This is the standard sharing of expenses between the buyer and the seller when transferring the real estate property title (TCT - Transfer Certificate of Title or CCT - Condominium Certificate of Title) to a new owner:
The SELLER pays for the:
- Capital Gains Tax equivalent to 6% of the selling price on the Deed of Sale or the zonal value, whichever is higher. (Withholding Tax if the seller is a corporation)
- Unpaid real estate taxes due (if any).
- Agent / Broker's commission.
- Documentary Stamp Tax - 1.5% of the selling price or zonal value or fair market value, which ever is higher.
- Transfer Tax - 0.5% of the selling price, or zonal value or fair market value, which ever is higher.
- Registration Fee - 0.25% of the selling price, or zonal value or fair market value, which ever is higher.
- Incidental and miscellaneous expenses incurred during the registrationprocess.
The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal transfer of real estate property ownership. The deed of sale is then taken to the Registry of Deeds to be officially recorded after paying the documentary stamp, transfer tax and registration fees. Always verify from the Registry of Deeds the authenticity of a Transfer Certificate of Title before buying a property. If the seller only has a tax declaration, be extra cautious and check with neighbours, the Barangay captain or anyone in the know in the community to verify the seller/owner's true identity and the property's history.
Your Agent / Broker will usually do the registration process (sometimes for a fee). However, all governmenttaxes, transfer fees and incidental or miscellaneous expenses will be shouldered by the buyer.
Documents needed when transferring the title (TCT or CCT) to the new owner:
- Certified true copy of the title
- Notarized copies of the Deed of Sale
- Latest tax declaration of the property
- Certificate from the Bureau of Internal Revenue that the capital gains tax and documentary stamps have been paid
- Receipt of payment of the transfer tax and registration fees