Standard Operating Procedures in Transferring and

Acquiring Land Title unto the New Owner

Overview

Real estate is a form of real property which defined as a land, structures, or

improvements that is directly and permanently attached to a land, whether natural
or man-made. It can be used for residential, commercial, or industrial purposes.
However, acquiring a property in the Philippines is a crucial process. It is important
for a buyer to have a thorough knowledge on the process and steps involved in
transferring a property unto the new owner.

Procedures

Before buying a property, it is important to conduct a due diligence for

precautionary measures. It involves examining and investigating the physical and
financial aspect of the property, as well as evaluating the surrounding area. It also
ensures that the transaction will go on smoothly, without troubles ensuing from
third parties, encumbrances, or other factors which will hinder against adherence of
the parties to the contract. The list below is the land due diligence checklist:
A. Property Document
 Land Title – Make sure that the Transfer Certificate of Title / Original
Certificate of Title / Condominium Certificate of Title is authentic. The
easiest way to check if the title is authentic is to obtain an updated
certified true copy from the Registry of Deeds (RD). Then the potential
buyer should look for annotations, encumbrances, covenants, leases,
restrictions, mortgages, notices of lis pendens, prior sales, adverse
claims, and the like which may affect the transfer of property.
 Tax Declaration – Though a tax declaration is not a conclusive proof of
ownership, it may support the claim of ownership of the seller
provided that the tax declaration is under his name. The buyer must
examine the details indicated in the tax declaration including the
owner’s name, land classification, actual use, market value, and
assessed value.
 Real Property Tax Clearance – This document ensures that the seller
has paid all real property taxes related to the property.

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  Lot Plan / Vicinity Map / Land Use Plan – This document will verify
the exact location of the property as well as its boundaries.
B. Source of Right of the Seller
 Deed of Absolute Sale – Verify if the parties are alive and the date and
place of execution of contract.
 Deed of Extrajudicial Settlement – Confirm from local authorities (i.e.,
barangay or municipal officials) if the seller is the only heir of the
deceased registered owner.
 Deed of Donation – Verify if the donor was still alive at the time of
donation.
 Special Power of Attorney (SPA) – SPA does not transfer ownership,
but authorizes the agent to transact with the buyer on behalf of the
seller.
 Authority to Sell - This document proves that the agent of the owner
has an authority to negotiate in terms of land sale.
C. Other Documents
The following documents may also be examined depending on the
seller’s source of ownership: (1) Marriage Certificate, (2) Death Certificate, (3)
Birth Certificate, (4) Shareholder’s Consent, (5) Valid government IDs of all
parties, and (6) validity of authority of the Notary Public.

Once the buyer satisfied the result of the due diligence, then the buyer can
negotiate with the seller in transferring the ownership to the buyer’s name. The
following steps must be taken into consideration prior to acquiring land title in the
Philippines:
1. Prepare the following documents:
 Deed of Absolute Sale (DOAS) or any Deed of Conveyance
 Photocopies of Valid IDs of the signatories in the Deed
 Official Receipt from Notary Public
 Certified True Copy (CTC) of the title
 This will be issued by the Registry of Deeds.
 Certified True Copy (CTC) of the latest Tax Declaration
 The CTC of the Tax Declaration is issued by the Assessor’s
Office of the city of municipality where the property is located.
 The following requirements are: (1) Tax Clearance, (2) Valid ID,
and (3) Authorization Letter if the requesting party is not the
real owner. The cost of the CTC of the Tax Declaration is at least
Php 100.00. However, the requirements and fees may vary in
different LGUs.
 Tax Clearance
 Homeowner Association (HOA) Clearance (for subdivision) or
Certificate of Management (for condominium) – if applicable

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  Marriage Certificate (if the seller or buyer are married)
 Birth Certificate (if applicable especially in situations of Deed of
Donation or EJS)
 Certificate of No Marriage (if applicable)
 Certificate of No Improvement (For Lots-Sale Only)
 Photos of the Property Frontage or Facade
 Location Map
 Owner’s Duplicate Copy of the Title
 Special Power of Attorney (if a third person will handle the paperwork
on behalf of the buyer and/or seller)
2. Submit the documents for necessary tax computation. DOAS must be signed
and notarized, and submit it to BIR for evaluation. Capital Gains Tax (CGT)
and Documentary Stamp Tax (DST) must be paid within 30 days after the
date of notarization. Late payment of CGT and DST shall be subject to penalty
clause.
3. Pay the required taxes (CGT, DST, and VAT) to the BIR-approved
Authorized Agent Bank (AAB). The following documents may also be
required:
 BIR signed ONETT computation sheet
 DOAS
 Accomplished BIR Form 1706 for CGT
 Accomplished Form 2000-OT for DST
4. BIR will issue the Certificate Authorizing Registration (CAR). CAR is a
document which confirms that all the taxes associated with the sold property
have been paid and settled accordingly. In order to obtain the CAR, provide
the following documents which are already stamped by the BIR:
 DOAS – stamped by BIR
 Duplicate Copy of Condominium Certificate of Title (CCT) or Transfer
Certificate of Title (TCT) – received by BIR
 Form 2000-OT and Form 1706 – stamped received by BIR
 Tax Declaration
5. Submit CAR to the Local Treasurer’s Office to pay the Transfer Tax.
Transfer tax should be paid within 60 days after the date of notarization of the
DOAS. Once the transfer tax has been paid and signed by the Treasurer’s
Office, return to BIR in order to stamped the DOAS.
6. Register the following documents to the Registry of Deeds:
 Original Copy of the Owner’s Duplicate Copy of TCT/CCT
 HOA Clearance or Certificate of Management (if applicable)
 DOAS with Photocopies of IDs of all the signatories
 CAR
 CTC of the Latest Tax Declaration
 Tax Clearance
 Transfer Tax Certificate

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 Once the documents are submitted, pay the registration fee and wait for
at least 2-3 weeks before the new title has been released.
7. Obtain the new Tax Declaration from City Assessor’s Office. According to
the new tax statement, the new owner is responsible for paying all the
assessment costs. The following documents are required to be submitted to
the City Assessor:
 TCT of the previous owner
 Business Tax Receipt or Business Permit, if the previous owner is
corporation
 Tax Declaration of the previous owner
 DOAS
 CAR
 TCT of the new owner
 Tax Clearance

Resources

 LRA Circular No. 10-2020

 https://lra.gov.ph/frequently-asked-questions/
 https://www.bir.gov.ph/index.php/rdo-external-service-29.html
 https://www.bir.gov.ph/index.php/10-tax-information/241-capital-gains-
tax.html
 https://www.bir.gov.ph/index.php/tax-information/documentary-stamp-
tax.html

Prepared by

Irah Jane M. Miguel

Real Estate Paralegal

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With My Conformity

Atty. Lapu-Lapu C. Osoteo

Legal Director

Approved by

Kay-Cee Allen Y. Tangalin

Vice Chairman

Carlmark M. Tangalin
Chairman