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Deed of Absolute Sale
Today, I would share my experiences on the processing of title ownership thru sale.
When a buyer and a seller agree to complete a sale, there is now a need to execute a Deed of Absolute Sale.
Deed of Absolute Sale template attach for your reference, just click the link below to view:
However, don't forget to check the authenticity of the property being sold, if it is really existing and if the seller really is the real owner and if there are any encumbrances on the title. How are we going to do that?
Authenticity check
Request the following documents related to the property:
1. Certified true copy of title
You can get this from any computerized Register of Deeds branch near you. This will spare you of travel inconvenience in case the Register of Deeds branch where your property is located is far from you/your residence. Remember to check if there is any lien or encumbrance at the back of the title. The title should be clean, that is..free from any liens or encumbrances.
2. Certified true copy of current tax declaration
You can get this from the assessor's office where your property is located.
3. Tax clearance
Also from the assessor's office to check if the property is updated in realty taxes.
4. Identification cards (ID) of the owner/s. Their names must appear in the certified copy of title and tax declaration.
Please take note, identification cards must be those government issued.
Deed of Sale and BIR submission
Once the sale is completed, you may now proceed to the Bureau of Internal Revenue (BIR) branch who has jurisdiction on the property for the evaluation and computation of the taxes related to the sale. These are:
Documentary stamps tax
Capital gains tax
Capital gain tax
This is 6% of the amount whichever is higher of the following:
- Deed of Sale amount
- Market value- found on the tax declaration
- BIR zonal value- you can check or secure a copy of the zonal value from the BIR
The one with the highest amount will be BIR's basis of the computation of the capital gain tax.
Documentary stamps
This is 1.5% of the following: sale amount, market value, or zonal value, whichever is higher, as discussed above under capital gain tax.
With those information, we will now gather the requirements for BIR to evaluate and compute the taxes above stated, the capital gain tax and the documentary stamp tax.
BIR requirements are:
- Notarized Deed of Absolute Sale
- Certified true copy of title
- Certified true copy of tax declaration
- Tin# of buyer and seller- fill up form 1904 at the BIR to verify the TIN nos of both parties. Make sure you have the birthdays of both parties.
- Certificate of no improvement and sworn declaration- get this from the assessor's office, to vouch that the land has no building on it, if it is a lot sale only.
After verifying the TIN nos thru the 1904 BIR form, you can now have your documents checked and evaluated by the BIR officer of the day, ONETT section.
** Take note, status is very important, deed of sale must reflect accurate status of buyer and seller.
If the documents submitted has no issues, probably in 2 weeks time, the eCAR (certificate authorizing registration) will be released from BIR and you are now ready to have the title transferred and registered to the new owner.
Update: due to the Pandemic, eCAR release would take longer. GOV'T OFFICES usually are on skeletal work force.
The Transfer tax
After release of eCAR (certificate authorizing registration), pay the transfer tax at the treasurer's office of the municipality/city where the property is situated. Present the documents released from BIR including the eCAR. The transfer tax is 1/2 of 1% of the Deed of Sale amount. Then proceed to the Register of Deeds for the registration of the sale.
Documents to be submitted to the Register of Deeds:
1. eCAR and all attachments from BIR including the Deed of Sale
2. certified true copy of tax declaration
3. Tax clearance
4. IDs of buyer and seller with xeroxed copies
5.Original/ Owner's copy of title
6. Payment of the transfer tax
Here is the link from Land Registration Authority website for information on land registration. You will find this very useful.
Please click the link below for more information.
From my experience, registration of title from the Register of Deeds now a days takes longer time. May be due to the pandemic. Anyway, they will give a contact number for follow ups.
This would be all for now. I hope I am able to share with you useful information.
In case you have some questions, email me at: anchiebalita@gmail.com or thru my messenger: anchi balita
God bless everyone! 🙏
DISCLAIMER:
All information stated on the Site is based on the actual experiences and researches of the author at the time of posting. This is not intended as a substitute for professional advise. Information has been verified correct to the best of her knowledge, however, she cannot guarantee that there are no mistakes or errors. Rules and policies of government agencies mentioned on the blog may change without further notice.
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