Below is a comprehensive overview of the legal procedures, documentary requirements, and applicable taxes and fees when selling residential land in the Philippines. Please note that laws and regulations may be updated from time to time, and this article should not be taken as formal legal advice. It is always best to consult a licensed Philippine attorney or real estate professional for case-specific guidance.

1. Preliminary Considerations

1.1 Confirm Ownership and Title Status

Secure the Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT).
Ensure that the land title is authentic and in the seller’s name. If the land title is under the name of deceased parents or ancestors, an extrajudicial settlement or judicial settlement of estate may be required before proceeding with any sale.
Check for Liens and Encumbrances.
Obtain a certified true copy of the title from the Register of Deeds (ROD) and request a tax declaration from the local assessor’s office to confirm if there are any unpaid real property taxes or annotations such as mortgages, liens, or adverse claims.
Verify Zoning and Land Classification.
Ensure the property is classified as residential land under local zoning ordinances. If there is any classification discrepancy, it may affect the allowed usage and transfer process.

1.2 Property Valuation

Market Valuation.
Have the property appraised by a licensed real estate appraiser or consult prevailing market rates to set a fair selling price.
BIR Zonal Value.
The Bureau of Internal Revenue (BIR) publishes zonal values per location. In computing taxes, the BIR typically uses the higher of the selling price, zonal value, or fair market value as stated in the tax declaration.

2. The Sales Process

2.1 Negotiation and Documentation

Letter of Intent (LOI) or Offer to Buy (Optional).
The buyer may issue a written LOI expressing intent to purchase. This document typically outlines the proposed purchase price and basic terms.
Contract to Sell (Optional).
If the parties agree to a payment schedule or need time for financing, a Contract to Sell may be executed prior to the final Deed of Sale. It details the terms, payment schedule, and the seller’s obligation to transfer the title upon full payment.
Due Diligence.
The buyer usually performs due diligence to verify the title’s authenticity and the property’s physical condition. The seller should disclose any issues, such as unpaid taxes or boundary disputes.

2.2 Deed of Absolute Sale (DOAS)

Drafting the Deed of Absolute Sale.
This is the core legal document confirming the transfer of ownership from the seller to the buyer upon full payment. It must contain:
- Name and personal information of both seller and buyer
- Description of the property (title number, land area, boundaries)
- Purchase price and payment terms
- Warranties, terms, and conditions regarding the property’s free and clear status
Notarization.
Once finalized and signed, the DOAS must be notarized by a notary public in the Philippines. Notarization is essential to render the document a public instrument and valid for registration with government offices.

3. Taxes and Fees

3.1 Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT)

Capital Gains Tax (CGT).
For individual sellers of a capital asset (i.e., real property not used in business), the CGT is 6% of the gross selling price or the BIR zonal value, whichever is higher. This tax is typically paid by the seller.
Creditable Withholding Tax (CWT).
If the property is treated as an ordinary asset (e.g., used in business by a corporate entity or a property dealer), then a withholding tax may apply instead of CGT, typically ranging from 1.5% to 6% depending on certain conditions. This often applies to corporations or professional real estate dealers.
Deadline for Payment.
The CGT/CWT must be paid within 30 days from the date of notarization of the Deed of Absolute Sale. Delayed payment incurs penalties and interest.

3.2 Documentary Stamp Tax (DST)

Rate.
The Documentary Stamp Tax on real estate transactions is 1.5% of the gross selling price or zonal value, whichever is higher.
Who Pays.
The DST is commonly shouldered by the seller, unless the buyer and seller negotiate otherwise.
Deadline for Payment.
The DST must be paid within 5 days after the close of the month in which the taxable document (the notarized Deed of Absolute Sale) was made, signed, or issued.

3.3 Transfer Tax (Local Treasury Office)

Rate.
Local Government Units (LGUs) impose a transfer tax, generally up to 0.75% of the gross selling price or fair market value, whichever is higher. The actual rate varies by municipality or city.
Payment.
This tax is usually paid to the Local Treasurer’s Office where the property is located.
Deadline.
The transfer tax must be paid within a specified period (often 60 days from the date of execution of the DOAS or earlier) to avoid penalties.

3.4 Registration Fees (Register of Deeds)

Schedule of Fees.
The Register of Deeds charges registration fees based on a graduated schedule. This is often around 0.25% to 0.5% of the property value, subject to a standard table of fees.
Who Pays.
Typically, the buyer covers the registration fees, although this can vary based on negotiation.

3.5 Notarial Fees

Notarial Fees.
Notary fees can vary, ranging from a few thousand pesos up to 1% of the property value, although the amount is largely subject to agreement with the notary or based on the Notarial Fee Guidelines issued by local chapters of the Integrated Bar of the Philippines (IBP).

4. Transfer of Title

4.1 Steps to Transfer Title

Secure BIR Clearance (Certificate Authorizing Registration or CAR).
After paying the Capital Gains Tax (or CWT) and Documentary Stamp Tax, the BIR will issue a Certificate Authorizing Registration (CAR) or eCAR. This is evidence that taxes due on the sale have been paid.
Pay Transfer Tax at the Local Treasurer’s Office.
Present the notarized Deed of Absolute Sale, CAR/eCAR, tax declaration, and other required documents to the Local Treasurer’s Office to pay the transfer tax.
Register with the Register of Deeds (ROD).
Submit all the following documents to the ROD:
- Original Owner’s Duplicate Copy of the Title
- Notarized Deed of Absolute Sale
- CAR/eCAR from the BIR
- Transfer Tax Receipt/Certificate
- Proof of Payment of Registration Fees
- Latest Real Property Tax Clearance or Tax Declaration
  The ROD will issue a new Transfer Certificate of Title (TCT) in the buyer’s name once all fees are paid and documents are in order.
Obtain Updated Tax Declaration.
With the new TCT, the buyer should update the Tax Declaration with the local Assessor’s Office to reflect the new ownership and to ensure proper assessment of real property taxes.

4.2 Timeline

BIR processing can take a few weeks to several months, depending on the efficiency of the specific BIR office and the completeness of the documents.
ROD registration typically takes a few days to a few weeks, again depending on the locality.

5. Common Pitfalls and Practical Tips

Verify Property Boundaries.
If possible, secure a relocation survey by a licensed geodetic engineer to confirm boundaries and avoid overlaps or disputes.
Clear Unpaid Taxes and Fees.
All unpaid real property taxes and other dues must be settled. The Local Treasurer’s Office can issue a tax clearance certificate upon full payment.
Check Special Laws.
Some lands, particularly agricultural land, may have restrictions from the Department of Agrarian Reform (DAR). Ensure no DAR clearance is needed if the land was reclassified from agricultural to residential.
Foreign Ownership Restrictions.
In general, foreigners cannot own land in the Philippines. If a foreign party is involved, be mindful of the constitutional restrictions. They may own condominium units (subject to foreign ownership caps) or participate in land ownership through a Philippine corporation with at least 60% Filipino ownership.
Timely Payment of Taxes.
Failing to pay CGT/CWT, DST, or local transfer tax on time will result in surcharges, penalties, and interest, which can substantially increase total transaction costs.
Professional Assistance.
Working with a licensed real estate broker or lawyer can streamline the process, help in preparing correct documentation, and ensure compliance with Philippine laws.

6. Typical Cost Allocation (Seller vs. Buyer)

Though negotiable, the following is the commonly accepted practice in the Philippines:

Seller’s Usual Responsibilities
- Capital Gains Tax (6%) or CWT
- Documentary Stamp Tax (1.5%)
- Notarial fees (sometimes split 50-50 or fully by seller)
- Real property taxes up to the date of sale
Buyer’s Usual Responsibilities
- Transfer tax (up to 0.75% depending on LGU)
- Registration fees (Register of Deeds)
- Miscellaneous fees (handling, processing, professional fees for brokers or lawyers)

Of course, the parties are free to deviate from these standard allocations based on mutual agreement.

7. Summary of Key Steps

Prepare the Property for Sale
- Check and gather title documents
- Settle any outstanding obligations
Negotiate and Execute the Deed of Absolute Sale
- Draft the Deed with clear terms
- Notarize the Deed of Sale
Pay Taxes and Secure Clearances
- Pay Capital Gains Tax (or CWT) and Documentary Stamp Tax at BIR
- Obtain Certificate Authorizing Registration (CAR)
- Pay local transfer tax
Register the Sale and Transfer Title
- Register the Deed of Sale at the Register of Deeds
- Obtain new Transfer Certificate of Title in the buyer’s name
- Update tax declaration with the local assessor
Fulfill Post-Transfer Obligations
- Seller accounts for any outstanding tax obligations
- Buyer begins payment of future real property taxes

Conclusion

Selling residential land in the Philippines involves understanding a variety of legal procedures, tax obligations, and administrative steps. Having an accurate and authentic title, fulfilling tax requirements on time, and ensuring properly executed documentation will minimize delays and liabilities. Always consult a licensed real estate attorney or experienced broker to stay current with evolving regulations and to ensure a smooth and legally compliant transaction.