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.
It will take a lot of patience to go through all these procedures. According to Lipana, once you get the ball rolling, you can expect the process to take from 2.5 to 4 months, and that depends on how many buyers are going through the process at the BIR and the Register of Deeds.
“Hopefully, this will be shortened given the [Duterte] Administration’s policy to streamline business processes and documentary requirements at various government agencies to facilitate processing of transactions,” he expressed.
There’s no question that the whole experience is going to be tedious, but there are ways to make it more bearable, starting with having everything in order before starting the procedure.
“Make sure that all the documentary requirements in the checklist are complete before filing the documents with the government agencies to avoid going back and forth. Also, pay the transfer taxes on time to avoid penalties and delay in processing of the documents,” Lipana advised.
Try to have more than the required number of photocopies for each document for emergencies. To minimize hassles, bring several pens for signing documents, as well as a calculator if you want to check the accuracy of payment computations.
Lipana adds the importance of securing official assessments at the BIR to make sure you’re paying the correct taxes, as well as remitting payments at the right venue. Keep in mind that you need to proceed to the government office’s local branch that has jurisdiction over the area where your purchased property is located. The BIR has a revenue district office (RDO) for every city or municipality in the Philippines, while some cities have more than one RDO. Also, Assessors’ Offices are often located in an area’s city or municipal hall.
OMI LAND TITLE SERVICES offers a wide range of land and property issues, including title verification, lost titles, title transfer, extrajudicial settlement, and unpaid property taxes. They have been in the industry for several years now and had served numerous satisfied corporate clients and individual property owners. You may call them at (632) 884-1106 or visit their website at www.omilandtitle.com.
DISCLAIMER: Although much effort has been made in the creation of this guide, MyProperty.ph and OMI Land Title Services advise homebuyers to always consult with professionals.