Situation: You are planning to sell a property somewhere in the Philippines. Maybe you do not know how to go about it and how much it will cost to do it. Here is a step by step process of registering a property transaction in the Philippines and the estimated costs of selling, transfering and registering a property in the Philippines:
| No. |
Procedure |
Time to Complete |
Associated Costs |
| 1 |
Preparation of the deed of sale and ratification by notary public
Anyone can prepare the document, however, the deed of sale must be ratified before the notary public and it is common for him to draft it and conduct the whole process on behalf of the parties.
|
1 day |
1.5% property value, including PHP 100 for notarization alone |
| 2 |
Obtain a certified true copy of latest tax declaration from the Assessor’s Office of Manila
The seller obtains a certified true copy of the latest tax declaration from the Assessor’s Office of Manila.
Agency: Assessor’s Office |
1 day |
PHP 100 |
| 3 |
Payment of Documentary Stamp Tax and Capital Gains Tax at an authorized bank
The seller files the Documentary Stamp Tax return and Capital Gains Tax return with the authorized agent bank in the Revenue District of Manila. This is done within 5 days after the close of the month when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the authorized bank to the account of the Bureau of Internal Revenue. The Capital Gains Tax is 6% of capital gains based on selling price, fair market value or zonal value, whichever is higher.
The Documentary Stamp Tax is 1.5% based on selling price or fair market value, whichever is higher.
The documentation shall include:
Original copy and photocopy of notarized deed of sale of building (obtained in Procedure 1)
Certified true copy of transfer certificate of title (in the name of seller)
Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 2)
Photocopy of the latest realty tax receipt
Letter-request
Identification card of the person requesting
Agency: Bank |
1 day |
1.5% of property value (Documentary Stamp Tax) |
| 4 |
Obtain tax clearance (or Certificate Authorizing Registration) from the Bureau of Internal Revenue
After paying the taxes in Procedure 3, the seller must obtain a tax clearance (or Certificate Authorizing Registration) from the Bureau of Internal Revenue. This certificate will authorize the registration of the property.
The documentation shall include:
Certified true copy of transfer certificate of title (in the name of seller)
Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 2)
Tax identification numbers
Agency: Bureau of Internal Revenue |
Up to 14 days |
PHP 115 |
| 5 |
Obtain a tax clearance certificate of Real Estate Taxes from the Treasurer’s Office of Manila
The seller, after paying any due amounts, obtains a tax clearance certificate from the Treasurer’s Office of the Local Government Unit (Manila).
The documentation shall include: an original of the official receipt evidencing payment by seller of realty taxes.
Agency: Treasurer’s Office |
1-3 days |
PHP 75 |
| 6 |
Payment of transfer tax at the Treasurer’s Office of Manila
The transfer tax must be paid at the Treasurer’s Office of Manila.
The documentation shall include:
Certificate Authorizing Registration from the Bureau of Internal Revenue (obtained in Procedure 4)
Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure 5)
Official receipt of the Bureau of Internal Revenue (for documentary stamp tax) (obtained in Procedure 4)
Agency: Treasurer’s Office |
1 day |
0.75% of property price (transfer tax) + PHP 125 (certificate of payment) |
| 7 |
Apply with the Assessor’s Office of Manila for the issuance of a new tax declaration over the building in the name of buyer
The buyer applies with the Assessor’s Office of Manila for the issuance of a new tax declaration over the building in his name.
The documentation shall include:
Photocopy of notarized deed of sale of building (obtained in Procedure 1)
Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 2)
Certificate authorizing registration from the Bureau of Internal Revenue (obtained in Procedure 4)
Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure 5)
Photocopy of official receipt of transfer tax payment (original copy to be presented) (obtained in Procedure 6)
Agency: Assessor’s Office |
3 days |
no cost |
| 8 |
Apply for registration with the Register of Deeds of Manila
The buyer applies for registration with the Register of Deeds of Manila.
The following internal steps take place after the application is submitted:
1. The Entry clerk receives and enters all documents in the primary Entry Book (Judicial form No. 39) and notes therein the day, hour and minute of reception of all instrument in the order in which they are received.
2. Documents are then brought to the Registrar of Deeds (RD) or Deputy Register of Deeds for assignment.
3. Documents/Titles are assigned by the RD to the Land Registration Examiner (LRE) who prepares computation and order of payment of registration fees.
4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees are computed based on a schedule of Fees approved by the Department of Justice.
5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The owner’s copy of the title is compared to the title on file, produced by Records Officer/Vault keeper.
6. If the instrument is not ready to be registered, the LRE recommends its denial to the RD. If the instrument is ready, the LRE likewise recommends to the RD the registration of the document through a routing slip.
7. RD reviews examination, and once same is approved, assigns documents to clerk for action, with instruction on the route slip.
8. If the transaction involves issuance of title, Records Officer/Judicial Form Custodian records the transaction in the logbook releases sets of title forms (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk.
9. Assigned employee acts on the documents, as instructed.
10. Final registration – RD signs titles and documents.
11. Release of documents – by the releasing clerk to the buyer who should be ready with ID and copies of official receipts of the registration fees.
The documentation shall include:
Articles of incorporation and by-laws of the buyer
Secretary’s certificate containing the resolution of the board of directors of buyer approving the sale
Original copy of owner’s duplicate of the transfer certificate of title (in the name of seller)
Certificate authorizing registration from the Bureau of Internal Revenue (obtained in Procedure 4)
Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure 5)
Official receipt of transfer tax payment (obtained in Procedure 6)
Official receipts of the Bureau of Internal Revenue (for capital gains tax and documentary stamp tax) (obtained in Procedure 3)
Agency: Register of Deeds |
For a sample of an Deed of Absolute Sale, email askattybatoy@gmail.com
Lex Libre 