June 6, 2022
Now that you bought a house and lot or lot for sale, the next step is to transfer the land title under your name or to the group of people who own the property.
WHAT IS A LAND TITLE?
A land or certificate of title is a document that confirms the right of a person or group of people to own and have a property claim. Aside from this, a land title is also a tool used by landowners and homebuyers to understand existing liens, usage rights, easem*nts, natural resource rights, and other rights.
A land title is usually mistaken as a deed, but they are different. A deed is a written document executed under law, wherein a person grants or sold a certain land or property to another person while a title is a legal right to own a property.
HOW TO KNOW IF THE LAND TITLE IS CLEAN?
Before buying and transferring a property it is a must to check if the title is clean. There are four ways to check the authenticity of a title- check the paper, consult a lawyer, double-check the description of the property on the title, and check the real property tax.
- Check the paper- Forms used in property titles are printed by the Banko Sentral ng Pilipinas. Papers used for these documents are made from 50% cotton and 50% chemical wood pulp with colored fibers and have a similar texture to a bank check. Fake titles usually use materials of low quality.
Tip: Held the land title document against the light. If you can see the Land Registration Association (LRA) watermark through the paper, that land title document is authentic.
2.Consult a lawyer- Lawyers being experts to land titles and deeds can judge if the document is authentic or not.
3. Double-check the description of the property on the land title document- This is done to make sure that the description of the land area specified in the property title matches the actual land area when surveyed.
4.Check if the real property tax is updated- To be sure that the seller’s property tax is updated, you can check the former at the Assessor’s Office of the municipality where the property is situated.
If it is not updated, the seller needs to update the payment and make a notarized agreement that he will do so.
HOW TO TRANSFER A LAND TITLE?
REQUIREMENTS
- Eight copies of notarized Deed of Conveyance such as:
Deed of Donation- a legal document that transfers property from the owner to another person through donation.
Deed of Absolute Sale- a legal document stating that one party is transferring his real estate property to another.
Extrajudicial Settlement of Estate with Sale- is a legal document and agreement between the heirs of the deceased person that sets how the estate of the deceased is divided or distributed.
For sales transactions, you can prepare an Acknowledgement Receipt of the amount paid to the seller or an official receipt from the developer.
The deed should indicate the Tax Identification Number numbers of the buyer and seller. The spelling indicated on the deed, TIN, and other identification documents should be right and identical, same goes with the signatures on the IDs and deed.
The eight copies of these documents will be distributed to the Notary Public, Seller, Seller’s Licensed Real Estate Broker, Buyer, Buyer’s Licensed Real Estate Broker, copy for submission to government agencies such as Bureau of Internal Revenue, LGU Treasurer’s Office, Registry of Deeds and the LGU’s Assessor’s Office, Copy for the Homeowner’s Association and Copy as Reserve.
- Photocopies of the signatories in the deed with three identical signatures of each buyer and seller. Make sure that the IDs have photos, signatures and are not expired, as they will serve as the current identification document of the seller and buyer.
The acceptable Valid IDs in the Philippines are:
- Passport.
- Driver’s license.
- Professional Regulation Commission (PRC) ID.
- Postal ID.
- Voter’s ID.
- Taxpayer Identification Number (TIN).
- Government Service Insurance System (GSIS) e-Card.
- Social Security System (SSS) card.
- The Unified Multi-Purpose ID (UMID).
- Official Receipt of the Notary Public for the notarization of the deed.
- Three copies of the Certified true copy of the Title from the Registry of Deeds.
- Certified true copy of the latest Tax Declaration issued by the Assessor’s Office of the municipality where the property is located.
- Tax Clearance that certifies that the taxes for the property, land, and its improvements has been settled. This clearance is issued by the Office of the Treasurer of the municipality where the property is located.
The following requirements are needed to get a Tax Clearance:
- Previous Tax Clearance
- Latest Tax Declaration
- Latest Official Receipts of Real Property Tax payments
- Special Power of Attorney and valid ID if you are not the registered owner.
- Certificates such as:
- Marriage Certificate – for married sellers and buyers
- Birth Certificate- to show the relationship between the donor and donee for Deed of Donation and between the deceased person and his heirs for the Extra-Judicial Settlement of Estate.
- Certificate of No Marriage or CENOMAR for single buyer or seller.
- Certificate of No Improvement for lots-only sale issued by the Accessor’s Office of the municipality where the property is located.
- Notarized Homeowners Association Clearance indicating that the property is in the subdivision, all the fees and dues were settled, if the property is either a lot, house and lot or lot with a building, and if the property was leased.
- 3″x5″ colored photo showing the front outside of the house. Take note that the house number of the property should be visible in the photo.
- Location Map which you can either draw or print using Google Map.
- Duplicate copy of the Transfer Certificate of Title (TCT)
- Special Power of Attorney to process the transfer if someone else will process the title transfer for you. Agencies such as BIR, the local government’s Treasurer’s Office, Assessor’s Office, and Registry of Deeds require Special Power of Attorney duly signed by you and the seller.
STEPS
1.Provide and submit the documents needed by the Bureau of Internal Revenue’s (BIR) Revenue District Office (RDO) that has jurisdiction or where the property is located.
Documents needed are:
- An original copy and two photocopies of the notarized Deed of Absolute Sale.
- Photocopy of all signatories on the Deed.
- Official Receipt of the Notary Public for the notarization of the deed.
- An Owner’s duplicate copy and two of the Transfer Certificate Title.
- A Certified True Copy and two photocopies of the latest Tax Declaration for land and improvement of the real property or Sworn Declaration of No Improvement for lots with no improvement by the seller or Certificate of No Improvement issued by the municipality’s Assessor’s Office.
- Tax Clearance
- Clearance from the Homeowners Association.
- Certificates such as birth certificate, marriage certificate, and CENOMAR.
- Tax Identification Numbers of both the Seller and Buyer.
- Certificate of No Improvement for lots only.
- Special Power of Attorney if the person processing the transfer is not the owner or buyer of the property. If the Special Power of Attorney is done abroad a Certification of the Philippine Consulate is required.
- Location plan or vicinity map if the zonal value cannot be determined from the available documents.
2.Get an assessment and pay for the Capital Gains Tax or Value-Added Tax and Documentary Stamp Tax on your BIR RDO’s Authorized Agent Bank or ABB.
Documents Needed:
- Official and signed computation sheet from the BIR.
- Deed of Conveyance
- For Capital Gains Tax- Three copies of BIR Form 1706 signed by the seller.
- For Documentary Stamp Tax- Three copies of BIR Form 2000-OT signed by the seller.
- Cash or Manager’s Check. Make sure to contact the bank for the specific wordings that will be written on the Manager’s Check.
3.Submit the documents on steps 1 and 2 to your respected BIR RDO to get the Certificate Authorizing Registration or CAR.
After the submission of documents, you will be given an estimated period unto when you will pick up the two copies of Certificate Authorizing Registration, (a blue copy which will be used for the transferring process and a brown copy for your keep safe), original deed of conveyance stamped as Received by BIR and signed by an RDO Officer, and some supporting documents. Usually, it would take at least two to three weeks before you can get the CAR.
4.Submit the Deed of Conveyance, Tax Clearance, Certificate of No Improvement for lots, BIR Certificate Authorizing Registration, and Special Power of Attorney (given that someone else will process the transfer) to the Treasurer’s Office of the Local Government Unit where the property is located.
The Treasurer’s Office will then compute for the Transfer Tax that you can pay either through cash or Manager’s check. You will then be given an Official Receipt for the payment of Transfer Tax, Treasure’s Office rubber-stamped mark at the back of the Deed of Conveyance, and/or a Tax Certificate.
Documents Needed:
- Deed of Conveyance
- Tax Clearance
- Certificate of No Improvement for lots
- BIR’s Certificate Authorizing Registration
- Special Power of Attorney (given that someone else will process the transfer)
5.Submit documents to the Registry of Deeds for the computation of registration fees. After payment, it would usually take at least two to three weeks to present the new title.
Documents Needed:
- Deed of Conveyance
- Photocopies of IDs of all signatories in the deed
- Official Receipt of the Notary Public for the notarization of the deed.
- Certified True Copy of the Title
- A certified true copy of the latest Tax Declaration
- Tax Clearance
- Clearance from the Homeowners Association
- Certificates such:
- Birth Certificate
- Marriage Certificate
- Certificate of No Marriage
- Original and Duplicate Copy of the Title
- BIR’s Certificate Authorizing Registration
- Official Receipt for the payment of Transfer Tax
6.The last step is to submit documents to the Assessor’s Office of the municipality or city where the property is located. The Assessor’s Office will then issue a new tax declaration wherein the new owner needs to pay the assessment fee.
Documents Needed:
- A certified true copy of the new title
- Photocopy of the old title
- Deed of conveyance
- A certified true copy of the latest Tax Declaration
- Original and two photocopies of Transfer Tax Receipt
- Original and two photocopies of Business Tax Receipt / Business Permit if the previous owner is a corporation.
- Duplicate and photocopy of BIR Certificate Authorizing Registration
- Original and photocopy of Tax Clearance
- Photos of property
COST OF TRANSFERRING TITLE
Transferring the land title from the seller to the buyer involves fees that both need to settle. Here are the common expenses of seller and buyers when transferring the land title:
SELLER pays for the:
- Unpaid real estate taxes.
- Capital Gains Tax equivalent to 6% of the selling price on the Deed of Sale or the zonal value, whichever is higher.
BUYER pays for the:
- Registration Fee – 0.25% of the selling price, or zonal value or fair market value, whichever is higher.
- Transfer Tax – 0.5% (in the provinces) or 0.75% (in Metro Manila) of the selling price, or zonal value or fair market value, whichever is higher.
- Documentary Stamp Tax – 1.5% of the selling price or zonal value or fair market value, whichever is higher.
- Incidental and miscellaneous expenses during the registration process.
HOW LONG WOULD THE WHOLE PROCESS TAKE?
Transferring the land title from the owner to the buyer usually takes at least three to four months. Given that you need to go to different agencies like the BIR, Registry of Deeds, Treasurer’s Office, and Assessor’s Office, just to transfer the land title document under your name. The process of going from one agency to another alone is time-consuming and requires a lot of patience.
WHAT IS eTitle?
Now that you have your property’s title, you have the option to convert it to eTitle.
eTitle is part of Land Registration Authority’s Voluntary Title Standardization Program wherein it gives title owners the option to upgrade manually issued titles to eTitles or electronic Title.
The advantage of upgrading your current title to an electronic or digitalized one, according to LRA, ensure fast and safe transactions and reliable retrieval of authentic copies.
FREE LAND TRANSFER PROCESSING
Reputable developers such as Vista Land and Landscapes, the largest homebuilder in the Philippines that offers a wide range of housing products that cater to the needs of every Filipinos from luxurious houses, mid-income housing segments, affordable low-cost housing, and vertical residences, provides free land transfer processing to home and lot buyers of their subsidiaries- Britanny, Crown Asia, Camella, and Lessandra located in Ilocos Sur, Pampanga, Pangasinan, Antipolo, Cavite, Iloilo, and Cebu.
To check Vista Land and Landscapes house and lots and lots for sale in key provinces and regions on the rise in the Philippines, visit ALL PROPERTIES.
