Query: Is it mandatory to say "with improvement" in a deed of sale? With improvement or not, will the assessor's office check the place for a tax declaration certificate?

In the Philippines, when drafting a deed of sale for a property, it is important to accurately describe the property being sold. The inclusion of the phrase "with improvement" is not mandatory but can be significant depending on the specifics of the transaction.

Purpose of Indicating "With Improvement"

Clarity of Property Description: Including "with improvement" in the deed of sale clearly indicates that the property includes structures or enhancements, such as buildings, houses, or other permanent fixtures. This helps avoid any ambiguity about what is being transferred.
Assessment of Property Value: Improvements on the property typically increase its market value. Stating "with improvement" informs the buyer, seller, and the authorities about the full extent of the property’s value.
Tax Implications: The Bureau of Internal Revenue (BIR) and the local assessor's office use the information in the deed of sale to assess the correct taxes. Including improvements ensures that the assessed value reflects all aspects of the property, including any buildings or structures.

Tax Declaration Certificate and Assessor’s Office

Regardless of whether "with improvement" is explicitly stated in the deed of sale, the assessor's office will conduct an inspection to verify the details of the property. The assessor’s office aims to ensure that the tax declaration accurately reflects the property's current status.

Verification Process: The assessor's office will check for any existing improvements on the property. This verification is part of their standard procedure to update or issue a new tax declaration certificate, ensuring that property taxes are assessed correctly based on the property's current condition.
Tax Declaration Update: If improvements are found during the inspection that were not previously declared, the tax declaration will be updated to reflect these. This can result in a higher assessed value and potentially higher property taxes.

Legal Requirements in a Deed of Sale

Basic Information: The deed of sale must include the complete and accurate description of the property, names of the buyer and seller, the agreed purchase price, and the terms of payment.
Property Details: While not mandatory, it is prudent to include details about any improvements to provide a comprehensive description. This can prevent future disputes and ensure clarity for both parties and the authorities.
Legal Compliance: Ensure the deed of sale complies with local laws and regulations. It should be notarized to be legally binding and enforceable.

Conclusion

Including "with improvement" in the deed of sale is not a strict legal requirement, but it is advisable for clarity and accuracy in describing the property. The assessor's office will conduct an inspection to verify the property's details for tax purposes, regardless of whether improvements are explicitly mentioned. Accurate documentation in the deed of sale and cooperation with the assessor’s office will ensure proper assessment and taxation of the property.