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| Here are the complete steps and procedures of documenting and registering a sale of a second-hand property in Philippine Real Estate. These are steps that EVERY BUYER and SELLER must know. Print this article if necessary… |
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| 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. |
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| Happy Investing Folks! |
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| STEP 1: CITY/MUNICIPAL ASSESSOR’S OFFICE SECURE THE FOLLOWING: |
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| 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 |
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| STEP 2 : CITY/MUNICIPAL TREASURER’S 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. |
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| STEP 3: BUREAU OF INTERNAL REVENUE PAY THE FOLLOWING: |
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| 1. Capital Gains Tax (6% for individual seller or 7.5% for corporation) |
| 2. Documentary Stamps Tax (1.5%) |
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| 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 |
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| 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 Assessor’s Office if vacant lot. |
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| 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. |
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| STEP 4: CITY/MUNICIPAL TREASURER’S OFFICE |
| Pay the Transfer Tax at the Treasurer’s Office. |
| Requirements: |
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| 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 |
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| *Transfer Fee is 1/2 of 1% of Selling Price or Market Value of Tax Declaration, whichever is higher |
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| STEP 5: REGISTER OF DEEDS |
| Submit to the Register of Deeds where property is located the following documents: |
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| a. Owner’s 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 |
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| A NEW TITLE UNDER THE NEW OWNER’S NAME WILL BE RELEASED BY THE RD |
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| 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. |
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| STEP 6: CITY/MUNICIPAL ASSESSOR’S OFFICE |
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| Secure from the Assessor’s Office a new Tax Declaration. |
| Requirements: |
| a. Photocopy of Transfer Certificate of Title under the new owner’s name, duly authenticated at the Assessor’s Office |
| b. Photocopy of Deed of Absolute Sale |
| c. Real Estate Tax Clearance |
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