Here’s a 6-step guide to help you process the transfer of your land title:

1. File and secure the required documents at the Office of the Bureau of Internal
Revenue Regional District (BIR RDO)

Before making your way to the office, make sure you have secured the complete list of all necessary
documents. Bring hard copies of the required documents below:

 (1) Original copy and (2) photocopies of the notarized Deed of Absolute Sale (DAS)
 (1) Owner’s duplicate copy and (2) photocopies of the Transfer Certificate of Title
(TCT) OR the Condominium Certificate of Title (CCT) in case of sale of condominium units
 (1) Certified True Copies and (2) photocopies of the latest Tax Declaration for land and
improvement of the real property. *NOTE: 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 is required
 Tax Identification Numbers (TIN) of the Seller and Buyer

Take note that there are additional requirements for certain cases. It’s best to double check to minimize
numerous back and fourths:

 If the person signing on the document is not the owner as it appears on the TCT or
CCT:Special Power of Attorney (SPA)
 If the SPA is executed abroad: Certification of the Philippine Consulate
 If zonal value cannot readily be determined from the documents submitted: Location
plan or vicinity map
 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: Refer to the required documents filed under
the Registration of Real Property with the Register of Deeds
 Other requirements as may be required by law, rulings, regulations, or other issuances

2. Secure assessment of transfer taxes at the BIR and Authorized Agent Bank
(AAB) ORMunicipal OR City Treasurer’s Office

After filing the required documents, a BIR representative will calculate your Capital Gains Tax (CGT) and
Documentary Stamp Tax (DST). Afterwards, they will ask you to sign three (3) copies each of the ff:

 BIR Form 1706 (CGT)

 BIR Form 2000 (DST)

These will then be filed at the AAB. For areas where there are no AABs, they will be filed with the
Authorized City or Municipal Treasurer.

3. File documents at the BIR for the issuance of Certificate Authorizing Registration
(CAR) OR BIR Clearance

You will receive a claim slip with the claim date of the CAR, which will be released along with the following
documents:

 Original copy of the Deed of Absolute Sale, stamped as 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 as received by
the BIR
 Copies of the Tax Declaration for land and improvement

According to BIR Memorandum Order No. 15-03, BIR RDOs should release CARs for all One Time
Transaction (ONETT) within five (5) days of submitting all required documents.

4. Pay the Transfer Taxes and secure the Tax Clearance at the Local Treasurer’s Office

Aside from paying the Transfer Tax, you also need to secure the following documents for the issuance of
the Tax Clearance:

 (1) Original copy and (1) photocopy of the Deed of Absolute Sale
 (1) photocopy of the Tax Declaration
 Official Receipt of Payment of Real Property Tax and Special Education Fund Tax for the
current year

5. File documents at the Registry of Deeds for the issuance of new land title

The new owner’s duplicate copy of the TCT and CCT in your name will be released once you have
presented all of the following documents:

 (1) Original Copy and (3) photocopies of the Deed of Absolute Sale, stamped as received by
the BIR
 Seller’s Owner’s Duplicate Copy of the TCT or CCT
 (1) Original Copy of the CAR
 (1) 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:
o Secretary’s Certificate authorizing the sale of the real property
o Certified True Copy of the Articles of Incorporation and By Laws of the seller or buyer
corporation

6. File documents at the Municipal or Provincial Assessor’s Office for the issuance of
new Tax Declaration

For the release of the new Tax Declaration, present a photocopy of the following documents:

 Deed of Absolute Sale

 TCT OR CCT
 CAR
 Transfer Tax Receipt
 Latest Tax Receipt OR Tax Clearance

For some local assessors’ offices (ex. Makati City), additional documents are required:
 1. Subdivision Plan, if lot is subdivided
2. Full-color photos of the house, lot, or condominium unit

Do not forget to accomplish this last step, as this is often missed out. Remember – 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

long with a property’s price are other expenses involved in its purchase, and perhaps the most important
is the cost to transfer the land title

Arguably one of the largest transactions most buyers or sellers can make, the transfer of property is
understandably a cumbersome process. Apart from the significant sums exchanged during a sale, there is
also a myriad of paperwork and fees that need to be completed and paid for.

Among these fees is the cost to transfer of a land title, which is, of course, done when a property is
bought, sold, inherited, or donated. If you are a buyer, an heir, or a donee, a new land title under your
name is important as it serves as proof of your ownership of property.

In the absence of the important document, or its improper processing, your new ownership of the property
can be disputed. Among the key aspects which you should make sure is covered to ensure correct
processing, are the fees involved when transferring a land title.

Q: How Much Does It Cost to Transfer a Land

Title?
A: Unlike in other purchases, buying real estate does not consist of “one big cost.” Apart from the price of
the property, there are also fees and taxes that need to be covered to complete the transaction. Among
these is the cost to transfer the land or property title, which itself is not one singular expense, but also a
number of fees and taxes, the amounts of which are based by how much the property cost at the time of
transaction or transfer.

 Capital Gains Tax: equivalent to 6 percent of the selling price on the Deed of Sale or the
zonal value, whichever is higher
 Withholding Tax: applies only when the seller of the property is a corporation
 Unpaid real estate taxes due (if any)
 The commission of the agent or broker
 Documentary Stamp Tax: this is commonly set at 1.5 percent of the selling price, or its
zonal value or fair market value, depending on which is higher
 Transfer Tax (Local Treasurer’s Office): this is tax is imposed on the sale, barter, or any
other mode of transferring of ownership or title of real property, at the maximum rate of 50
percent of 1 percent (75 percent of 1 percent in the case of cities and municipalities within
Metro Manila) of a property’s worth.
 Transfer Tax (BIR): Transfer taxes may also be owed to the Bureau of Internal Revenue.
According to the BIR, if the property was/is donated, this is in the form of donor’s tax. If the
property was transferred by way of inheritance, this is in the form of estate tax.
 Registration Fee: commonly set at 0.25 percent of the selling price, or zonal value or fair
market value, depending on which is higher.
  Incidental and miscellaneous expenses incurred during the registration process, such as
notary fees.

The total of these taxes and fees is the cost of transferring a land title which, as mentioned, depends on
the overall value of the land or property being transferred.

Make sure to include the cost to transfer the land title when budgeting for a new property. Image via
Deposit Photos

Who Shoulders the Land Title Transfer

Expenses?
Another aspect of paying for the cost of transferring a land title is agreeing on who between the buyer and
seller covers which of the fees. The standard practice in the Philippines is that the seller covers the capital
gains and withholding taxes, as well as any existing unpaid real estate taxes that are due, and the
commission of the agent or broker assisting with the transaction. The buyer, on the other hand, covers the
documentary stamp and transfer taxes, as well as the registration fees and other miscellaneous expenses
incurred at the duration of the transfer.

The aforementioned arrangement for sharing expenses, while standard, can be different, where fees
commonly covered by the seller is shouldered by the buyer, and vice versa. This is provided that the two
parties mutually agree on other terms during the negotiation period, and have yet to sign the Deed of
Sale. Also known as the Deed of Absolute Sale, this document shows legal transfer of real estate
property ownership, and is what is taken to the Registry of Deeds to be officially recorded after a buyer
pays the documentary stamp, transfer tax and registration fees for the said land title transfer.
A Separate Transaction from Home Purchase
According to Jake Loria, licensed real estate broker and founder of The Real Estate Group Philippines, all
the aforementioned requirements indeed make the transferring of land titles one of the most burdensome
processes in local real estate. While buyers and sellers can set agreements and embark on paying the
taxes and fees and having the documents processed themselves, Loria suggests utilizing the services of
companies who specialize in title transfers.

“There are title transfer companies that can help take the burden away. If buyers are willing to pay
millions to buy the property, Php 30,000 or something within that price range should not be too big of an
issue because what they really want to make sure of is the transfer is done right and complete.”

He also shares that more often than not, the transferring of a title for a buyer or the paying of the capital
gains tax for the seller is a whole new transaction separate from the sale, so buyers can expect an
expense outside of a broker’s commission, which is well worth the amount given that a “broker’s main job
is only to close the sale and to make sure the buyer receives the title clean.”

Although a great deal of effort and research was put into the creation of this article, Lamudi Philippines
always advises home buyers and future property owners to consult with professionals, such as licensed
real estate brokers, attorneys, to ensure their real estate transactions are properly and promptly
processed.

References: foreclosurephilippines.com, bir.gov.ph, myproperty.ph

Main image via Deposit Photos

Guide when Buying real Estate in the Philippines

This is the standard sharing of expenses between the buyer and the seller
when transferring the real estate property title (TCT - Transfer Certificate of
Title or CCT - Condominium Certificate of Title) to a new owner: 

The SELLER pays for the:

 Capital Gains Tax equivalent to 6% of the selling price on the Deed of

Sale or the zonal value, whichever is higher. (Withholding Tax if the
seller is a corporation)
 Unpaid real estate taxes due (if any).
 Agent / Broker's commission.

The BUYER pays for the cost of Registration:

 Documentary Stamp Tax - 1.5% of the selling price or zonal value or

fair market value, whichever is higher.
  Transfer Tax - 0.5% of the selling price, or zonal value or fair market
value, whichever is higher.
 Registration Fee - 0.25% of the selling price, or zonal value or
fair market value, which ever is higher.
 Incidental and miscellaneous expenses incurred during the registration
process. These payments may seem high but other countries have
significant taxes too. Try looking at what they pay in Australia!

The above sharing of expenses is the standard practice in the Philippines.

However, buyers and sellers can mutually agree on other terms as long as it is
done during the negotiation period (before the signing of the "Deed of Sale").

The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal
transfer of real estate property ownership. The deed of sale is then taken to the
Registry of Deeds to be officially recorded after paying the documentary
stamp, transfer tax and registration fees. Always verify from the Registry of
Deeds the authenticity of a Transfer Certificate of Title before buying a
property. If the seller only has a tax declaration, be extra cautious and check
with neighbours, the Barangay captain or anyone in the know in the
community to verify the seller/owner's true identity and the property's history.

Your Agent / Broker will usually do the registration process (sometimes for a

fee). However, all government taxes, transfer fees and incidental or
miscellaneous expenses will be shouldered by the buyer.

Documents needed when transferring the title (TCT or CCT) to the new owner:

 Certified true copy of the title

 Notarized copies of the Deed of Sale
 Latest tax declaration of the property
 Certificate from the Bureau of Internal Revenue that the capital gains
tax and documentary stamps have been paid
 Receipt of payment of the transfer tax and registration fees

An adapted form of the "Torrens" system of land registration is used in the

Philippines. The system was adapted to assure a buyer that if he buys a land
covered by an Original Certificate of Title (OCT) or the Transfer Certificate of
Title (TCT) issued by the Registry of Deeds, the same will be absolute,
indefeasible and imprescriptible.