Sample Land Title How Land Titles Are Transferred in the Philippines

 

Remember, ownership is not complete until the buyer registers the land title under his or her name

Note: This article is an updated version of the one published last March 11, 2015.

Disclaimer: Although much effort has been made in the creation of this guide, Lamudi Philippines and OMI Land Title Services advise homebuyers to always consult with professionals, such as real estate brokers and lawyers.

 

Most people know that buying a property is not a simple task, but very few appreciate how much more complicated the process of transferring land titles from the seller’s name to the buyer’s name is. The importance of land title transfer should not be underestimated. Remember, this is where you, as a buyer, will start claiming the property as your own. The issuance of a new land title under your name will be your proof of ownership; otherwise, you might be facing technical, legal, and financial problems later on, because of an improper land title transfer or the absence of it.

Where Does It Start?

The process of buying a property does not end with paying the seller and executing a Deed of Sale. What is important for you to remember is that once the Deed of Sale has been signed and notarized, deadlines for tax payments are already in effect. Should you fail to meet these deadlines, the penalties and surcharges that you will incur will certainly make a dent on your pocket. Sometimes, if payment has been delayed for several years, this amount might be even greater than the value of the property at the time it was bought.

Ideally, even before the property is purchased, you should already plan a land title transfer. This is just to make sure that even if you are not be able to do it yourself, you have someone doing it for you whom you can trust. Remember, ownership is not complete until you register the title under your name.

These are the steps for transferring a land title:

1. File and secure the documentary requirements at the Bureau of Internal Revenue Regional District Office (BIR RDO)

1_File and secure the documentary requirements at the BIR RDO

These are the documents you need to have on hand:

  • Original copy of the notarized Deed of Absolute Sale (DAS), plus two photocopies
  • Owner’s duplicate copy of the Transfer Certificate of Title (TCT) or the Condominium Certificate of Title (CCT) in case of sale of condominium units, plus two photocopies
  • Certified True Copies of the latest Tax Declaration for land and improvement of the real property plus two photocopies. If the property sold is a vacant lot or no improvements have been made on it, a Sworn Declaration of No Improvement by at least one of the transferees or Certificate of No Improvement issued by the city or municipal assessor
  • Tax Identification Numbers (TIN) of the Seller and Buyer

In some cases, additional requirements may need to be submitted, including the following:

  • Special Power of Attorney (SPA), if the person signing on the document is not the owner as it appears on the TCT or CCT
  • Certification of the Philippine Consulate if the SPA is executed abroad
  • Location plan or vicinity map if zonal value cannot readily be determined from the documents submitted
  • Such other requirements as may be required by law, rulings, regulations, or other issuances
  • For documents required in case of mortgage, judicial or extra-judicial settlement of estate, judicial and extra-judicial foreclosure of mortgage, consolidation of ownership, execution sale, and condominium project, please refer to Documentary Requirements for the Registration of Real Property with the Register of Deeds

2. Secure assessment of transfer taxes at the BIR and Authorized Agent Bank (AAB) or Municipal or City Treasurer’s Office

2_Secure assessment of transfer taxes at the BIR and Authorized Agent Bank or Municipal or City Treasurer’s Office

After filing your documentary requirements, a BIR representative will calculate your Capital Gains Tax (CGT) and Documentary Stamp Tax (DST), after which they will ask you to sign three copies each of the BIR Form 1706 (CGT) and BIR Form 2000 (DST). These will have to be filed at AAB. For areas where there are no AABs, they will be filed with the Authorized City or Municipal Treasurer.

3. File documents at the BIR for the issuance of Certificate Authorizing Registration (CAR) or BIR Clearance

3_File documents at the BIR for the issuance of Certificate Authorizing Registration or BIR Clearance

You will receive a claim slip with the claim date of the CAR, which will be released along with the following documents:

  • Original copy of the Deed of Absolute Sale stamped as received by the BIR
  • Owner’s Duplicate Copy of the TCT or the CCT
  • Original copies of the BIR Form 1706 (CGT) and Form 2000 (DST) stamped as received by the BIR
  • Copies of the Tax Declaration for land and improvement

According to BIR Memorandum Order No. 15-03, BIR RDOs should release CARs for all One Time Transaction (ONETT) within five days of submitting all documentary requirements.

4. Pay the Transfer Taxes and secure the Tax Clearance at the Local Treasurer’s Office

4_Pay the Transfer Taxes and secure the Tax Clearance at the Local Treasurer’s Office

Aside from paying the Transfer Tax, you also need to produce the following documents for the issuance of the Tax Clearance:

  • Original and one photocopy of the Deed of Absolute Sale
  • Photocopy of the Tax Declaration
  • Official Receipt of Payment of Real Property Tax and Special Education Fund Tax for the current year

5. File documents at the Registry of Deeds for the issuance of new land title

5_File documents at the Registry of Deeds for the issuance of new land title

The new Owner’s Duplicate copy of the TCT and CCT in your name will be released once you have presented all of the following documents:

  • Original Copy of the Deed of Absolute Sale stamped as received by the BIR, plus three photocopies
  • Seller’s Owner’s Duplicate Copy of the TCT or CCT
  • Original Copy of the CAR
  • Original Copy of the Tax Clearance
  • Original Copies of Official Receipts of Payments of CGT, DST, Tax Clearance Certificate, and Transfer Fee
  • Original Copies of the Current Tax Declaration for land and improvement issued by the local assessor’s office
  • If the seller or buyer is a corporation, submit the following requirements: (a) Secretary’s Certificate authorizing the sale of the real property; and (b) Certified True Copy of the Articles of Incorporation and By Laws of the seller or buyer corporation

6. File documents at the Municipal or Provincial Assessor’s Office for the issuance of new Tax Declaration

6_File documents at the Municipal or Provincial Assessor’s Office for the issuance of new Tax Declaration

For the release of the new Tax Declaration, you need to present the following documents:

  • Photocopy of the Deed of Absolute Sale
  • Photocopy of the TCT or the CCT
  • Photocopy of the CAR
  • Photocopy of the Transfer Tax Receipt
  • Photocopy of the latest Tax Receipt or Tax Clearance

Some local assessor’s offices, such as that of Makati City, require these additional documents: (a) Subdivision Plan, if lot is subdivided; and (b) Full-color photos of the house, lot, or condominium unit

It is important to note that the last step is often missed out. Transferring ownership of a Tax Declaration should always be done after Land Title Transfer as the name on the Land Title should coincide with the name indicated on the Tax Declaration.

These steps will require you to go back and forth between multiple government agencies. In addition, the whole procedure could take several months to complete, more so if there are problems with the property’s existing documents or records. The process might also require constant follow-ups with the government agencies, and sometimes it is necessary to personally visit the respective agencies to follow up and speed up the process.

If accomplishing these tasks personally is not possible for you, then it would be wise to look for someone, a duly registered company preferably, who has expertise in this matter. Remember, you must transfer ownership immediately after buying a property to avoid encountering problems later on and paying a huge penalty for late transfer.

OMI Land Title Services assists in solving a wide range of land and property issues, including title transfer, title verification, lost titles, extrajudicial settlement, and unpaid property taxes. Call them at +632 884 1106 to learn more about land title transfers.

 

**Articles from Lamudi Philippines

Daang Hari House and Lot for Sale

The details herein indicated at Daang Hari House and Lot for Sale website are preliminary and subject to change; the developer reserves the right to change, alter and/or improve specifications and details without prior notice. The information in this material is for identification and reference purposes only and does not authorize any person to render any representation or warranty regarding this project.

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