Transferring tax declaration of improvements (2024)

Planning to buy a property in the Philippines is no easy feat. It involves a complicated process of land title transfer from the seller’s name to the buyer’s name.

This is important, especially to a new owner, to ensure the ownership and tax responsibilities are properly transferred. The issuance of a new title in the Philippines under your name will be proof of your ownership. The absence of such will render your ownership questionable and you might face problems as you move forward. The Philippines has specific regulations for transferring ownership of land and its improvements, and it’s essential to follow them to avoid any legal issues.

In this article, we will understand how important updating tax declarations and the process of transfer of land title is. From preparing the necessary documents to submitting them to the appropriate government agencies, we’ll cover everything you need to know to make the transfer of ownership process smooth and successful. So, whether you’re planning to buy or sell a property, read on to learn how to navigate the transfer of tax declaration for land improvements in the Philippines.

Step-by-step guide on how to transfer land titles

1. To complete the registration of the title and provide proof of ownership, the same must be under your name. Here is the process of transfer of title
   1. Secure the documentary requirements at the Bureau of Internal Revenue Regional District Office (BIR RDO)Here lists the documents you need to file:
      • Original copy of the notarized Deed of Conveyance/ Deed of Absolute Sale (DOAS)
        Both parties, the seller and the buyer, must have a meeting of the minds and have executed a document to effect the conveyance of the property
      • Owners duplicate copy of Transfer Certificate of Title (TCT) or the Condominium Certificate of Title (CCT)
      • Certified True Copies of the latest Tax Declaration for land and improvement of the real property
      • Tax Identification Numbers (TIN) of the seller and buyer
   2. Secure assessment of transfer taxes at the BIR and Authorized Agent Bank (AAB) or Municipal or City Treasurer’s OfficeA BIR representative will calculate your Capital Gains Tax and Documentary Stamp Tax
   3. File documents at the BIR for issuance of CAR or BIR Clearance
   4. Pay Transfer Taxes and secure the Tax clearance at the Local Treasurer’s Office where property is locatedHere are the documents you need to produce for the issuance of the Tax Clearance:
      • Original and one photocopy of the DOAS
      • Photocopy of the Tax Declaration
      • Official Receipt of Payment of Real Property Tax and Special Education Fund Tax for the current year
      • Certified True Copy of TCT or CCT
      • Original Copy of the CAR
   5. gFile documents at the Registry of Deeds for the issuance of new land title
      • Original Copy of the Deed of Sale or Deed of Absolute Sale stamped as received by the BIR, plus three photocopies
      • Seller’s Owner’s Duplicate Copy of the TCT or CCT
      • Original Copy of the CAR
      • Original Copy of the Tax Clearance
      • Original Copies of Official Receipts of Payments of CGT, DST, Tax Clearance Certificate, and Transfer Fee
      • Original Copies of the Current Tax Declaration for land and improvement issued by the local assessor’s office
      • If the seller or buyer is a corporation, submit the following requirements: (a) Secretary’s Certificate authorizing the sale of the real property; and (b) Certified True Copy of the Articles of Incorporation and By-Laws of the seller or buyer corporation
   6. File documents at the Municipal or Provincial Assessor’s Office for the issuance of new Tax DeclarationFor the release of the new Tax Declaration, you need to present the following documents:
      • Photocopy of the Deed of Absolute Sale
      • Certified True Copy of the TCT or the CCT
      • Photocopy of the CAR
      • Photocopy of the Transfer Tax Receipt
      • Photocopy of the latest Real Property Tax or Tax Clearance

      Other additional documents:

      • Subdivision Plan if lot is subdivided; and
      • Full-color photos of the house, lot, or condominium unit.

   Note that a Special Power of Attorney (SPA) to process the title transfer which shall be signed by the seller is required if someone else shall process your title transfer.

   In case of registered land and/or improvements, one (1) eCAR shall be issued per title. Thus, in practice, even if there are separate tax declarations covering the improvements on registered lands, only one (1) eCAR will be issued. The RD shall inscribe on the newly issued Transfer Certificate of Title the eCAR number, date of issuance of eCAR, RDO number, and amount and date of payment per tax type.

Understanding the Importance of Updating Tax Declarations

Updating tax declarations is a crucial aspect of land or property ownership in the Philippines. It serves as a legal document that reflects the current status of a property, including its classification, assessed value, and ownership details. Failure to update tax declarations can result in discrepancies that may lead to legal issues or financial penalties.

By ensuring that tax declarations are regularly updated, property owners can maintain accurate records that reflect the true value and nature of their property. This process is essential for taxation purposes, as the assessed value of a property determines the amount of real property tax that needs to be paid.

Moreover, updated tax declarations provide transparency and clarity regarding the ownership and status of a property. This can be particularly important in cases of inheritance, transfer of ownership, or disputes, as an accurate tax declaration serves as an official record that can help resolve issues efficiently.

Overall, understanding the importance of updating tax declarations is key to ensuring compliance with regulations, protecting property rights, and avoiding unnecessary complications in property transactions. By staying proactive in keeping tax declarations current, property owners can navigate the intricacies of land title in the Philippines more effectively.

Need further information and assistance in Transferring Tax Declaration of Improvements? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+63) 917 149 2337 or send an email to info@filedocsphil.com for more information.