How to Register a Newly Bought Property in the Philippines

posted in Business, Philippines, Real Estate by Memorazon

It is very common for an OFW to buy a new property in the Philippines after a few years of earning a better
income from abroad.
We didnt immediately realized that it is easier to find a property that you wants to own than to get it registered
in your name after paying a large sum of money as it does not ends there. Most of us are not familiar with the
whole process of registering a property to the name of the new Owner. Here are a few steps that may help
you:
STEP 1 -DEED OF ABSOLUTE SALE
Anyone between the Seller and Buyer (or their Lawyers, if any) may prepare the Deed of Sale as long as it has
been executed before and Notarized by a Notary Public.
NOTES:
a.) If you are a Buyer, let me remind you that before giving all the money to the Seller be sure that you got from
him some important documents that you would need in the registration of the property under your name such
as a copy of his validID, a recent CTC and TIN or a copy of TIN Car original copy of all Real Property Tax
Receipts in his possession.
b.) If the Seller is a Corporation, you would need from them a notarized secretarys certificates containing the
resolution of their board of directors approving the sale and a certificate from the Securities and Exchange
Commission (SEC) stating that its articles of incorporation have been registered with the SEC.
STEP 2 CITY ASSESSORS OFFICE (Located in the City Hall or Municipal Hall)
Secure the following:
a.) Certified True Copy of Tax Declaration (House and Lot)
b.) Certificate of No Improvement (If property is vacant lot)
c.) Two Original Copies 1 for BIR and 1 for Registry of Deeds
STEP 3 LAND TAX DIVISION OF CITY TREASURERS OFFICE (Located in the City Hall or Municipal
Hall)
Secure the following:
a.) Tax Clearance
Note: In order to obtain a Tax Clearance, the Seller must pay first all arrears on Property Tax (if any and must
be updated as of document of sale). Therefore, it is important that you got hold of the original of the official
receipts evidencing payment by seller of realty taxes of the current and preceding years, before you gave him
the full payment of the sale.
We had an experience that the Seller was able to gave us the Property Tax Receipt of the current year
however, upon application of Tax Clearance it was discovered that the previous five years was not paid!
STEP 4 BUREAU OF INTERNAL REVENUE
Submit the following:
Tax identification number (TIN) of seller and buyer;
Notarized deed of absolute sale/document of transfer, but only photocopied document shall be retained
by the BIR;
Certified true copy of the latest tax declaration issued by the City Assessors Office for the land and
improvement applicable to the taxable transaction;
Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original
Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT);
Sworn declaration of with Improvement by at least one (1) of the transferees, or certificate of with
Improvement issued by the City Assessors Office.
You (and/or the Seller, depends on the agreement) have to pay the following:
a.) Capital Gains Tax (6% for individual seller) or Witholding Tax (7.5% if seller is a corporation) it is the
Sellers responsibility to pay the Capital Gains Tax (CGT) or Witholding Tax unless the Buyer agrees otherwise
b.) Documentary Stamps Tax (1.5% of the selling price or zonal value or fair market value, which ever is
higher) Payment for DST is responsibility of the Buyer
You shall received the following:
The Certificate Authorizing Registration
The Original copy of the Deed of Absolute Sale stamped received by the BIR
Original Copies of the BIR Return Forms 1706 (CGT) and 2000 (DST) stamped received by the BIR
Important Notes:
i.) Capital Gains Tax and Documentary Tax shall be computed based on Selling Price (per Deed of Sale), or
Market Value of Tax Declaration, or BIR Zonal Value, whichever is higher.

ii.) If the Buyer agrees to pay the Capital Gains Tax, it very important that you get the Sellers Tax Identification
Number (TIN) and a copy of his ID
iii.) Forms for payment of Capital Gains Tax can be secured from the BIR or may be downloaded from the BIR
website http://www.bir.gov.ph
iv.) Payment for Capital Gains Tax and Documentary Stamps can only be paid at the BIR Regional Office or
BIR authorized banks where the property is located. It can be paid either in cash or managers check.
v.) Capital Gains Tax shall be filed and paid to the BIR within thirty days from the date of sale, otherwise there
will be interest and penalty.
vi.) Documentary Stamps Tax shall be paid on or before the 5th day of succeeding month from the date of
sale.
STEP 5 MUNICIPAL TREASURERS OFFICE (Located in the City Hall or Municipal Hall)
Pay the following:
a.) Transfer Tax is computed as 1/2 of 1% (0.5%) of the Selling Price or Zonal Value or Fair Market Value of
Tax Declaration, whichever is higher. Payment of Transfer Tax is responsibility of the Buyer
NOTES:
i.) The transfer tax must be paid at the CTO not later than 60 days from the date of execution of the Deed of
Absolute Sale or the notarization date thereof, whichever is earlier.
ii.) Prepare the following requirements:
Certificate Authorizing Registration from the Bureau of Internal Revenue
Tax clearance certificate from the Treasurers Office
Official receipt of the Bureau of Internal Revenue (for documentary stamp tax)
Photocopy of Deed of Sale
Photocopy of Transfer Certificate of Title (TCT)
Photocopy of Tax Declaration
STEP 5 REGISTRY OF DEEDS (Located in the City Hall or Municipal Hall)
Pay the following:
a.) Registration Fee 0.25% of the selling price, or zonal value or fair market value, which ever is higher.
Payment of Registration Fee is responsibility of the Buyer
Apply for registration and submit the following documents:
Copy of deed of absolute sale;
Official receipt evidencing payment of transfer tax;
Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST
and CGT;
Real property tax clearance from the City Treasurers Office;
Original copy of owners duplicate of TCT (in the name of the seller);
Original or certified true copy of the latest tax declaration;
If Seller is a corporation, include the following:
Notarized secretarys certificate containing resolution of the board of directors of the seller approving
the sale;
Notarized secretarys certificate containing resolution of the board of directors of the buyer approving
the sale;
Articles of incorporation of the buyer and by-laws; and
Certificate from the SEC that the articles of incorporation of the buyer have been registered.
NOTE:
A new Certificate of Title under the New Owners Name will be issued by Registry of Deeds. Be sure to double
check the spelling of names and other information in the new TCT before receiving the new TCT.
STEP 6 MUNICIPAL ASSESSORS OFFICE (Located in the City Hall or Municipal Hall)
Secure the following:
a.) New Tax Declaration
NOTES:
i.) Prepare the following requirements:
Photocopy of notarized deed of sale
Copy of latest tax declaration (in the name of seller)
Tax clearance certificate of real property taxes from the CTO
Certificate authorizing registration from the BIR
Photocopy of official receipt of transfer tax payment (original copy to be presented)
The transfer certificate of title (TCT) issued by the RD (in the name of the buyer)

Philippine Real Estate Purchase Checklist

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Buying real estate in the Philippines. A list of key things to check before you buy. You have to be very careful
when making real estate investments in the Philippines. The market for Philippine real estate is quite illiquid.
Once you have bought your property, you may have a hard time selling it. Here are a few suggestions for
doing your Philippine real estate due diligence.
1.

FORECLOSED PROPERTY. There are many complicated legal issues involved in buying foreclosed
property. If the foreclosure was not handled properly you may lose the property and have no recourse to the
seller. If you decided to buy foreclosed property, make sure you have a trusted, experienced attorney.
2.
TITLE. Make sure the seller is the owner of the property as shown on the title. Ask for ID. Its not
unknown for persons who dont have full (or any) ownership to try to sell real estate. Get the seller to give
you a copy of the title, a copy of the survey plan, and a copy of the latest tax declaration. Take the copy to
the Register of Deeds and ask to see the master copy and make sure both agree. Make sure that the copy
the the seller gives you has the same annotations on the back as the one at the register of deed. Verify that
title is clean meaning the property is not mortgaged (no liens & encumbrances on the property). You can
see that at the back of the title with the heading Encumbrances. This page must be empty if you are told
that the title is clean. But sometimes the space for the technical description of the property on the front
page of the title is not enough and the description of the property is continued on the Encumbrances page,
this is of course all right.
3.
TAX ASSESSOR. Check with the tax assessor to see if the tax files agree with the Registrar of Deeds
files. A property title with home or any permanent building improvement will have a counterpart pair of tax
declarations, one for the land and the other for the improvement. Bring the photocopy of tax declaration to
the Municipal Assessor (if property located in municipality) or City Assessor (if property located in city) and
request a Certified True Copy of Tax Declaration. If the property is currently or long past mortgaged or
encumbered, one will see that stamped in the Certified True Copy of Tax Declaration. If the property is
clean, meaning not mortgaged or encumbered, compare the photocopy with the Certified True Copy of Tax
Declaration. If the entries are not the same, ask the Assessor the reason for the discrepancy.
4.
TAX MAP OFFICE. Bring Certified True Copy of Title to the Tax Mapping Office. This is the office where
archives of lot plans and vicinity maps of properties located in a province. Request copies of lot plan and
vicinity map.
5.
SURVEY. Make sure that the land described on the title is really the land that you are buying. If there is
any question about this, hire a private land surveyor or a geodetic engineer to mark the boundaries of the
property you are buying.
6.
ACCESS. If the property does not front on a public road, make sure of the validity of any easement or
right-of-way to the property. If you are buying during the dry season, consider what your access road will be
like during the wet system. We bought our property when it was dry. Access was fine but became nearly
impossible during the wet season. Who will be responsible for maintaining a private road giving access. It
will probably be you as other property owners will be unable or unwilling to shoulder the expense.
7.
MUNICIPAL TREASURER/BACK TAXES. Bring the Certified True Copy of Tax Declaration to the
Municipal Treasurer (if property located in municipality) or City Treasurer (if property located in city) and
request a Real Property Tax Computation. This is to find out if the property owner is up to date with real
property tax payments.
8.
PRESCRIPTIVE EASEMENTS. Check for any existing prescriptive easements or existing uses such as
water lines, sewer lines, power lines, paths, trails or roads not noted on the title.
9.
NEIGHBORS, BARANGAY CAPTAIN. Talk to everyone around the property, neighbors, etc. Talk to the
barangay captain. Talk your fool head off to anyone walking near the property and see if they have any
claims or info.
10.
VACANCY. Check to make sure no one is living on the land. If they are, getting rid of them can be a
major headache and/or expense. If anyone is living on the land make it the responsibility of the seller to
deliver the land vacant. After closing, take steps to ensure that the property stays vacant.
11.
If in a subdivision, any underlying problems, encumbrances which could impact your property?
12.
IS PUBLIC WATER/SEWER AVAILABLE? If not, how will these be arranged. Is landline telephone
service available? What about Internet access? Is DSL available? If too far from the nearest cell tower,
wireless Internet may not work. If this is important to you (and it is to most foreigners) ask Smart or Globe
to check the signal strength before buying.
13.
OUTSTANDING BILLS. Seller must provide proof of payment of outstanding electric, water, telephone,
Internet bills. Otherwise, the utility company will require you to pay any outstanding bills before giving you,
the new owner, service.
14.
IS TELEPHONE/INTERNET AVAILABLE? While wireless options are available, wired internet access
is usually better, plus, if you have a wired telephone connection, domestic phone calls are much cheaper
than cellphone calls.
15.
ELECTRICAL CONNECTION. Is the property close to public utility lines. If not it, you may face and
expensive ordeal to bring power to your property.

16.

CAPITAL GAINS TAX. Legally, CGT is the responsibility of the seller but who pays the CGT is part of
the purchase negotiations. The seller may get satisfaction out of getting the buyer to pay and may be
willing to concede on other issues.
17.
TITLE. Property should be titled to both the Filipina wife and the foreign husband. Those who claim
that land must or should be titled only in the name of the Filipina wife, should note that the courts in various
cases have accepted the fact that land was titled in one name only, as being evidence of the separate
nature of the land holding.
18.
REGISTRATION AND DELIVERY OF TITLE. Ask your attorney for a proposed closing statement.
Make sure that your attorney handles title registration and that all fees and documentation needed for
registration are in your attorneys hands at closing.
19.
LEGAL REPRESENTATION. Hire an experienced real estate attorney to represent you. NEVER agree
to use the sellers attorney to represent you. Try for a 2% flat fee.
20.
NOISE. Noise is a fact of life in most places in the Philippines. This can be a special problem if you
are near a barangay (municipal) hall. Check the distance form your dream property to the nearest
barangay hall. For fiestas and other events, huge sound systems are moved in and can make your life
miserable. Dont bother complaining, it will only make matters worse for you.

Complete Procedures of Documenting and Registering a Philippine Real Estate Sale (April 9th, 2010)
Refhttp://www.sulit.com.ph/index.php/view+topic/id/38826/Complete+Procedures+of+Documenting+and+Regis
tering+a+Philippine+Real+Estate+Sale

STEP 1: AT THE CITY MUNICIPAL ASSESSORS OFFICE, SECURE THE FOLLOWING:

1. Certified True Copy of Tax Declaration (House and Lot)
2. Certificate of No Improvement (If vacant lot)
3. Original Copies 1 for BIR and 1 for Register of Deeds

STEP 2: AT THE CITY MUNICIPAL TREASURERS OFFICE, SECURE A TAX CLEARANCE

*In order to secure a Tax Clearance, Real Property Tax must be updated as of date of document of sale.

STEP 3: AT THE BUREAU OF INTERNAL REVENUE, PAY THE FOLLOWING:

1. Capital Gains Tax (6% for individual seller or 7.5% for corporation)
2. Documentary Stamps Tax (1.5%)
Note:
*Capital Gains Tax and Documentary Stamps Tax shall be based on Selling Price (per Deed of Sale), Market
Value of Tax Declaration, or BIR Zonal Value, whichever is higher.
*Form for Capital Gains Tax can be secured from the BIR or can be downloaded from the BIR
website http://www.bir.gov.ph
Requirements:
a. Photocopy of Certified True Copy of Transfer Certificate of Title
b. Certified True Copy of Latest Tax Declaration
c. Real Estate Tax Clearance
d. Original and two (2) Photocopies of Deed of Absolute Sale
e. Certificate of No Improvement from the Assessors Office if vacant lot.
Additional Note:

a. Payment for Capital Gains Tax and Documentary Stamps Tax shall be in cash or in managers check, to be
paid to the BIR Regional office or BIR-authorized banks where property is located.
b. Capital Gains Tax shall be filed and paid to the BIR within thirty days from date of sale.
c. Documentary Stamps Tax shall be paid on or before the 5th day of succeeding month from the date of sale.

STEP 4: AT THE CITY/MUNICIPAL TREASURERS OFFICE

Pay the Transfer Tax at the Treasurers Office.
Requirements:
a. Photocopy of Deed of Absolute Sale
b. Photocopy Transfer Certificate of Title
c. Photocopy of Tax Declaration
d. Photocopy of Real Estate Tax Clearance
*Transfer Fee is 1/2 of 1% of Selling Price or Market Value of Tax Declaration, whichever is higher

STEP 5: THE REGISTER OF DEEDS

Submit to the Register of Deeds where property is located the following documents:
a. Owners Duplicate Copy of Transfer Certificate of Title
b. Deed of Absolute Sale (3 copies)
c. Certificate Authorizing Registration from the BIR
d. Transfer Fee Receipt
e. Photocopy of Real Estate Tax Clearance
f. Photocopy of Tax Declaration or if vacant lot, Certificate of No Improvement
A NEW TITLE UNDER THE NEW OWNERS NAME WILL BE RELEASED BY THE RD
REMINDER: The owner or the broker as authorized by the owner should be the one to present the above
documents to the Register of Deeds because the new TCT shall be released only to the presenter of the above
documents.

STEP 6: AT THE CITY/MUNICIPAL ASSESSORS OFFICE

Secure from the Assessors Office a new Tax Declaration.
Requirements:
a. Photocopy of Transfer Certificate of Title under the new owners name, duly authenticated at the Assessors
Office
b. Photocopy of Deed of Absolute Sale
c. Real Estate Tax Clearance

Remember, you must always bring Certified True Copies of the documents as well as necessary receipts to
avoid inconvenience in case you will be required to present them...

For those who have completely decided and are positively sure that they want to make a real estate investment, here is
a step-by-step guide on the procedure of purchasing real estate in the Philippines:

Step 1 Establish specific standards for the property that you want to purchase.
You would need to know for what purpose your prospective property will be used. Then you would have to decide what
type of property would be most suitable for your purpose. You would then think about where is your ideal location for the
property. You should also determine other special qualifications that you would want the property to have. And of course, it
is also very important that you get to consider how much you are willing and capable of spending for the purchase.

Step 2 Contact credible agents or brokers to find the perfect property.

Now that you have outlined what you want for your property, it will be easier to search for the property based on the
specifics that you have decided upon. Finding the right property will not be a blind search. Your pre-meditation regarding
the future purchase will save you much time and effort. Asking assistance from a trustworthy agent or broker will also
make this step a lot easier. A broker is someone appointed by a property owner or a developer to sell their property. There
are several advantages for the buyer to asking assistance from the broker instead of just dealing straight with the owner.
Brokers are great transaction organizers, they make it an easy time for both the buyer and the seller. They are the ones
who set appointments, suggests and recommends good real estate options, escorts the buyer to personally view
prospective property choices, assist in sales negotiations and provide the legal papers and other things needed before
during and after the selling process. Brokers are a great help since they already know certain technicalities regarding the
legal processing of the sale, especially when the owner himself lacks expertise on that field.

Step 3 After selecting a property to buy, arrange legal requirements for buying.
This step might be the trickiest and most scrutinizing stage in the buying process. Keep in mind that it is of paramount
importance to assure the legal credibility of the ownership of the property. Get a Certified true copy of the Transfer
Certificate of Title for the corresponding property from the Register of Deeds to make sure that it is authentic. Also,
make sure that the property has no liens or mortgages on it. Hire a land surveyor or geodetic engineer to make sure that
the property you are buying is the one indicated on the technical description on the Transfer Certificate of Title. It would
also be good to ask for identification papers from the selling party to validate whether the sellers are the real owners of the
property. Make sure that all tax liabilities for the property are properly settled.

Step 4 Make financial settlements for the property.

You should ask for a sample computation and determine the payment scheme on how you would be able to pay for the
purchase depending on your payment capabilities. It will also be practical to pay a reservation fee for the property to make
sure that the property will not be offered to other potential buyers while you decide on your payment scheme and prepare
the money needed for the purchase. When you have already collected the money and decide on the payment scheme,
settle the payments. In some cases, you are required to sign post-dated checks for corresponding monthly amortizations,
if the property you are dealing with is under a developer. The developer may sometimes check your credit history and ask
for certain requirements. Supply all needed papers and make sure that you sign all necessary documents. It is also

important to make sure that the Deed of Sale, Contract of Sale and other corresponding documents on the property
respectively noted on the Register of Deeds.

Most people know that buying a property is not a simple task, but very few appreciate how much more complicated the
process of transferring land titles from the sellers name to the buyers name is. The importance of land title
transfer should not be underestimated. Remember, this is where you, as a buyer, will start claiming the property as your
own. The issuance of a new land title under your name will be your proof of ownership; otherwise, you might be facing
technical, legal, and financial problems later on, because of an improper land title transfer or the absence of it.

Where Does It Start?

The process of buying a property does not end with paying the seller and executing a Deed of Sale. What is important for
you to remember is that once the Deed of Sale has been signed and notarized, deadlines for tax payments are already in
effect. Should you fail to meet these deadlines, the penalties and surcharges will certainly make a dent on your pocket.
Sometimes, if payment has been delayed for several years, this might be even bigger than the value of the property at the
time it was bought.
Ideally, even before the property is purchased, you should already plan on land title transfer just to make sure that even if
you will not be able to do it yourself, you have someone doing it for you, you can trust. Remember, ownership is not
complete until you register the title under your name.

These are the steps for transferring a land title:

1. File and secure the documentary requirements at the Registry of Deeds and Municipal or Provincial
Assessors Office.
2.

Secure assessment of transfer taxes at the Bureau of Internal Revenue (BIR) and Municipal or City
Treasurers Office.

3. File documents at the BIR for the issuance of Certificate Authorizing Registration (CAR) or BIR Clearance.
4. Pay the Transfer Taxes and secure the Tax Clearance.
5. File documents at the Registry of Deeds for the issuance of new land title.
6. File documents at the Municipal or Provincial Assessors Office for the issuance of new Tax Declaration.

It is important to note that this step is often missed out. Transferring ownership of a Tax Declaration should always be
done after Land Title Transfer as the name on the Land Title should coincide with the name indicated on the Tax
Declaration.
These steps will require you to go back and forth between multiple government agencies. In addition, the whole procedure
could take several months to complete, more so if there are problems with the propertys existing documents or records.
The process might also require constant follow-ups with the government agencies, and sometimes it is necessary to
personally visit the respective agencies to follow up and speed up the process.
If accomplishing these tasks personally is not possible for you, then it would be wise to look for someone, a duly
registered company preferably, who has expertise in this matter. Remember, you must transfer ownership immediately
after buying a property to avoid encountering problems later on and paying a huge penalty for late transfer.