Disclaimer: The following discussion is provided for general informational purposes only and does not constitute legal advice. Procedures may vary depending on the specific circumstances and local government guidelines. It is always best to consult with an attorney or qualified professional for advice tailored to your situation.

Overview

In the Philippines, the sale or transfer of real property is subject to two key national taxes:

Capital Gains Tax (CGT) – Typically 6% of the highest value among the selling price, the zonal value, or the fair market value as determined by the Bureau of Internal Revenue (BIR).
Documentary Stamp Tax (DST) – Generally 1.5% of the same valuation basis used for CGT.

The seller is usually the one responsible for paying the CGT, while either the seller or the buyer may shoulder the DST, depending on the terms of the contract. Once these taxes have been paid, there are additional steps to complete in order to formalize the transfer of ownership and ensure the property records are updated.

Below is a comprehensive guide on what you need to know and do after paying the CGT and DST.

1. Obtain Proof of Payment and the Certificate Authorizing Registration (CAR/eCAR)

Secure the BIR Payment Forms
- After paying the Capital Gains Tax and Documentary Stamp Tax, you will receive official receipts, confirmations, and stamped BIR Forms. Keep these documents, as you will need them for the subsequent steps.
Request the Issuance of the CAR/eCAR
- The BIR will verify your documents, payment forms, and the details of the sale or transfer.
- Once verified, the BIR will issue a Certificate Authorizing Registration (CAR) or the electronic CAR (eCAR).
- The CAR/eCAR is an indispensable document needed to register the sale with the Registry of Deeds.
Check for Additional BIR Requirements
- Depending on the nature of the property or any special considerations (e.g., inherited property or special tax exemptions), the BIR may ask for additional documents such as proof of relationship, tax clearances, or other affidavits.
- Make sure these are submitted promptly to prevent processing delays.

2. Pay the Transfer Tax at the Local Treasurer’s Office

Once you have the CAR/eCAR in hand, the next step is to settle the Transfer Tax at the city or municipal treasurer’s office where the property is located. Details include:

What is Transfer Tax?
- This is a local tax (imposed by the local government unit or LGU) on the transfer of real property ownership.
- The rate varies per LGU but typically hovers around 0.50% to 0.75% of the property’s value, again based on whichever is higher among the selling price, the zonal value, or the fair market value.
Documents Needed for Transfer Tax Payment
- Original and photocopies of the CAR/eCAR from the BIR
- Official receipts and BIR payment forms for CGT and DST
- Notarized Deed of Absolute Sale or other sale documents
- Valid identification (government-issued IDs)
- Other documents required by the treasurer’s office (this may vary by locality)
Issuance of Transfer Tax Receipt
- After payment, you will receive a Transfer Tax Receipt (TTR).
- Keep the original receipt as it will be required by the Registry of Deeds.

3. Register the Sale with the Registry of Deeds

With your CAR/eCAR and Transfer Tax Receipt, you must then proceed to the Registry of Deeds (ROD) that has jurisdiction over the property. Registration of the sale is crucial for legal title transfer. Here’s how it typically works:

Present Documents at the Registry of Deeds
- CAR/eCAR from the BIR
- Transfer Tax Receipt from the local treasurer
- Original Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT), if it’s a condominium
- Notarized Deed of Absolute Sale (or Deed of Conveyance for other forms of transfer)
- Any other supporting documents (e.g., tax clearance, valid IDs, marriage certificate if property is conjugal, and so on)
Payment of Registration Fees
- The ROD will compute the registration fees based on the property’s declared value.
- Once paid, you will receive official receipts as evidence of your payment.
Processing and Issuance of New Title
- The ROD will process the documents and eventually cancel the old title to issue a new Transfer Certificate of Title (TCT) or CCT under the buyer’s name.
- Processing times can vary from a few days to several weeks depending on the workload at the ROD and the completeness of your documents.
Claim the New Title
- After processing, the ROD will inform you (or your representative) when the new title is ready for pickup.
- Review the new title to ensure the details (spelling of names, property details) are correct before leaving the ROD office.

4. Update the Tax Declaration at the Local Assessor’s Office

After you have the new title, the final step to completely align property records with the new ownership is to update the Tax Declaration at the local assessor’s office:

Secure the Required Documents
- Newly issued Transfer Certificate of Title (or CCT) from the ROD
- Deed of Sale (notarized copy)
- CAR/eCAR
- Official receipts for CGT, DST, and local transfer tax
- Your valid ID(s)
Apply for a New Tax Declaration
- Proceed to the local assessor’s office where the property is located.
- Fill out any application forms required for the transfer of the tax declaration.
Payment of Assessor’s Fees
- There may be minimal assessment fees.
- Fees vary but are generally modest compared to the taxes already paid.
Issuance of New Tax Declaration
- Once approved, the assessor’s office issues a new Tax Declaration under the name of the buyer (now the registered owner).
- This is important as it ensures that all future real property taxes (amilyar) will be properly recorded in the name of the new owner.

Practical Reminders

Timely Payment Avoids Penalties
- Capital Gains Tax must typically be paid within 30 days from the date of notarization of the Deed of Sale.
- Documentary Stamp Tax also has specific deadlines (usually on or before the fifth day of the month following the date of the transaction). Failing to pay on time can result in hefty penalties and surcharges.
Keep Multiple Copies of Key Documents
- Always keep both the original and certified true copies of important documents (Deed of Sale, new title, tax receipts, etc.).
- You may need these for future transactions, loan applications, or estate planning.
Coordinate With All Parties
- Ensure the buyer, seller, and relevant offices (BIR, Registry of Deeds, local treasurer, assessor) have consistent copies and details.
- Any discrepancy in names, addresses, or property details can delay registration.
Professional Assistance
- While buyers and sellers can manage these steps themselves, real estate transactions involve multiple offices and meticulous documentation.
- Engaging a lawyer, a licensed real estate broker, or a reputable liaison can help you avoid pitfalls.
Check for Liens or Encumbrances
- Before finally transferring, ensure that the property is free from liens, mortgages, or other encumbrances that could complicate or invalidate the transfer.
- This step should ideally be done before paying the CGT or finalizing the sale but is worth restating if any issues come up.

Conclusion

Paying the Capital Gains Tax and Documentary Stamp Tax is only part of the legal process for transferring real property in the Philippines. Obtaining the Certificate Authorizing Registration (CAR/eCAR), settling the Transfer Tax, registering the sale at the Registry of Deeds, and finally updating the Tax Declaration at the local assessor’s office are all critical steps. By diligently following these procedures—and ensuring that all documents and deadlines are properly handled—you can effect a smooth and valid transfer of property ownership under Philippine law.

If you have any uncertainties about these requirements or the process itself, consult with a licensed attorney or qualified real estate professional for guidance tailored to your specific transaction.