Guide in Title Transfer of Properties

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
Real estate taxes due up to date of sale.
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, which ever is higher.
Transfer Tax - 0.5% - 0.75 % of 1 % of the selling price, or zonal value or fair market value, which ever 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.

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 Absolute Sale" is a Legal Document for transfer of real estate property ownership.

The Deed of Absolute Sale is brought to the Bureau of Internal Revenue for the Computation of Capital Gains Tax / Withholding Tax and Documentary Tax . After payment of Taxes.
BIR will issue CAR (Certificate of Authority to Register)
Pay Transfer Fees at City Treasury
Pay Registration Fees at The Registry of Deeds and have Transfer of Ownership officially recorded.
Registry of Deeds issue new Transfer Certificate of Title / or Condominium Certificate of Title.

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 / and
Tax clearance
Notarized copies of the Deed of Sale
Certified true copy of Tax declaration of the property
Receipt from Bureau of Internal Revenue that the capital gains tax and documentary stamps have been paid
Certificate of Authority to Register (CAR)
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.

If you like this post, please share it. Thank you.

Sponsors