Here in the Philippines, the ultimate proof of property ownership is a title. We adopted the Torrens Title System, a land registration and land transfer system documenting transfer of ownership of the property, from the original owner who registered it to the succeeding owners.
How to transfer lot title in the Philippines may not be relevant to you if you are not a real estate professional, a property seller or a property buyer. The moment you sell or buy a property, the transfer of title process becomes something that you may want to know about.
In a property purchase process, it should be made clear to all parties involved – seller, listing broker, buyer and buyer’s broker – who should be doing the title transfer. That should have been agreed on from the start.
If you are the buyer, it is in your best interest to know how to transfer land title to new owner, namely: YOU. You may want to do this yourself, on the assumption that you have the time and the patience to go through with it. Alternatively, you can hire the services of a lawyer, a licensed real estate broker or a title transfer company, for a certain service fee. Service fees vary depending on the location of the property.
For your reference and guidance, here are the:
4 Steps on How to Transfer Land Title in the Philippines
Note that we refer to it as a land title transfer procedure but the same goes when transferring title for a condominium.
Now, before the step-by-step guide on how to transfer land titles, we assume that both parties, the seller and the buyer have had a meeting of the minds and have executed a document to effect the conveyance of the property. This deed of conveyance for a sale (for example), referred to as a Deed of Absolute Sale, spells out the details of the subject property, the selling price and the parties involved.
Requirements for Transfer of Land Title
- Deed of Conveyance – whether it is a Deed of Absolute Sale (DOAS), Extrajudical Settlement of Estate with Sale (EJS with Sale), Deed of Donation, etc. Prepare 8 copies.
- For sales transactions, prepare an Acknowledgement Receipt of the amount received by the seller. Or an Official Receipt, if the seller is a real estate dealer or habitually engaged in real estate.
- Make sure the deed indicates the unique Tax Identification Number (TIN) numbers of the parties involved. Important: the spelling of the names on the deed of conveyance, the name on the Bureau of Internal Revenue (BIR) TIN and on the identification documents should be the same; the signature on the deed of conveyance and on the IDs should be the same.
- Both the Deed and the Acknowledgement Receipt must be notarized.
- Why prepare 8 copies? Here’s the distribution breakdown:
- Notary Public
- Seller’s Licensed Real Estate Broker
- Buyer’s Licensed Real Estate Broker
- Copy for submission to the various government agencies (Bureau of Internal Revenue, LGU Treasurer’s Office, Registry of Deeds, LGU Assessor’s Office)
- Copy for the Condominium Corporation or Homeowner’s Association
- Copy as Reserve
Note on Notarization
A notarized document signifies that both parties appeared before a notary public and executed the deed. The act of notarization makes the document a public document.
If one or more than one of the signatories to a deed of conveyance are based abroad, the contract must be Apostilled in the country where the signatory/signatories reside. Or, if the seller/s or buyer/s does not reside in the Philippines or, for some reason, cannot be present for the signing of the contract, the concerned party can appoint an Attorney-in-Fact to sign on their behalf by producing a notarized Special Power of Attorney.
SPAs or Special Power of Attorney
SPAs should have an entire chapter devoted to it but the key things to remember:
- The SPA should clearly state what the Attorney-in-Fact can do: To sell? To lease? To receive the proceeds on behalf of the seller? To deposit the proceeds to the seller’s bank account?
- An SPA is extinguished by the death of the person granting the special power and the death of the attorney-in-fact. This is why the Bureau of Internal Revenue and the Registry of Deeds would often require that you present a “fresh” SPA – preferably under 1 year.
- Some institutions, like banks, have a specific format for the SPAs acceptable to them.
- Photocopies of IDs of all signatories in the deed; all photocopies must have 3 signatures of the owner of the ID; IDs are called “competent evidence of identity” and are defined as a “current identification document issued by an official agency bearing the photograph and signature of the individual”. Examples: Valid Passport, Valid Driver’s License, Valid license cards issued by the Professional Regulations Commission, etc. Important: Do not use expired IDs.
- Official Receipt of the Notary Public for the notarization of the deed.
- Certified True Copy of the Title (Get 3 copies.) You will get this from the Registry of Deeds that has jurisdiction over the property.
- Certified true copy of the latest Tax Declaration. When you request for the certified true copies of the latest Tax Declaration indicate for “BIR Purposes”. Please take note that there are separate tax declarations for the land and for the improvement (ex. house, building). The Tax Declaration is issued by the Assessor’s Office of the city or municipality where the property is located.
- Tax Clearance – Issued by the Office of the Treasurer of the city or municipality. This certifies that the Real Property Taxes for the property, both the land and improvements, have been paid.Requirements to get a Tax Clearance:
- Latest Tax Declaration
- Latest Official Receipts of Real Property Tax payments
- Previous Tax Clearance (if any)
- SPA and valid ID if the requesting party is not the registered owner
- Clearance from the Homeowners Association (HOA) if property, whether lot, house and lot, lot with building, is located inside a subdivision or Management Certificate if property is a condominium unit. Both the HOA Clearance and Management Certificate prove that the seller has settled all HOA/condo dues for the year. The certificate also indicates if the property has been leased. Note: Have this certificate notarized.
- Marriage certificate (for married sellers and buyers)
- Birth certificate (only when applicable). In cases of Deed of Donation proving relationship between donor and donee or Extra-Judicial Settlement to prove relationship between decedent and heirs.
- Certificate of No Marriage (Cenomar) (only when applicable). Needed if seller or buyer is single. Please take note that the Cenomar is valid only for six (6) months from issuance by the Philippine Statistics Authority (PSA)
- For lots-only sale: Certificate of No Improvement. Secure this from the Assessor’s Office of the city or municipality
- 3” x 5” color photos of the property frontage or facade
- Land and House – Photo showing the front outside of the house including the house number.
- Condominium – Photo showing the building with the building name visible. Photo of the unit door with the door number visible.
- Location map – just print a Google Map pertaining to the property.
- Owner’s Duplicate Copy of the Title
- Transfer Certificate of Title (TCT) – for land or house and lot or lot with improvement
- Condominium Certificate of Title (CCT) – for a residential condominium, office condominium or parking unit
- Special Power of Attorney to Process the Title Transfer – if someone else shall process your title transfer. This SPA shall be required by the BIR, LGU Treasurer’s Office, Registry of Deeds, and LGU Assessor’s Office. Important: It should be signed by the seller.
Armed with complete documents, we’re now ready to go!
STEP 1 – Bureau of Internal Revenue (BIR)
STEP 1.A – END RESULT: You will get an official computation of the Capital Gains Tax (or Value-Added Tax, Creditable Withholding Tax – whichever is applicable) and the Documentary Stamp Tax, signed by a BIR Officer in the RDO.
Submit the documents required to the BIR’s Revenue District Office (RDO) that has jurisdiction over the sold property. Note: BIR organized the Revenue District Offices per geographic area. For more information as to which Revenue District Office your property belongs, please visit www.bir.gov.ph.
Documents Required: Items #1 to #11.
Where to Transact: BIR Revenue District Office that has jurisdiction over the property
NOTE: To avoid penalties and surcharges, the Capital Gains Tax / Value-Added Tax should be paid thirty (30) days from notarization date and the Documentary Stamp Tax should be paid on the nearest 5th day of the month following the notarization date. Be very careful of the date when your deed of conveyance will be notarized.
You now have an official computation, go to Step 1.B.
STEP 1.B – END RESULT: Capital Gains Tax or Value-Added Tax and Documentary Stamp Taxes are paid; BIR forms stamped “received” by the Authorized Agent Bank; the stamped BIR returns are proofs of payments
Go to the Authorized Agent Bank and pay for the Capital Gains Tax or Value-Added Tax and Documentary Stamp Tax.
- Signed official computation sheet from the BIR
- Deed of conveyance
- Completely filled-out BIR Form 1706 for the Capital Gains Tax; 3 copies, signed by the seller.
- Completely filled-out BIR Form 2000-OT for the payment of the Documentary Stamp Tax, 3 copies, signed by the buyer
- Cash or Manager’s Check with specific wordings on the Manager’s Check. Important Note: Contact the bank on what should be written on the Manager’s Check.
- Manager’s Check for Capital Gains Tax/VAT/CWT: it’s usually “IFO (in favor of) name of seller, TIN of seller, FAO (for the account of) Bureau of Internal Revenue”
- Manager’s Check for Documentary Stamp Tax: it’s usually “IFO (in favor of) name of buyer, TIN of buyer, FAO (for the account of) Bureau of Internal Revenue
Where to Transact: Authorized Agent Bank (AAB) accredited by the Revenue District Office
Important: Check with the RDO or check with the bank itself. Sometimes, the BIR website listing the Authorized Agent Banks under that RDO is not updated. Avoid a major headache! (1) Make sure the property is under the RDO you are dealing with. (2) Make sure you are paying in an Authorized Agent Bank (AAB) of that specific RDO.
You now have your BIR forms stamped by the bank, go to Step 1.C.
STEP 1.C – END RESULT: Secure the Certificate Authorizing Registration (CAR) from the BIR
Submit all documents listed in Step 1.A and Step 1.B to the BIR RDO. (except item #5 under Step 1.B since you’ve already paid it at the Authorized Agent Bank).
You will receive a time estimate of when the CAR and the documents you submitted will be available for pickup. This used to take about 2 weeks. It should be faster now with the government’s anti-red tape campaign.
Go back to the BIR RDO on the scheduled date. Pay the fee for the certificate. Important: Keep the receipt. This is additional proof that the Certificate Authorizing Registration (CAR) is authentic and valid.
Pickup the CAR, the supporting documents, most specially, the original deed of conveyance stamped “Received by BIR” and signed by an RDO Officer at the back.
The CAR you will receive has 2 copies: one blue color for use for the transfer and one brown as your copy. Important: Safekeep the brown copy of the CAR with your new title and tax declaration once it comes out.
Where to Transact: Bureau of Internal Revenue – Revenue District Office that has jurisdiction over your property.
You now have the CAR, go to STEP 2!
Check out these great deals!
STEP 2 – TREASURER’S OFFICE OF THE LOCAL GOVERNMENT UNIT
Submit documents (#1 to #6) plus the BIR Certificate Authorizing Registration to the Treasurer’s Office of the Local Government Unit.
The Treasurer’s Office computes for the transfer tax. Pay the transfer tax. You can pay in cash or via Manager’s Check. This will take just a few minutes.
TIP: The Transfer Tax is due sixty (60) days from the Notarization Date of the deed of conveyance. What if it’s already 50 days and you still don’t have the CAR from the BIR? You can actually explain this to the Treasurer’s Office and pay for the Transfer Tax ahead of the issuance of the CAR. This saves you from the penalties if you fail to pay the Transfer Tax on time. The Treasurer’s Office will issue an Official Receipt for your Transfer Tax payment but you’ll still need to go back to them once the CAR and the supporting documents are released by the BIR to have the deed of conveyance stamped. Note: The Treasurer’s Office may require you to submit an original (not photocopy) of the notarized deed of conveyance. Aren’t you glad you have an extra copy?
END RESULT: Official Receipt from the LGU’s Treasurer’s Office proving payment of the Transfer Tax and a rubber stamped mark by the Treasurer’s Office at the back of the deed of conveyance; some LGUs also release a tax certificate. You now have one original set of the conveyance document with rubber stamped marks signed by the BIR and the LGU’s Treasurers Office.
Where to Transact: Treasurer’s Office of the LGU where the property is located
STEP 3 – REGISTRY OF DEEDS
Submit documents to the Registry of Deeds. The RD computes for the registration fees. Pay the registration fees. It normally takes about 2 weeks to produce the new title. It should be faster now.
As a result of the Covid-19 pandemic and the consequent lockdowns (ECQ, MECQ, GCQ, etc.), expect delays. For example: the Registry of Deeds of Quezon City would only allow 20-25 transactions (transfers, etc.) daily. People line up as early as 3AM just to get a number!
END RESULT: New title under buyer’s name
- All documents – #1 to #10 plus….
- #14 original Owner’s Copy of the title
- CAR issued by BIR
- OR for the Transfer Tax issued by the Local Government Unit
Where to Transact: Registry of Deeds with jurisdiction over the property
TIP: When you go back to pickup the Owner’s Copy of the title, request for a Certified True Copy of your new title.
STEP 4 – ASSESSOR’S OFFICE
Submit documents to the Assessor’s Office of the Local Government Unit.
END RESULT: Assessor’s Office issues a new tax declaration. New owner pays the assessment fees under the new tax declaration.
- Certified true copy of the new title or Photocopy of New Title but present original Owner’s copy of the new title
- Photocopy of the previous title
- Deed of conveyance
- Certified true copy of latest Tax Declaration (For BIR purposes)
- Transfer Tax Receipt (original and 2 photocopies)
- If previous owner is a corporation: Business Tax Receipt / Business Permit (original and 2 photocopies)
- BIR Certificate Authorizing Registration (Duplicate and photocopy)
- Tax Clearance (original and photocopy)
- Photos of property
- Subdivision plan if land is subdivided
Where to Transact: Assessor’s Office of the Local Government Unit
And you’re done!
- Your New Title
- Your New Tax Declaration
- The brown copy of the BIR CAR
BONUS TIP: If you bought a condominium or subdivision property, don’t forget to inform the HOA/condo corp that you are now the new owner of the property. They will require a Certified True Copy of the Title (your new title), a copy of the new tax declaration and a copy of the deed of conveyance.