Transfer Certificate of Land Title in the Philippines – Process, Requirements and Tips
The rules governing property ownership in the Philippines is handled by the Land Registration Authority (LRA), and is primarily based on the Torrens System of Land Registration. A Registry of Deeds (RD) is assigned to keep records of every land title in a city or municipality, they keep the original copy of registered land titles; while an “Owner’s Duplicate Certificate” is given to the current property owner.
In this article, we’ll give you a step-by-step procedure on how to get a certificate of land title for a property that was already registered. This procedure is otherwise known as transfer certificate of land title, where the land or property purchased is already registered at the RD by the seller, and he or she is transferring the title to you- the buyer.
Requirements:
- Notarized Deed of Absolute Sale and photocopies thereof
- Latest tax declaration of the property
- Certificate Authorizing Registration (CAR) and 3 photocopies thereof
- Seller’s Certificate Authorizing Registration- This is what the seller got from the BIR after paying the capital gains tax and doc stamp tax
- Receipt from BIR confirming payment of Capital Gains Tax, Documentary Stamp Tax
- Receipt from Assessor’s office for the payment of Transfer Tax
1. The owner and buyer agree on the sale of property and which of them pays the taxes included in the process. A lawyer creates a duly notarized Deed of Absolute Sale (DOAS), which is a document proving the legal transfer of the property’s ownership. After that, the Deed of Sale should be taken to the RD for the transfer of title to be recorded. This is important for the buyer’s protection.
How much is the notarization fee?
Sam: The usual rate is 1% of the selling price but it really depends on the notary public. I have observed that the 1% is the average, but it is still negotiable.
Whose lawyer will create the DOAS? Should it be the buyer or seller’s lawyer? What if they don’t have a lawyer to represent them?
Sam: Either would be okay, as long as both parties would carefully read and agree to the contents of the DOAS. If either party has no lawyer, it would be best if they get the services of one to check the DOAS before they sign it.
Why is it important for the buyer to go to the Register of Deeds this early in the process?
Sam: This is important because it would be best to verify the following by getting a certified true copy of the title: if the title is authentic, if the seller is really the owner, if the technical description is sound and complete, if the title is indeed clean, etc. The buyer is basically verifying if the seller is saying the truth, at the very start, to avoid wasted time.
2. Go to the Assessor’s office of the municipality or city where the property is based, then request for a certified true copy of the latest Tax Declaration on the property. This is needed for the BIR to assess the taxes to be paid like CGT or CWT, whichever is applicable, depending on whether the property is a capital or ordinary assets, DST, and for the issuance of the certificate Authorizing Registration or CAR
How long does this process take?
Sam: For most cities and municipalities, you can get this on the same day. For big cities like Quezon City, you will have to come back after a day to claim the certified true copy of the tax declaration.
Are there any requirements to get this form?
Sam: You just need to know the name of the owner(s) of the property, or the TCT/CCT number, or tax declaration number. I often just bring a photocopy of the tax declaration from the seller
3. Go to the Regional District Office (RDO) of the Bureau of Internal Revenue (BIR) that handles the property’s location. Fill out the applicable forms and pay the Capital Gains Tax (CGT), which is 6% of the selling price (SP) or the zonal value of the property, whichever is higher; and Documentary Stamp Tax, which is 1.5% of the (SP) on the DOAS or zonal value; whichever is higher. As practiced in the Philippine real estate market, the buyer usually pays for Documentary Stamp Tax and all other transfer costs, while the seller pays for the Capital Gains Tax or CWT, whichever is applicable. However, this is not true for all cases because the seller and buyer can create a different agreement as to who pays the taxes, as long as both parties agree in writing before the DOAS is notarized.
When should these taxes be paid?
Sam: For CGT, the deadline is on the 30th day after the execution of the DOAS, for DST, it is on the 5th day of the month after the execution of the DOAS. Transfer Tax is due 60 days after the execution of the DOAS.
Are there penalties if the taxes are not paid on time?
Sam: Yes, a surcharge equal to 25% of the tax due is charged for late payments, plus 20% interest per year on any unpaid taxes, plus compromise penalty (if any, this depends on the BIR officer).
4. File a request for Certificate Authorizing Registration (CAR) at the BIR. This document is a certification proving that the transfer of property has been approved by the BIR and that the taxes due on the said property have already been paid. Hence, this document gives the RD the go signal to transfer the title to the seller’s name.
How long does it take to get the CAR?
Sam: After submission of all requirements, it would take at least 2 weeks, based on my own experience for properties in Antipolo and Quezon City.
Why is it necessary to have two photocopies of this certificate?
Sam: The buyer will need this if and when they decide to sell the property later on and transfer it to their buyer. The BIR will look for this when the buyer applies for the next CAR.
5. Go back to the Assessor’s office and pay the transfer taxes.
How much is the transfer tax?
Sam: This ranges from 0.25% to 0.75% (rate depends on the city/municipality where the property is located) of the selling price or zonal value, whichever is higher.
Are there any documents needed to pay this tax?
Sam: Yes of course- Certificate Authorizing Registration from the Bureau of Internal Revenue; Realty tax clearance from the Treasurer’s Office; and the Official receipt of the Bureau of Internal Revenue (for documentary stamp tax). Please refer to the article, “What is Transfer Tax” at foreclosurephilippines.com for more information.
6. Finally, go back to the Registry of Deeds and show the official receipts of the paid taxes from the BIR and Assessor’s office, and the Certificate Authorizing Registration. Pay the registration fee, which is based on graduated rates set by the LRA based on SP (ex. For a property with a selling price of 1 Million pesos, the registration fee is Php5,546).
How long does this process take?
Sam: Just recently, I submitted all requirements for the registration of the transfer of a title in QC last February 4, 2013, and was informed the new title will be ready for pickup on March 21, 2013, that’s 45 days just for the registration of the title and the release of a new one!
Any tips or pointers for people who will request for a transfer of certificate of title?
Sam: Just make sure all the required documents are complete and pay all taxes related to the transaction early to have time to correct and problems/deficiencies, don’t do it on the day of the deadline.
Is it easy to do this process on your own or would it be better to hire a broker/title company?
Sam: If you are patient enough to travel through traffic to go to the BIR, cityb hall, etc, then it would be okay to do this on your own.
How to determine if the Title Presented by the Seller is Authentic
Ask the seller for a copy of the certificate of title, then go to the Registry of Deeds and ask for a certified copy of the property’s title. The copy usually costs 100 pesos (2.5 USD), but that depends on the municipality or city where the property is located. Sometimes, it can take a few days to get this.
- Once you have the copy, check that all details on the certified copy and seller’s title are identical. Everything has to be identical, down to the last letter. If there are discrepancies, you should ask the seller to verify this.
- Check if the property has any liens, existing mortgage, property ownership claims, or restrictions.
Q&A and More tips from Sam…
What if the property is in a subdivision or gated community, is it okay if it has a lien?
Sam: It’s okay as long as the owner fully disclosed this and explains how it can be remedied. Better consult a lawyer that specializes in real estate or a knowledgeable real estate broker
- If a seller refuses to give you a copy of the title, walk away
- If several months have passed since you got a certified true copy of a title, make sure you get a new certified true copy before closing a deal, just to be sure there are no surprises.
- Always get a traceback to ensure the mother title has no problems.
