PH Real Estate - For Buyers in the Philippines: Legal Procedures Required When Transferring Land and Apartment Titles

If you have purchased a land or an apartment in the Philippines, you ought to know the proper, legal procedures to acquire the title of the property, and to make your purchase binding and legitimate. Unless you are able to accomplish these procedures, your ownership would be questionable and your sales agreement can be considered null and void.

What are these legal procedures?

#1 – A sales agreement is made between you and the owner

This agreement can be the sale of an apartment or a piece of land. Whether the agreement is written down or orally done, it is not binding until all the steps listed here are accomplished.

#2 – A lawyer prepares a Deed of Absolute Sale (DoAS)

You can consult your personal lawyer or any competent lawyer to do it, provided they are legitimate and licensed. After the lawyer has prepared the DoAS, go over it carefully before affixing your signature.

#3 – Let the DoAS be notarized

Documents must be notarized to make them legal and official. The lawyer can notarize the document, if he’s also a Notary Public. If not, you can let it be notarized by someone who is licensed to do it.

#4 – The Land Tax Declaration (LTD) is obtained from the Bureau of Internal Revenue (BIR)

This Land Tax Declaration is important because it will prove that the property is not remiss in its tax payments. In cases when there are overdue taxes, the owner should settle them first before you buy the property.

Don’t agree to pay the property, unless all the old accounts are in order. You might regret it later on. 

In this step, you have to obtain your own LTD because you are now the new owner. 

#5 – The LTD is submitted to the Assessor’s Office

You have to submit the LTD to the City’s or Municipal’s Assessor’s Office for assessment. This would guarantee also that the property is clean and has no encumbrances. 

#5 – You pay the real estate tax

This is the existing tax and not the overdue taxes on the property. You have to pay when you purchase the land, because you’re now the new owner of that property. Payment is made through the City’s or Municipal’s Treasurer’s Office. The official receipt would further prove your ownership of the real estate property.

#6 – The market value of the property is assessed

This process is accomplished by the City’s or Municipal’s Assessor’s Office. This can be a basis of the true value of the property that you have purchased. 

This process can be done, unofficially, before the purchase, if you have a private assessor who can do it. This will give you an idea if the property was priced correctly.

#7 – You pay the Transfer Tax

You will then pay the Transfer Tax to the Assessor’s Office. Make sure that all payments you have made are duly received with corresponding BIR stamped, official receipts.

You have to be ready with your payments because as the new owner, you are responsible now for your own property.

#8 – You pay the Capital Gains Tax and Documentary Stamp tax

So, you have several things to pay: the Real Estate Tax, the Transfer Tax, the Capital Gains Tax and the Documentary Stamp Tax; the two, last listed tax will be paid to the Bureau of Internal Revenue (BIR). 

Again, double check that you have been issued official receipts for all your payments. You don’t have proof that you paid the taxes unless you have the official receipts as evidences.

#9 – The old title is canceled by the Registry of Deeds (RD)

Hence, the name of the previous owner will no longer appear when someone inquires about the property in the Registry of Deeds. The old title is canceled and you are now the new owner of the property.

#10 – A new title is issued in your name

A new land title or apartment title is issued in your name, as the new owner. The Registry of Deeds is responsible in issuing a new title. Congratulations! But wait, there are two more legal steps that you should do.

#11 – Obtain a photocopy of your new title

Never submit your original copies to any agency or to anyone, unless you have already sold the property. Hence, you need to obtain a duly certified photocopy of your new title. Make certain that the copies are clear and legible. 

If they are not, then you have to inform them, so they can issue clear copies. Don’t leave the office until your copies are good enough.

#12 – You can now obtain a tax declaration from the Assessor’s Office

This is the last step that you should accomplish. This tax declaration will further verify that you own the property - without doubt. So, keep those documents under lock and key, or in a safety deposit box that you can access promptly.

These are all the legal procedures that you are required to accomplish when buying a piece of land or an apartment. Make sure you do every step, or you will end up losing the title of your real estate property, or the property itself.

Tips in doing these legal processes

• Request assistance if you are not sure of any information. You can ask the staff of the department concerned.
  
  
• Never sign anything you don’t fully understand.
  
  
• All your receipts should be BIR-stamped.
  
  
• Don’t be scammed by fixers in any of the offices. The government considers it illegal to enlist their services.
  
  
• You may want a lawyer or someone knowledgeable on Philippine laws to accompany you.
  
  
• You should know the contact number of the owner, so you can contact him quickly when problem about the property arises.
  
  
• If possible, you ought to accomplish all these processes within a day to ascertain that you have everything in order.
  
  
• Relax and keep your wits about you when filling out the documents, because one mistake can cost the loss of your property. 

You are now a proud owner of a real estate property. Relish the feeling and joy of having something you can call your own.

Tags:    legal procedures in ownership transfer of a property