Procedures of Documenting and Registering a Real Estate Sale in the Philippines.

STEP 1: CITY/MUNICIPAL ASSESSOR’S OFFICE SECURE THE FOLLOWING:

 

1. Certified True Copy of Tax Declaration (House and Lot)

2. Certificate of No Improvement (If vacant lot)

3. Original Copies – 1 for BIR and 1 for Register of Deeds

 

STEP 2 : CITY/MUNICIPAL TREASURER’S OFFICE SECURE A TAX CLEARANCE

*In order to secure a Tax Clearance, Real Property Tax must be updated as of date of document of sale.

 

STEP 3: BUREAU OF INTERNAL REVENUE PAY THE FOLLOWING:

 

1. Capital Gains Tax (6% for individual seller or 7.5% for corporation)

2. Documentary Stamps Tax (1.5%)

 

Note:

*Capital Gains Tax and Documentary Stamps Tax shall be based on Selling Price (per Deed of Sale), Market Value of Tax Declaration, or BIR Zonal Value, whichever is higher.

*Form for Capital Gains Tax can be secured from the BIR or can be downloaded from the BIR website: http://www.bir.gov.ph

 

Requirements:

a. Photocopy of Certified True Copy of Transfer Certificate of Title

b. Certified True Copy of Latest Tax Declaration

c. Real Estate Tax Clearance

d. Original and two (2) Photocopies of Deed of Absolute Sale

e. Certificate of No Improvement from the Assessor’s Office if vacant lot.

 

Additional Note:

a. Payment for Capital Gains Tax and Documentary Stamps Tax shall be in cash or in managers check, to be paid to the BIR Regional office or BIR-authorized banks where property is located.

b. Capital Gains Tax shall be filed and paid to the BIR within thirty days from date of sale.

c. Documentary Stamps Tax shall be paid on or before the 5th day of succeeding month from the date of sale.

 

STEP 4: CITY/MUNICIPAL TREASURER’S OFFICE

Pay the Transfer Tax at the Treasurer’s Office.

Requirements:

 

a. Photocopy of Deed of Absolute Sale

b. Photocopy Transfer Certificate of Title

c. Photocopy of Tax Declaration

d. Photocopy of Real Estate Tax Clearance

 

*Transfer Fee is 1/2 of 1% of Selling Price or Market Value of Tax Declaration, whichever is higher

 

STEP 5: REGISTER OF DEEDS

Submit to the Register of Deeds where property is located the following documents:

 

a. Owner’s Duplicate Copy of Transfer Certificate of Title

b. Deed of Absolute Sale (3 copies)

c. Certificate Authorizing Registration from the BIR

d. Transfer Fee Receipt

e. Photocopy of Real Estate Tax Clearance

f. Photocopy of Tax Declaration or if vacant lot, Certificate of No Improvement

 

A NEW TITLE UNDER THE NEW OWNER’S NAME WILL BE RELEASED BY THE Registry of Deeds (RD).

 

REMINDER: The owner or the broker as authorized by the owner should be the one to present the above documents to the Register of Deeds because the new TCT shall be released only to the presenter of the above documents.

 

STEP 6: CITY/MUNICIPAL ASSESSOR’S OFFICE

 

Secure from the Assessor’s Office a new Tax Declaration.

Requirements:

a. Photocopy of Transfer Certificate of Title under the new owner’s name, duly authenticated at the Assessor’s Office

b. Photocopy of Deed of Absolute Sale

c. Real Estate Tax Clearance

 

NOTE:

You must always bring Certified True Copies of the documents as well as necessary receipts to avoid inconvenience in case you will be required to present them.

 

 

Balikbayan Buyers Guide for Philippine Properties

For our fellow balikbayan countrymen who have made their careers abroad but wish to invest in Philippine Properties, the first option is to apply for dual citizenship. Here’s how:

·         If you are in the Philippines, file a “Petition for Dual Citizenship and Issuance of Identification Certificate (IC) pursuant to RA 9225” at the Bureau of Immigration (BI) and for the cancellation of your alien certificate of registration.

·         Those who are not BI registered and overseas should file the petition at the nearest embassy or consulate.

Requirements:

·         Birth certificate authenticated my the National Statistics Office (birth certificate from the NSO can be requested online and mailed to you)

·         Accomplish and submit a “Petition for Dual Citizenship and Issuance of Identification Certificate (IC) pursuant to RA 9225” to a Philippine embassy, consulate or the Bureau of Immigration.

·         Pay a $50.00 processing fee, schedule and take an “Oath of Allegiance” before a consular officer.

·         The Bureau of Immigration in Manila receives the petition from the embassy or consular office. The BI issues and sends an Identification Certificate of citizenship to the embassy or consular office.

If a former Filipino who is now a naturalized citizen of a foreign country does not want to avail of the Dual Citizen Law, he or she can still acquire Philippine land based on BP (Batas Pambansa) 185  & RA (Republic Act) 8179 but limited to the following:

For Residential Use (BP 185 - enacted in March 1982):

·         Up to 1,000 square meters of residential land.

·         Up to one (1) hectare of agricultural of farm land.

For Business / Commercial Use (RA 8179 - amended the Foreign Investment act of 1991):

·         Up to 5,000 square meters of urban land.

·         Up to three (3) hectares of rural land.

In terms of investing in Philippine Condominiums, there is no limit as they would be purchasing them using a Condominium Certificate of Title (CCT).

 

 

Foreigner’s Guide to Philippine Real Estate

By law, foreigners don’t have the right to acquire Philippine land (there have been many proposals to amend this law but of this writing, it is unlikely to change). The simplest way for a foreigner to acquire Philippine real estate is to have a Filipino spouse purchase a property. Another alternative is having a Filipino partner when acquiring a property. The partner owns 51% or more and the remainder is owned by the foreigner. (Tip: The foreigner can have a blank deed of sale signed by the Filipino partner for security)

Exceptions:

Filipino citizens and corporations or partnerships that is at least 60% Philippine owned are entitled to acquire Philippine land. An exception to this rule, is foreign acquisition of a Philippine real estate in the following cases:

* Acquisition before the 1935 constitution.

* Acquisition thru hereditary succession if the foreign acquire is a legal or natural heir.
This means that when you are married to a Filipino citizen and your husband/wife dies, you as the natural heir will become the legal owner of his/her property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she is not a Filipino citizen.

* Purchase of not more than 40% interest in a Philippine condominium project.

* Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by law.  (natural born Filipinos who acquired foreign citizenship is entitled to own up to 1,000 sq.m. of residential land, and 1 hectare of agricultural or farm land)

* Filipinos who are married to aliens who retain their Filipino citizenship, unless by their act or omission they have renounced their Filipino citizenship.

Owning of houses or buildings is legal as long as the foreigner does not own the land on which the house is build.

Setting up a corporation with 40% of the stocks in the foreigner’s name and 60% to Filipinos is a good alternative. There must be a minimum of 5 stockholders, and foreigner can have the Filipino stockholders sign blank transfer of the stocks for security.

Rent

The land can be leased by the foreigner or a foreign corporation on a long term contract for an initial 50 year period and renewable every 25 years. A foreigner can rent a lot and at the same time legally own the house on the rented land.

Condominiums

The Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire Philippine condominiums and shares in condominium corporations up to not more than 40 % of the total and outstanding capital stock of a Filipino owned or controlled condominium corporation.

With this law, foreigners can own a Philippine house and lot as long as it has a corresponding condominium title to that property. There are very few single-detached homes or Townhouses in the Philippines with condominium titles. Most Philippine condominiums are high rise buildings.

If you wish to stay permanently in the Philippines or if you frequent the Philippines and stay for long periods. Avail of the government’s Special Resident Retirement Visa (SRRV).