Home Tips & Tricks How to transfer ownership of a property in the Philippines?

How to transfer ownership of a property in the Philippines?

211
0

Have you ever wondered how to transfer ownership of a property to another person in the Philippines? This process can be confusing for foreigners and even locals who are not familiar with the laws and procedures. 

In this blog post, we will provide an overview of the steps involved in transferring property ownership in the Philippines. Keep in mind that this information is meant to serve as a general guide only and should not be taken as legal advice. If you have any specific questions about transferring property ownership in the Philippines, we recommend consulting with a lawyer or real estate agent like HousingInteractive.

The transfer of ownership refers to the process of changing the legal owner of a piece of property. This can be done for a variety of reasons, such as when someone sells their property or when they inherit it from someone else.

In the Philippines, the process of transferring ownership is regulated by the country’s Land Registration Act of 496 and Presidential Decree No. 1529 which is governed by the Land Registration Authority (LRA) through The Registries of Deeds. These laws provide for the registration of properties in order to ensure their legal status and protect the rights of owners.

What is the Land Registration Authority (LRA)?The Land Registration Authority (LRA) is the government agency responsible for maintaining the land registration system in the Philippines. The LRA issues transfer certificates of title (TCT) and conduct land
registration proceedings.
What are The Registries of Deeds? The Registries of Deeds are the offices tasked with
keeping land transfer documents and maintaining the integrity of property ownership
records in the Philippines. In order to transfer ownership of a property, the seller and
buyer must go to the registry of deeds in the province, city, or municipality where the
property is located and register the sale.


The LRA also covers other types of properties such as buildings, houses, condominiums, and other improvements made on the land, machinery, and other movable properties that are affixed to the land.

History of ownership of properties in the Philippines

The Land Registration Act of 496 which took effect on February 1, 1903, is the primary law governing the transfer of ownership of land in the Philippines. The act requires that all transfers of ownership be registered with the government to be valid. Additionally, the act institutionalized a system known as the Torrens system, which is used to register and keep track of ownership of land in the Philippines.

What is The Torrens system?The Torrens system, which was developed in Australia in 1858 by Sir Robert Torrens, is the first method of registering ownership of land in the Philippines. Under the Torrens system, the Philippine government issues a certificate of title to the owner of a piece of land, which serves as conclusive evidence of ownership.


The advantage of the Torrens system is that it simplifies the process of transferring ownership of land. When a piece of land is sold, the new owner can simply register the transfer with the government and obtain a new certificate of title in their name. This makes the process of buying and selling properties much easier and more efficient at that time.

However, there are some disadvantages to the Torrens system. One is that it can be susceptible to fraud. For example, if someone obtains a fraudulent certificate of title, they may be able to sell the land to an unsuspecting buyer. Another disadvantage is that the system is not always up-to-date. This can create problems when trying to transfer ownership of land, as the transfer may not be reflected on the certificate of title.

Presidential Decree No. 1529 does not supersede or replace the LRA of 496. Rather, it supplements the act and provides additional requirements and procedures for the transfer of ownership of properties in the Philippines. 

One of the most significant changes introduced by PD 1529 is the creation of the Land Registration Commission and its Registries of Deed, which is the current Land Registration Authority (LRA). Additionally, the decree requires that a transfer tax be paid on all transfers of ownership of properties.

What is PD 1529?Presidential Decree No. 1529, also known as the Registration Decree, is a secondary law that supplements the Land Registration Act of 496. The decree establishes additional requirements and procedures for the transfer of ownership of land in the Philippines.

Transferring of Ownership

The transfer of ownership refers to the legal process in which one person transfers their established right to real property to another person, through sale, donation, or inheritance. The transfer of ownership can also take place orally, but it would have to be in the presence of two witnesses, who will both sign the contract.

The process of transferring ownership of real property in the Philippines is relatively simple. It can be done through public instruments such as deeds. 

What is a deed? A deed is a legal document that proves ownership of real property. It includes the names of the old and new owners and is signed by both parties. The deed is then registered with the Land Registry, which keeps a record of all property owners in
the Philippines.

Ways to transfer real estate ownership in the Philippines

There are three main ways to transfer ownership of real property in the Philippines: through sale, donation, or inheritance.

  1. Sale

The transfer of ownership of real property through sale is governed by the Civil Code of the Philippines. For a contract of sale to be valid, there must be an offer and an acceptance between two parties, with the intention to sell and buy, respectively. The price must also be certain and reasonable.

This is the most common way to transfer ownership of property. If you are to sell your property you will need to execute a deed of sale which will be registered with the Registry of Deeds. The deed of sale must be notarized and the transfer tax, capital gains tax, and other registration fees must be paid.

What is the sale of real property? The transfer of ownership of the real property
through sale is governed by the Civil Code of the Philippines. For a contract of sale to
be valid, there must be an offer and an acceptance between two parties, with the
intention to sell and buy, respectively. The price must also be certain and reasonable.

2. Donation

Another way to transfer ownership is through donation. In order to donate your property, you will need to execute a deed of donation which will be registered with the Registry of Deeds. The deed of donation must be notarized and the transfer tax and other registration fees must be paid.

What is a donation of real property? A donation is the transfer of ownership of the real property by gratuitous title. In order for the donation to be valid, it must be accepted
by the donee. The acceptance must be in writing and signed by the donee. The donor must also execute a deed of donation which will be registered with the Registry of Deeds. The transfer tax and other registration fees must be paid.

3. Inheritance

The third way to transfer ownership is through inheritance. In order to inherit property, you will need to have a copy of the death certificate of the deceased, as well as the deed of transfer of rights which will be registered with the Registry of Deeds. The deed of transfer must be notarized and the transfer tax and other registration fees must be paid.

What is inheritance? Inheritance is the transfer of ownership of the real property by
operation of law upon the death of the owner. It can be done through a will or by
intestate succession, which is when the ownership is passed on to the next of kin if the previous owner dies without a will. The heirs will need to execute an affidavit of
self-adjudication and have it registered with the Registry of Deeds. The transfer tax and other registration fees must be paid.


Regardless of the method of transfer, there are certain documents that are required in order for the transfer to be legal. These include a transfer certificate of title, registration form, and proof of payment. The transfer certificate of title is issued by the government and serves as evidence that the property has been transferred to the new owner. The registration form is used to register the transfer with the government. And finally, proof of payment is needed to show that the new owner has paid for the property.

Requirements for the transfer of ownership in the Philippines

The three most reliable legal documents that establish ownership of real estate properties in the Philippines include the Transfer Certificate of Title (TCT), Original Certificate of Title (OCT), and Tax Declaration Certificate. All these documents are proof of entitlement to your property with different certifications that can be used as evidence if there’s any problem or uncertainty related to who owns what type of property.

In addition to the Notarized Deed of Sale, the following documents are required for a property transfer in the Philippines:

  • The original TCT or Certificate of Title issued in the name of the Seller
  • The latest Tax Declaration of the property
  • The Transfer Tax Receipt
  • The Documentary Stamp Tax
  • The registration fee
  • The notarization fee
  • The Mortgage Clearance Certificate
  • The Certificate of No Adverse Claim
  • The Seller’s valid ID and proof of billing
  • The Buyer’s valid ID and proof of billing
  • Tax Identification Numbers (TIN) of the Seller and Buyer
  • Community Tax Certificate (Cedula) of the Seller and Buyer

The process of transferring ownership of a property in the Philippines begins with the execution of a deed between the seller and buyer.

Transfer of Real Estate Deed or Title Transfer

There are procedures involving the transfer of real estate deed or title transfer in order for the transfer of ownership to be effective and legal in the Philippines.

  1. Secure a certified true copy of the land title from the Registry of Deeds.

In order to transfer ownership of property in the Philippines, the property owner or seller must first obtain a Transfer Certificate of Title (TCT) from the government. The TCT is a document that serves as evidence of your ownership of the land. Look for any encumbrances or easements the property may have before placing the property on the market.

What are encumbrances? An encumbrance can be an assertion towards your property
by someone who is not even the owner. The three most common types of
encumbrances that apply to real estate are mortgages, easements, and property
tax liens.
What are easements? Easements happen when one’s interest in land requires
protection from another’s actions, like construction work or heavy traffic flow patterns.
What does this mean for you? This will impact how freely you can use the property until this person’s claim goes away. Like mortgages or other loans, encumbrances may restrict your ability to use the property as collateral. 

2. Get a Notary Public to sign off on the Deed of Sale.

This person will be responsible for verifying that all signatures match and that there are no typos or other errors before signing it officially.

What is the difference between Absolute and Conditional Deeds of Sale?A Deed of Sale is a document that is used to transfer ownership of land from one person to another in exchange for payment. This is the most common method of transfer and is typically used when someone sells their property. Registering this will make them valid across all provinces within our country’s borders.
A Deed of Absolute Sale is a document that states full payment has been made and the right of ownership is transferred immediately. It typically includes a warranty that the property is free from any legal claims or encumbrances.
A Deed of Conditional Sale is a document that states payment will be made in part and transfer of full ownership is subject to the fulfillment of conditions agreed on.


For corporate ownership, in order to legally transfer property ownership, both the buyer and seller must present a Certified Board Resolution approving the sale as verified by the corporate secretary through the issuance of a duly notarized Secretary’s Certificate (Sec Cert), as required by the Registry of Deeds.

What is a Secretary’s Certificate (Sec Cert)?The Secretary’s Certificate is a written document executed by the Corporate Affairs Officer or Secretary confirming that all resolutions and actions taken by the board have been recorded.

3. Taxes and fees must be paid off to the government

The tax arrears must be paid off by the property owner/seller with the Treasury and acquires a Tax Clearance Certificate. At the same time, an official copy of the latest assessment or Tax Declaration is secured from the municipality where the property is located so that no penalties or fees will be incurred by either party as soon as it is processed. 

What is a Tax Clearance Certificate or Tax Declaration? A Tax Clearance Certificate is a
document issued yearly by the Bureau of Internal Revenue (BIR) showing that an
individual or corporation has already paid their taxes and how much tax has been paid
for each real estate property. 


When transferring ownership of a property, it’s important to be aware of the tax implications. The transfer tax is payable to the government and is based on the value of the property. Sellers may also be responsible for capital gains tax, depending on their profit from the sale. It’s always best to consult with a qualified accountant or lawyer to ensure you are aware of all the taxes that may be applicable.

4. Capital Gains Tax (CGT) and Documentary Stamp Tax (DST)

The property owner/seller must get applicable CGT and DST computations from the BIR Revenue District Office (RDO) from where the property is located. The CGT rate is set at 6% while the DST is at 1%-1.5% of the sale price.

Once the DST and the CGT are computed, payments can be made through the Authorized Agent Banks (AABs) of the RDO. Payment for CGT is carried out by the seller, while the DST is normally settled by the buyer unless the seller agrees to pay for them.

5. File for a Certificate Authorizing Registration (CAR) with the BIR

The buyer or seller can file for a Certificate Authorizing Registration (CAR) with the BIR once payments of the taxes have been made.

Here are the documents needed when filing for a Certificate Authorizing Registration (CAR):

  • Notarized Deed of Absolute Sale (DOAS)
  • Certified True Copy (CTC) of Tax Declaration  – (Recent document)
  • Original Certificate of Title (COT) or Certified True Copy of the Transfer Certificate of Title (TCT)
  • With Improvement Certificate

The BIR issues the CAR, together with the following:

  • BIR Stamped Original Deed of Absolute Sale (DOAS)
  • BIR Stamped Documentary Stamp Tax (DST)

6. The seller, property owner, donor, transferor, or executor pays for the Transfer Tax

The seller, property owner, donor, transferor, or executor pays for the Transfer Tax at the municipality where the property is located. Transfer Tax is set at 0.5% to 0.75% of the sale price, depending on the location of the property. Transfer Tax must be paid within two months or sixty (60) days from the date of execution of the deed.

7. Apply for the Transfer of Certificate of Title (TCT) in the Registry of Deeds

After the release of the CAR, the buyer/new owner can proceed with the application for the Transfer of Certificate of Title (TCT) in the Registry of Deeds, which costs 0.25% of the sale price, plus a registration fee and notarization fee.

8. File for a new Tax Declaration Certificate

The buyer/new owner can then file for a new Tax Declaration Certificate or assessment of the sold property once the TCT is secured.

There are some restrictions on who can own property in the Philippines. Foreigners are not allowed to own land, but they can own condominium units and apartments in buildings that are at least 60% owned by Filipinos. They can also lease land for up to 50 years, with the option to renew for another 25 years.

The government has recently implemented a new policy, wherein value-added tax (VAT) is now levied on the sale of property in the Philippines. VAT is levied at 12% of the sale price. However, this tax may be exempt if the property is sold within one year from the date of acquisition, and if the seller is an individual.

Overall, the process of transferring ownership of a property in the Philippines is relatively straightforward. The most important thing to remember is to have all of the necessary documents in order to avoid any delays or complications.

Frequently Asked Questions on how to transfer ownership of property in the Philippines?

  1. What are the documents required for a property transfer in the Philippines?

The following are the documents required for a property transfer in the Philippines:

  • Notarized Deed of Sale
  • The original TCT or Certificate of Title issued in the name of the Seller
  • The latest Tax Declaration of the property
  • The Transfer Tax Receipt
  • The Documentary Stamp Tax
  • The registration fee
  • The notarization fee
  • The Mortgage Clearance Certificate
  • The Certificate of No Adverse Claim
  • The Seller’s valid ID and proof of billing
  • The Buyer’s valid ID and proof of billing
  • Tax Identification Numbers (TIN) of the Seller and Buyer
  • Community Tax Certificate (Cedula) of the Seller and Buyer

2. How much is the cost of the Transfer Title?

There is no exact amount on how much is the cost of the Transfer Title. When transferring ownership of a property, it’s important to be aware of the tax implications. The transfer tax and fees are payable to the local government unit and are based on the value of the property.

Taxes Transaction FeesWho
Pays?
Real Property
Tax (RPT) 
The RPT rate is set by the municipality or city where the
property is located and may range from 0.75% to 2% of the property value.
Seller/Owner
Tax ArrearsIf applicable, depending on the value of the property as
determined by the local assessor. 
Seller
Capital Gains
Tax (CGT)
CGT rate is set at 6% of the sale price, the zonal value,
or the fair market value, whichever is higher.
Seller
Documentary
Stamp Tax (DST)
DST rate is set at 1%-1.5% of the sale price, the zonal
value, or the fair market value, whichever is higher.
Buyer
Local Transfer Tax0.5% to 0.75% of 1% of the property’s equivalent value.Seller
Transfer Tax (BIR)0.5% to 0.75% of the sale price, and must be paid within two months or sixty (60) days from the date of execution of the deed.Seller
Registration Fees1% of the sale price, the zonal value, or the fair market value, whichever is higher.Buyer
Notary Fees1% – 2% of the sale price.Buyer

3. Who pays for the Transfer Title?

The buyer/new owner pays for the application for the Transfer of Certificate of Title (TCT) in the Registry of Deeds, which costs 0.25% of the sale price, plus a registration fee and notarization fee.

4. How long does it take to transfer the title of the property?

The transfer of title usually takes about two (2) to four (4) months. 

5. Is there anything else I should know about transferring property ownership in the Philippines?

On Restrictions on foreign ownership,

There are some restrictions on who can own property in the Philippines. Foreigners are not allowed to own land, but they can own condominium units and apartments in buildings that are at least 60% owned by Filipinos. They can also lease land for up to 50 years, with the option to renew for another 25 years.

On Value Added Tax,

The government has recently implemented a new policy, wherein value-added tax (VAT) is now levied on the sale of property in the Philippines. VAT is levied at 12% of the sale price. However, this tax may be exempt if the property is sold within one year from the date of acquisition, and if the seller is an individual.

On late payments, interests, and surcharges,

Property taxes in the Philippines are levied by the government on all real property, such as land and buildings. The tax is imposed on the owner of the property, and it is generally paid annually.

If you fail to pay your property tax bill on time, you may be subject to a late payment penalty. In some cases, you may also be required to pay interest on the unpaid amount. If you do not pay your property taxes at all, the government may eventually confiscate your property.

If you are looking to purchase or sell real estate in the country, it is important to understand the process and what requirements must be met. For more detailed information or assistance with transferring title, please contact a licensed real estate professional in your area or HousingInteractive.

LEAVE A REPLY

Please enter your comment!
Please enter your name here