5 Things you Need to Know About Title Transfer in the Philippines
After you’ve purchased a real estate o property sold such as a condominium unit or house and lot, the next step is to transfer the land title into your name or the name of the group of people who own the property. You must learn about the requirements and plan out the land title transfer steps. This article will walk you through the six things you need to know about transferring a land title in the Philippines.
What is a land title?
A land or certificate of title is a document that confirms a person’s or group’s right to own and claims the property. Aside from that, a land title can help landowners and homebuyers understand existing liens, usage rights, easements, natural resource rights, and other rights.
A land title is frequently confused with a deed, but they are not the same thing. A deed is a legally binding written document in which one person grants or sells land or property to another.
What are the requirements for the transfer of land title?
- Eight notarized Deed of Conveyance, such as:
- Deed of Donation- a legal document that transfers property from the owner to another person through donation.
- Deed of Absolute Sale- a legal document stating that one party is transferring his real estate property to another.
- Extrajudicial Settlement of Estate with Sale- is a legal document and agreement between the heirs of a deceased person that specifies how the deceased’s estate is divided or distributed.
NOTE: Aside from the deed of absolute sale, you can prepare an Acknowledgement Receipt of the amount paid to the seller or an official receipt from the developer for sales transactions.
The buyer and seller’s Tax Identification Numbers should be included in the deed. The spelling on the deed, TIN, and other identification documents should be correct and consistent, as should the signatures on the IDs and deed.
The Notary Public, Seller, Seller’s Licensed Real Estate Broker, Buyer, Buyer’s Licensed Real Estate Broker, Copy for submission to government agencies such as the Bureau of Internal Revenue, LGU Treasurer’s Office, Registry of Deeds, and the LGU’s Assessor’s Office, Copy for the Homeowner’s Association, and Copy as Reserve will all receive copies of these documents.
- Photocopies of the IDs of the person signing the contract (buyer and seller), along with three identical signatures from each buyer and seller, are required. Check that the IDs have photos, signatures, and are not expired, as they will serve as the seller’s and buyer’s current identification documents.
The acceptable Valid IDs in the Philippines are:
- Driver’s license.
- Professional Regulation Commission (PRC) ID.
- Postal ID.
- Voter’s ID.
- Taxpayer Identification Number (TIN).
- Government Service Insurance System (GSIS) e-Card.
- Social Security System (SSS) card.
- The Unified Multi-Purpose ID (UMID).
3. Official Receipt of the Notary Public for the notarization of the deed.4. Three copies of the Certified true copy of the Title from the Registry of Deeds.5. A certified true copy of the most recent Tax Declaration issued by the Assessor’s Office of the municipality in which the property is situated.6. Tax Clearance that certifies that the real property tax payments of the property and its improvements have been settled and there are no unpaid real estate taxes. This clearance is issued by the Office of the Treasurer of the municipality where the property is located.
NOTE: To obtain a Tax Clearance, the following documents must be met:
- Property’s existing documents such as Previous Tax Exemption
- The most recent tax declaration
- Official receipts such as the recent Tax Declaration Official Receipt of Real Estate Tax Payments
- If you are not the registered owner, you must provide a Special Power of Attorney as well as a valid ID.
- Additional documents and certificates such as:
- Marriage Certificate – for married sellers and buyers
- Birth Certificate- to show the relationship between the donor and donee for Deed of Donation and between the deceased person and his heirs for the Extra-Judicial Settlement of Estate.
- Certificate of No Marriage or CENOMAR for single buyer or seller.
- Certificate of No Improvement for lots-only sale issued by the Accessor’s Office of the municipality where the property is located.
- Notarized Homeowners Association Clearance indicating that the property is located in the subdivision, all the fees and dues were settled, if the property is either a lot, house and lot or lot with a building, and if the property was leased.
- 3″x5″ colored photo showing the front outside of the house. Take note that the house number of the property should be visible in the photo.
- Location Map which you can either draw or print using Google Map.
- Duplicate copy of the Transfer Certificate of Title (TCT)
- If someone else will handle the new land title transfer for you, you will need a Special Power of Attorney. BIR, the City Treasurer’s Office, the Assessor’s Office, and the Registry of Deeds all require a Special Power of Attorney signed by both you and the seller.
What is the process to transfer title in the Philippines?
- Provide and submit the documents required by the Revenue District Office (RDO) of the Bureau of Internal Revenue (BIR) in the jurisdiction or location of the property
NOTE: Required documents submitted should be the following:
- An original copy and two photocopies of the notarized Deed of Absolute Sale.
- Photocopy of all signatories on the Deed of Absolute Sale.
- Official Receipt of the Notary Public for the notarization of the Deed of Absolute Sale.
- An Owner’s duplicate copy and two of the Transfer Certificate Title.
- A Certified True Copy and two photocopies of the latest Tax Declaration for land and improvement of the real property or Sworn Declaration of No Improvement for lots with no improvement by the seller or Certificate of No Improvement issued by the municipality’s Assessor’s Office.
- Tax Clearance
- Clearance from the Homeowners Association.
- Certificates such as birth certificate, marriage certificate, and CENOMAR.
- Tax Identification Numbers of both the Seller and Buyer.
- Certificate of No Improvement for lots only.
- Special Power of Attorney if the person processing the transfer is not the owner or buyer of the property. If the Special Power of Attorney is done abroad a Certification of the Philippine Consulate is required.
- Location plan or vicinity map if the zonal value cannot be determined from the available documents
- Obtain an assessment and pay the Capital Gains Tax or Value-Added Tax as well as the Documentary Stamp Tax on your BIR RDO’s Authorized Agent Bank (AAB).
- Submit the documents from steps 1 and 2 to your local BIR RDO to obtain the Certificate Authorizing Registration (CAR).Following the submission of your documents, you will be given an estimated time frame for picking up the two copies of the Certificate Authorizing Registration (a blue copy for the transfer process and a brown copy for your records), the original deed of conveyance stamped as Received by BIR and signed by an RDO Officer, and some supporting documents. Normally, it takes at least two to three weeks to receive the CAR.
- Submit the Deed of Conveyance, Tax Clearance, Certificate of No Improvement for Lots, BIR Certificate Authorizing Registration, and Special Power of Attorney (if the transfer will be handled by someone else) to the Treasurer’s Office of the Local Government Unit where the property is located.The Treasurer’s Office will then compute the Transfer Tax, which you can pay in cash or by Manager’s check. You will then be given an Official Receipt for the payment of Transfer Tax, a rubber-stamped mark from the local Treasurer’s Office on the back of the Deed of Conveyance, and/or a Tax Certificate.
- Submit documents to the Registry of Deeds for registration fee computation. It usually takes at least two to three weeks after payment to present the new title.
- The final step is to submit documentation to the Assessor’s Office of the municipality or city in which the property is located. The Assessor’s Office will then issue a new tax declaration, along with the assessment fee, to the new owner.
Who pays and how much does it cost to transfer land title in the Philippines?
Transferring the land title from the seller to the buyer entails fees that both parties must pay. The following are the most common expenses incurred by both sellers and buyers when transferring a land title:
SELLER is responsible for:
- Real estate taxes owed.
- Capital Gains Tax of 6% of the selling price on the Deed of Sale or the zonal value, whichever is greater.
BUYER is responsible for:
- The registration fee is 0.25 percent of the selling price, or the zonal value, or the fair market value, whichever is greater.
- Transfer tax is 0.5 percent (in the provinces) or 0.75 percent (in Metro Manila) of the selling price, zonal value, or fair market value, whichever is greater.
- Documentary Stamp Tax is 1.5 percent of the selling price, zonal value, or fair market value, whichever is greater.
- Expenses incurred as a result of the registration process.
How long to transfer land title in the Philippines?
After obtaining the transfer tax receipt, it usually takes at least three to four months to transfer the land title from the owner to the buyer. Given that you must visit multiple agencies, including the BIR, Registry of Deeds, Treasurer’s Office, and Assessor’s Office, to transfer the land title document into your name. Going from one agency to another on your own takes time and requires a lot of patience.