Land Title Transfer Process in Makati

Land Title Transfer Process in Makati City, Philippines: A Comprehensive Legal Overview

Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. Laws, regulations, and specific processes may change over time or vary depending on individual circumstances. For detailed assistance, consult an attorney or directly contact the relevant government offices.

I. Introduction

The transfer of land titles in the Philippines is primarily governed by the Property Registration Decree (Presidential Decree No. 1529) and various laws and regulations promulgated by the Bureau of Internal Revenue (BIR), the Land Registration Authority (LRA), and local government units. In Makati City—widely regarded as the country’s major financial and business hub—there may be certain localized procedures and fees that property owners, buyers, and investors should be aware of.

This comprehensive guide outlines the critical steps, legal requirements, and key considerations for anyone seeking to transfer a land title within Makati City.

II. Preliminary Considerations

  1. Verify the Authenticity of the Title

    • Before initiating any sale or transfer, it is crucial to verify the authenticity of the original title.
    • Conduct a Title Verification at the Registry of Deeds (ROD) in Makati or through the Land Registration Authority’s online systems (if applicable). This ensures that the title is free of encumbrances, liens, or adverse claims.

  2. Check for Real Property Tax Obligations

    • The seller (or current owner) should ensure that all real property taxes (RPT) in Makati are up to date.
    • Securing a Tax Clearance Certificate from the Makati City Treasurer’s Office is typically required before the transfer process can proceed.

  3. Ascertain Zoning and Land Use Regulations

    • For properties located in Makati, check local zoning ordinances or consult with the Makati City Planning and Development Office if you plan any changes in land use.

III. Execution of the Deed of Absolute Sale (or Other Conveyance Documents)

  1. Preparation of the Deed

    • The Deed of Absolute Sale (DOAS) is the principal document that facilitates the conveyance of ownership from seller to buyer.
    • A lawyer or a licensed notary public typically drafts the deed, ensuring it complies with Philippine legal requirements (e.g., identity of parties, description of the property, purchase price).

  2. Notarization of the Deed

    • The DOAS must be executed and notarized to become a public instrument.
    • Notarization is critical; it provides an added layer of legal protection and makes the document admissible in court without further proof of authenticity.

  3. Supporting Documents

    • Owner’s Duplicate Certificate (ODC) of Title (Transfer Certificate of Title [TCT] for land or Condominium Certificate of Title [CCT] for condominium units)
    • Valid government-issued IDs of seller(s) and buyer(s)
    • Tax Identification Numbers (TIN) of seller(s) and buyer(s)
    • Spousal consent (if married) or other relevant marital documents, if applicable
    • Corporate documents if either party is a corporation (e.g., Board Resolution, Secretary’s Certificate)

IV. Payment of Required Taxes and Fees

Once the Deed of Absolute Sale is notarized, several taxes and fees must be settled. The timelines and procedures are prescribed by law; failure to comply can result in penalties.

1. Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT)

  • Capital Gains Tax (CGT) at 6% of the gross selling price or the zonal value (whichever is higher) typically applies when the seller is an individual and the property is a capital asset (usually real property not used in business).
  • Creditable Withholding Tax (CWT) may apply instead if the seller is engaged in the real estate business or if specific BIR regulations so require. Rates may vary depending on the classification of the property and the seller’s status.

Where to Pay:

  • The Authorized Agent Bank (AAB) for the BIR district that has jurisdiction over Makati. Usually, Makati falls under BIR Revenue District Office (RDO) No. 47 or 50 (depending on the property’s location).
  • Ensure you meet the 30-day deadline from the date of notarization of the deed to avoid penalties and surcharges.

2. Documentary Stamp Tax (DST)

  • DST is generally 1.5% of the gross selling price or zonal value, whichever is higher.
  • Payment is also done at the BIR’s AAB together with the Capital Gains Tax (or CWT).
  • Similarly, DST must be settled within 5 days after the close of the month when the deed was notarized (or within the 30-day window if filed simultaneously with CGT).

3. Transfer Tax (Local Treasury)

  • After paying CGT/CWT and DST, secure the Certificate Authorizing Registration (CAR) or eCAR from the BIR.
  • Proceed to the Makati City Treasurer’s Office to pay the transfer tax, which is usually a small percentage (around 0.50% to 0.75%) of the property’s gross selling price or fair market value, whichever is higher.
  • Present the CAR, notarized Deed of Sale, and other required documents to facilitate the assessment and payment of the transfer tax.

4. Other Fees and Charges

  • Notarial fees depend on the agreed-upon rate with the notary public.
  • Registration fees at the Registry of Deeds are computed based on a schedule of fees under the Land Registration Authority.

V. Processing the Certificate Authorizing Registration (CAR) from the BIR

  1. Submission of Documents

    • File the following with the appropriate BIR RDO (usually RDO 47 or RDO 50 for Makati properties):
      • Original and photocopies of the notarized Deed of Sale
      • BIR Form 1706 (for CGT) or BIR Form 1606 (for CWT)
      • BIR Form 2000-OT (for Documentary Stamp Tax)
      • Proof of payment (Official Receipts/Deposit Slips from the AAB)
      • Photocopies of TIN IDs of seller(s) and buyer(s)
      • Owner’s Duplicate Certificate of Title (for reference)
      • Additional documents as required (e.g., Tax Declaration, Vicinity Map, etc.)

  2. Issuance of the CAR or eCAR

    • Once the BIR verifies that all taxes have been paid, it issues a Certificate Authorizing Registration (CAR) or electronic Certificate Authorizing Registration (eCAR).
    • This document authorizes the Registry of Deeds to proceed with the transfer of title.

VI. Registration at the Registry of Deeds (ROD) – Makati City

  1. Present the CAR/eCAR and Deed of Sale

    • Submit the original notarized Deed of Sale, the Owner’s Duplicate Certificate of Title, and the CAR/eCAR to the Makati Registry of Deeds.
    • Additional documents may be required (e.g., tax clearance, updated Tax Declaration, valid IDs).

  2. Payment of Registration Fees

    • The ROD will compute the registration fees based on the value of the property.
    • Secure the official receipt and comply with any other instructions from the ROD.

  3. Issuance of a New Transfer Certificate of Title (TCT)

    • After successful registration, the ROD cancels the seller’s TCT (or CCT if condominium) and issues a new TCT (or CCT) under the buyer’s name.
    • The original copy of the new Title remains on file with the ROD, while the new Owner’s Duplicate Certificate is released to the buyer.

VII. Updating Records with the Makati City Assessor’s Office

  1. New Tax Declaration

    • With the newly issued TCT/CCT, proceed to the Makati City Assessor’s Office to request a new Tax Declaration in the buyer’s name.
    • Submit copies of the new title, the Deed of Sale, the CAR/eCAR, and proof of payment of transfer tax.
    • The Assessor’s Office will update the property records and issue a new Tax Declaration for real property tax purposes.

  2. Ensure Real Property Tax (RPT) Billings Are Correct

    • After updating the tax declaration, verify that the new assessments and official records reflect the correct ownership and property classification.
    • Future real property tax billings will now be in the name of the new owner.

VIII. Special Scenarios

  1. Condominium Units

    • For condominiums, the process is similar, except the title is a Condominium Certificate of Title (CCT).
    • Check if the condominium corporation requires clearance certificates or updated dues statements before issuing a “Condominium Unit Clearance” required by some developers/HOAs.

  2. Inheritance or Donation

    • If the transfer is due to inheritance (extrajudicial settlement) or donation, additional taxes (Estate Tax, Donor’s Tax) and documents (e.g., Extrajudicial Settlement of Estate, proof of relationship, etc.) may be required.
    • The standard procedure of obtaining the CAR/eCAR from the BIR and registering at the ROD still applies.

  3. Corporate-owned Properties

    • Transfers involving corporations require board resolutions, secretary’s certificates, and updated General Information Sheets (GIS).
    • Additional documentary requirements may be imposed by the BIR and the ROD.

  4. Judicial or Extra-Judicial Settlements

    • Properties passing through court-approved sales or partition may need court orders and certified true copies of decisions or final orders.

IX. Timelines and Practical Tips

  1. Adhere to Payment Deadlines

    • BIR taxes (CGT/CWT and DST) must be paid within 30 days from notarization (CGT/CWT) and within 5 days after the close of the month of notarization (DST). Often, these are paid simultaneously. Delays incur penalties, surcharges, and interest.

  2. Keep Multiple Copies of Documents

    • The BIR, ROD, and Assessor’s Office often require multiple sets of documents (photocopies). Having extra notarized copies of the Deed of Sale and supporting documents will speed up the process.

  3. Follow Makati City-Specific Guidelines

    • Makati City offices may have their own rules on scheduling, online queue systems, or specific forms.
    • Check the official Makati City government website or contact the offices directly for the most up-to-date guidelines.

  4. Professional Assistance

    • Engaging a licensed real estate broker or lawyer can help expedite the process and ensure compliance with all legal requirements.
    • While it is possible to do the steps on your own, professional advice can help avoid costly mistakes or delays.

X. Conclusion

Transferring a land title in Makati City follows the general regulations applicable across the Philippines, with a few nuances specific to local government requirements. Key steps include:

  1. Verifying the authenticity of the title
  2. Executing a properly notarized Deed of Sale
  3. Paying the correct taxes on time (CGT/CWT, DST, Transfer Tax)
  4. Securing a Certificate Authorizing Registration (CAR/eCAR) from the BIR
  5. Registering the transaction at the Makati Registry of Deeds
  6. Updating the Tax Declaration at the Makati City Assessor’s Office

By diligently following these procedures, both buyers and sellers can ensure a legally secure and efficient transfer of property rights. Always consult with legal professionals or the appropriate government offices if uncertainties arise, as Philippine real estate laws and local government processes can evolve over time.

References and Relevant Laws

  • Presidential Decree No. 1529 (Property Registration Decree)
  • National Internal Revenue Code of 1997, as amended (governing capital gains tax, donor’s tax, estate tax, etc.)
  • Bureau of Internal Revenue (BIR) Revenue Regulations
  • Local Government Code of 1991 (for local taxation)
  • Makati City Ordinances related to local real estate transactions and transfer tax rates
  • Land Registration Authority (LRA) Circulars and Guidelines

For the most current and accurate information, always verify directly with the BIR, the Makati Registry of Deeds, and the Makati City Assessor’s Office.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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