A step-by-step guide to land title transferring in the Philippines

When buying a piece of property, one of the most crucial steps to complete the process
is the transfer of land title from the previous owner to the buyer. This legal process is
essential as it provides the buyer with a public record declaring him or her as the new
owner of a particular property. By having a new land title that carries your name, you
can protect your investment and avoid any ownership issues that may arise in the
future.
According to OMI Land Title Services General Manager Hardy Lipana, it is advisable for
a buyer to begin the process of transferring the title right after the Deed of Sale has
been executed. “Once the Deed of Sale is executed and notarized, the deadline for the
payment of the transfer taxes will be in effect. There will be corresponding penalties and
interest charges for late payments of transfer taxes,” he said.

To start, you need to have the following requirements 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

Additional requirements (if applicable):

• Special Power of Attorney (SPA), if the person signing on the document is not the
owner as appearing 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
 
Once you have completed your documentary requirements, these are the steps you
need to take.
 
I. At the Bureau of Internal Revenue (BIR)
Present your requirements to a BIR representative, who will compute the Capital Gains
Tax (CGT) and Documentary Stamp Tax (DST). Once the computations have been
done based on the documents you have given, the BIR representative will have you
sign three copies each of BIR Form 1706 for the CGT and BIR Form 2000 for the DST.
Once both BIR Forms 1706 and 2000 have been filled out, the BIR representative will
give you back all your documents and ask you to pay the CGT and DST at the
authorized agent bank (AAB).
 
II. At the Authorized Agent Bank (AAB)
At the AAB, a representative will ask you to fill out two separate AAB payment forms for
the CGT and the DST. Once you have filled out both forms, present them to the AAB
along with your cash payments for both the CGT and DST. Don’t forget to get a copy of
the AAB CGT and DST payment forms back, and make sure they have been stamped
received by the AAB.
 
III. Back at the BIR
Go back to the BIR and return all of your documents, including the original copies of the
two AAB payment forms. The BIR representative will then give you a claim slip
indicating the date when you can claim the Certificate Authorizing Registration (CAR).
The CAR is required by the Register of Deeds for title registration and the issuance of a
new Owner’s Duplicate Original Copy of the TCT or CCT.
As dictated by BIR Memorandum Order No. 15-03, BIR Revenue District Offices are
required to release CARs for all One Time Transaction (ONETT) within 5 days of
submitting all of your documentary requirements.
On the day of the release of the CAR, you will receive said document, along with the
following:

• Original copy of the Deed of Absolute Sale stamped 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 received
by the BIR
• Copies of the Tax Declaration for land and improvement
 
IV. At the Local Treasurer’s Office
Pay the Transfer Fee and to secure a copy of the Tax Clearance, which you will receive
after paying a certain fee for its issuance and once you’ve presented the following
documents:

• 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

V. At the Registry of Deeds

To receive the new Owner’s Duplicate Copy of the TCT or CCT in your name, present
the following documents:

• Original Copy of the Deed of Absolute Sale stamped 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
b. Certified True Copy of the Articles of Incorporation and By Laws of the seller or buyer
corporation
Pay the required Registration Fee. Once the registration fee has been paid and the
documents submitted, a new Owner’s Duplicate Copy of the TCT or CCT will be
released to you within 5 days.
 
VI. At the Local Assessor’s Office
For the issuance of the Tax Declaration in your name, submit 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
b. Full-color photos of the house, lot, or condominium unit
Depending on the workload of Local Assessor’s office, it is possible to receive the Tax
Declaration on the same day as the application, or the following workday.

Applicable Estimated Costs

 Capital Gains Tax: equivalent to 6 percent of the selling price on the Deed of
Sale or the zonal value, whichever is higher
 Withholding Tax: applies only when the seller of the property is a corporation
 Unpaid real estate taxes due: six percent (6%) shall be imposed on each
decedent's total net taxable estate at the time of death
 The commission of the agent or broker (if applicable)
 Documentary Stamp Tax: this is commonly set at 1.5 percent of the selling
price, or its zonal value or fair market value, depending on which is higher
 Transfer Tax (Local Treasurer’s Office): this is tax is imposed on the sale,
barter, or any other mode of transferring of ownership or title of real property,
at the maximum rate of 50 percent of 1 percent (75 percent of 1 percent in the
case of cities and municipalities within Metro Manila) of a property’s worth.
 Transfer Tax (BIR): Transfer taxes may also be owed to the Bureau of
Internal Revenue. According to the BIR, if the property was/is donated, this is
in the form of donor’s tax. If the property was transferred by way of
inheritance, this is in the form of estate tax.
 Registration Fee: commonly set at 0.25 percent of the selling price, or zonal
value or fair market value, depending on which is higher.
 Incidental and miscellaneous expenses incurred during the registration
process, such as notary fees.

The total of the taxes and/or fees will ultimately depend on the overall value of the land
or property being sold. Standard estimated cost of the payment ranges from 3.5% – 5%
of the Contract Price. In other words, for every PhP1,000,000.00, the minimum cost is
P35,000.00.