA-LAKAD"

Once upon a time, a broker once celebrated the smooth closing of a condo sale. Title transfer was the only thing left, so they passed the baton to their long-trusted “taga-lakad” (TL)—someone they’d worked with many times, someone they believed would never fail them.

But then came the call.

The TL reviewed the documents and confidently declared:

“Mali ang form. Don’t use 1706. Dapat 1606. Sole proprietor kasi si Seller.”

The broker froze.

Wrong form? Impossible.

But the TL insisted—firm, certain, unwavering.

And that was the end of the call.

Why this is a horror story

Because following the TL’s “expert” advice would have led the Seller straight into a P40,000,000 tax nightmare—and that amount applied only to this one property.

Here’s why:

BIR Form 1706 = for Capital Gains Tax, used when selling Capital Assets (like personal real estate not used in business).

BIR Form 1606 = for Creditable Withholding Tax, used when selling Ordinary Assets—the kind used by real estate dealers, developers, or anyone engaged in the real estate business.

If the broker had filed 1606, the act itself would have effectively reclassified the Seller into someone “engaged in real estate business”—simply because the tax form chosen matches that status.

The problem?

The Seller was a sole proprietor… but registered for a completely different business, not real estate. Zero connection.

One wrong form = one accidental declaration = tens of millions of unintended taxes.

That’s why this tale is chilling.

So now the question is:

Was the TL’s advice:

An innocent misunderstanding?

(Possible, but the error is so fundamental it raises eyebrows.)

or

A deliberate trap?

(A cynical but real possibility in this industry.)

Either way, this story is a reminder:

Trusted doesn’t always mean correct.

And in real estate, even one checkbox can destroy someone financially.