Posts Tagged ‘ topic: transfer of property ’

How to Transfer Property and Tax Registration in Paranaque

So the jig is up! This is what has been preoccupying my time since late March/early April, up to present, while waiting for the bar exam results. I was asked to assist in the transfer of property [by simple sale], particularly a piece of land situated in Paranaque. I thought it would be helpful to others to chronicle my [mis]adventures, so… the following is a simplified, step-by-step guide, based on personal experience, on what to do [and NOT to do] when transferring registration of land in Paranaque, from the buyer’s point of view.


STEP 0: DEALING WITH THE SELLER

  • Document: Certified True Copy of the TCT/OCT, 1 copy [P273.35, from the Registry of Deeds]

When you have decided to purchase a parcel of land, take the steps to make sure of the authenticity of the seller’s offer. If you can, visit the property’s location to see if the property does exist, ask around the area about the owner of the property. At the least, ask the seller for a Certified True Copy of the Original Certificate of Title / Transfer Certificate of Title, also referred to as the “Blue Copy” [because the paper is literally blue]. This document will give you very useful details, such as name and address of the registered owner, location of the property, all the annotations on the title [mortgages, encumbrances, judgments involving the property, the like]. It will also tell you how recently the copy was requested and released by the Registry of Deeds, so you can be assured of its accuracy. You can countercheck with the LRA website if they did release such a copy by using the control number.


STEP 1: PREPARATION OF DOCUMENTS

  • Document: Notarized Deed of Sale, at least 4 Original Copies
  • Document: Notarized Affidavit of No Improvement, 1 Original Copy

Then comes the preparation of the Deed of Sale. It is definitely better to have a professional prepare these documents for you, but of course you can also prepare them yourself. If the property is only a piece of land, with no buildings or other improvements on it, you also have to prepare an Affidavit of No Improvement. Have all these notarized.

As for the Deed of Sale, 1 Original Copy will be submitted to the BIR, 1 Original copy should be retained by the Seller, and at least 2 Original Copies should be retained by the Buyer.

  • Document: Acknowledgment Receipt, at least 4 Original Copies

Have both Seller and Buyer sign an Acknowledgment Receipt, stating the amount received, and the property for which it was given. This does not need to be notarized.

As with the Deed of Sale, 1 Original Copy will be submitted to the BIR, 1 Original copy should be retained by the Seller, and at least 2 Original Copies should be retained by the Buyer.

  • Document: Latest Tax Receipt, 1 Original Copy from the seller, make at least 1 photocopy

Ask the Seller to provide you the receipt of the latest tax payment made. You will know from this if the realty tax payment is up to date, how much you would need to pay to get a tax clearance, if any is needed.

  • Document: Original Owner’s Duplicate of the Title

Ask the Seller to give you the owner’s duplicate. This is not the Blue Copy, but the actual OCT/TCT in the seller’s possession.

  • Document: Photocopy of Buyer’s and Seller’s IDs, at least 5 copies

Prepare at least 5 photocopies of both Seller’s and Buyer’s VALID IDs. This includes driver’s license, SSS, GSIS, passport, TIN, and other government-issued IDs.


STEP 2: OBTAINING DOCUMENTS FROM THE CITY HALL

  • Document: Certified True Copy of Latest Tax Declaration, at least 2 Copies [P50.00 each, from the City Assessor’s Office], make at least 2 photocopies

The Seller can request these documents himself, or he can give the Buyer an authorization letter, so the Buyer can acquire it in his stead. One copy will be retained by the BIR when you apply for a Certificate Authorizing Registration [CAR], and one copy will be for the Registry of Deeds, when you have your property registration transferred.

If the Seller chooses to let the Buyer obtain the copy, the Buyer will need the following:

  • An authorization letter signed by the Seller / Registered Owner [also called a Letter Request]
  • 1 photocopy of a valid ID of the Buyer / Requesting Party [from Step 1]
  • 1 photocopy of the OCT/TCT, or the Tax Declaration, or a Tax Receipt

This will only take 30-45 minutes. No need to come back on another day, you can just stay in the very spacious Assessor’s Lounge while watching TV.

  • Document: Certificate of No Improvement, 1 Copy [P50.00 each, from the City Assessor’s Office], make at least 2 photocopies

If the property is only a parcel of land, with no buildings or improvements, you have to obtain a Certificate of No Improvement. You will need the following:

  • Notarized Affidavit of No Improvement [See Step 1]
  • 1 photocopy of a valid ID of the Buyer / Requesting Party [See Step 1]
  • 1 photocopy of the Latest Tax Declaration [See previous part]

After receiving the certified true copy of the tax declaration in the previous part, you can already request for the certificate of no improvement. This will take at least 1 day, so you have to come back on the next business day.


STEP 3: OBTAINING THE CERTIFICATE AUTHORIZING REGISTRATION [CAR]

The BIR RDO in Paranaque is along Dr. A. Santos Avenue, about a stone’s throw away from Paranaque National High School [or Olivarez College, if you’re more familiar with that]. The person in charge of queuing people will ask you what your business is:

  • If either or both Seller and Buyer don’t have a TIN yet, tell them you need to obtain a TIN for a sale of land. They will give you BIR Form 1904.
  • If either or both DO have a TIN, but don’t have a pre-filled Form 1904 yet, ask for a Form 1904, fill it up, and then tell them you’re there to obtain a CAR.
  • If both Seller and Buyer already have a TIN AND a pre-filled Form 1904, you should tell them you’re trying to get a CAR, or that you’re paying Capital Gains Tax. They will direct you to an ONETT Officer.

In our case, the buyer had no TIN yet, so we obtained a TIN first, and then proceeded to ONETT Officer’s desk.

  • Document: TIN of Seller and Buyer, 1 Original Copy [from the BIR RDO]

The Seller in this particular transaction already had a 1904 pre-filled, and just gave it to us, which was perfectly ok. The officer you will talk to during the CAR application will direct you to have the 1904 confirmed by “Noel”, [presumably] the man behind the CAR Releasing Desk. He will check the TIN on his computer, and sign his initial on it.

  • Document: Notarized Deed of Sale, 1 Original Copy [From Step 1]
  • Document: Certified True Copy of OCT/TCT, aka Blue Copy [From Step 0]
  • Document: Certificate of No Improvement, 1 Original Copy [From Step 2]
  • Document: Certified True Copy of the Latest Tax Declaration, 1 copy [From Step 2]
  • Document: Acknowledgment Receipt, 1 Original Copy [From Step 1]

The ONETT Officer will assess the all the documents, and then will prepare a computation of the Capital Gains Tax, Documentary Stamp Tax, and Certification Fee. You will be given an ONETT Computation Sheet, which will provide the amounts to be paid, the deadlines, and the subsequent forms you will need to fill out.


STEP 4: PAYING YOUR TAXES C/O BIR

The ONETT Officer will direct you to pay your taxes to whichever bank accepts tax payments, within the jurisdiction of the RDO. In our case, the property is located in Paranaque, so the RDO is Paranaque [RDO 52]. BUT BEFORE YOU PROCEED TO THE BANK, you must fill up three forms first, through eBIRForms [see BIR website].

  • Document: eBIR Form 1706, Capital Gains Tax, print 4 copies
  • Document: eBIR Form 2000-OT, Documentary Stamp Tax, print 4 copies
  • Document: eBIR Form 0605, Payment Form for the Certification Fee, print 4 copies

These forms MUST BE ELECTRONICALLY FILLED UP. There is a downloadable program from the BIR website that will enable you to do this. The bank WILL NOT ACCEPT a manually filled form, so be sure to do this step.

The ONETT Officer will tell you you can pay these taxes in any bank within Paranaque, but NOT ALL BANKS accept tax payments. We went to two banks [BDO in France, along Dona Soledad, and the BDO closest to the City Hall], but were told they did not accept tax payments, before we eventually found ourselves in the PNB Branch along Dona Soledad. They definitely accept taxes, and were very helpful about the forms.

Three copies of each form will be retained by the bank, and one copy will be returned to you after being stamped. The bank will also give you a copy of the deposit slip as your receipt. At this point, the following forms should be in your possession:

  • Form 1904 TIN of Seller and Buyer, 1 Original Copy each [from the BIR]
  • Notarized Deed of Sale, 1 Original Copy [From Step 1]
  • Certified True Copy of OCT/TCT [Blue Copy], 1 Original Copy [From Step 0]
  • Certificate of No Improvement, 1 Original Copy [From Step 2]
  • Certified True Copy of the Latest Tax Declaration [Yellow], 1 Original copy [From Step 2]
  • Acknowledgment Receipt, 1 Original Copy [From Step 1]
  • eBIR Form 1706, Capital Gains Tax, 1 Original Copy [From Step 4]
  • Bank Receipt for Capital Gains Tax Payment, 1 Original Copy [From Step 4]
  • eBIR Form 2000-OT, Documentary Stamp Tax, 1 Original Copy [From Step 4]
  • Bank Receipt for Documentary Stamp Tax Payment, 1 Original Copy [From Step 4]
  • eBIR Form 0605, Payment Form for the Certification Fee, 1 Original copy [From Step 4]
  • Bank Receipt for Certification Fee Payment, 1 Original Copy [From Step 4]

As directed by the ONETT Officer, you have to prepare 2 sets of photocopies of ALL these documents. Then you have to return to the ONETT Officer who made the initial assessment [if the officer is not on duty at the desk in the ground floor, you will be directed to the third floor]. The officer’s name should appear in the ONETT Computation Sheet given to you in STEP 3.

After receiving the documents, the ONETT Officer will give you a receipt, and tell you that the documents will be ready within 5 working days. However, they will advise you to call before you pick up the CAR, because there might be a delay. In our case, it was closer to 10 days, but this might also be because of the Holy Week.

Upon claiming the CAR, you will be asked to pay P15.00, and will receive the following documents:

  • 1 Original Copy of the CAR to be given to the RD/LRA, Brown Color
  • 1 Owner’s Original Duplicate of the CAR, Blue Color
  • 1 Original Deed of Sale, with BIR Stamp on the back pages
  • 1 Original eBIR Form 1706
  • 1 Original Bank Receipt for Form 1706
  • 1 Original eBIR Form 2000-OT
  • 1 Original Bank Receipt for Form 2000-OT
  • 1 Original eBIR Form 0605
  • 1 Original Bank Receipt for Form 0605

STEP 5: PAYMENT OF TRANSFER TAXES C/O CITY HALL

  • Document: Tax Clearance Certificate, 2 Copies [P50.00 each, from the City Treasurer’s Office]

After receiving the CAR, the next step is to get a tax clearance. Go to Window 37-38, and they will ask for:

  • 1 photocopy of the Latest Tax Declaration [From Step 2. Do not give your remaining Original copy, a photocopy will suffice]
  • 1 photocopy of the Certificate of No Improvement [From Step 2]
  • 1 photocopy of the Latest Tax Receipt [From Step 1]
  • 1 photocopy of the buyer / requesting party’s ID [From Step 1]

They will give you a printout stating that the property in question has no outstanding realty tax liabilities with the City Government. Otherwise, you might have to pay the outstanding amount to get a clearance. In our case, everything was already paid, so there were no issues.

  • Document: Transfer Tax Receipt, 1 Original Copy [from the City Treasurer’s Office]

After getting the tax clearance, ask the ever-present ushers for the window for the transfer tax. It’s usually Window 7, but ask all the same. They will require:

  • 1 Original CAR, either the Brown or Blue copy [From Step 4]
  • 1 photocopy of the CAR
  • 1 Original eBIR Form 1706 [From Step 4]
  • 1 Original Bank Receipt for Form 1706 [From Step 4]
  • 1 Original eBIR Form 2000-OT [From Step 4]
  • 1 Original Bank Receipt for Form 2000-OT [From Step 4]
  • 1 Original eBIR Form 0605 [From Step 4]
  • 1 Original Bank Receipt for Form 0605 [From Step 4]
  • 1 Original Deed of Sale, the same one with the BIR Stamps on the back pages [From Step 4]
  • 1 photocopy of the Deed of Sale
  • 1 Original Tax Clearance Certificate [From previous part]

The officer will asses the amount of tax based on the documents presented, and you can pay then and there. It’s 1/2 of 1% of the Sale Price, Assessed Value, or Zonal Value, whichever is higher. The officer will retain the photocopy of the CAR, and the photocopy of the Deed of Sale, and will return all other documents. The officer will affix a stamp on the front page of your Deed of sale. You will receive a literal receipt, with the item “Transfer Tax” under “Nature of Collection”.


STEP 6: TRANSFERRING REGISTRATION OF PROPERTY C/O REGISTRY OF DEEDS

At this point, you should have the following documents:

  • 1 Original Deed of Sale, with BIR Stamp on the back pages, and the City Treasurer’s Stamp on the front [From Step 5]
  • 2 Photocopies of the Deed of Sale, with all the stamps visible
  • 1 Original Owner’s Duplicate Copy of the Title [From Step 1]
  • 1 Original Copy of the CAR to be given to the RD/LRA, Brown Color [From Step 4]
    1 Original eBIR Form 1706 [From Step 4]
    1 Original Bank Receipt for Form 1706 [From Step 4]
    1 Original eBIR Form 2000-OT [From Step 4]
    1 Original Bank Receipt for Form 2000-OT [From Step 4]
    1 Original eBIR Form 0605 [From Step 4]
    1 Original Bank Receipt for Form 0605 [From Step 4]
  • 1 Original Copy of the Transfer Tax Receipt  [From Step 5]
  • 1 Original Copy of the Tax Clearance Certificate [From Step 5]
  • 1 Certified True Copy of the Latest Tax Declaration [From Step 2, they will require the Original]
  • 2 Photocopies of the Buyer / Presenter’s Valid ID [From Step 1]

Upon entering the office, the guard will ask what your business is. Tell him it’s for Transfer of Property, and he will provide you with a form. Fill up the form, and proceed to Window 1. They will assess your documents, and will pass it on to the next window. Your name will be called, and you will be given an assessment sheet, providing the amount you need to pay. We came to around Php 5,800+.

After payment, they will tell you the new Certificate of Title, in your name, will be available for pickup within 20 working days. It make take longer however, so check first with the LRA website if the title is ready for pickup. You will simply need the EPEB number provided in your receipt, and you will be able to see your title’s progress.


STEP 7: TRANSFER OF OWNERSHIP OF TAX DECLARATION C/O CITY ASSESSOR’S OFFICE

After receiving your Transfer Certificate of Title from the RD, you can proceed with the transfer of tax declaration. You must have the following documents:

  • New TCT/OCT [From Step 6]
  • 1 Original Deed of Sale [Step 1]
  • 1 Original CAR Owner’s Duplicate [Blue Copy, Step 4]
  • 1 Original Bank Receipt for eBIR Form 1706 [Returned to you by the RD with the new TCT, Step 6]
  • 1 Original Bank Receipt for eBIR Form 2000-OT [Returned to you by the RD with the new TCT, Step 6]
  • 1 Original Transfer Tax Receipt [Returned to you by the RD with the new TCT, Step 6]
  • 1 Original Real Property Tax Payment Receipt [Step 1]
  • 1 Original Tax Clearance Certificate [Must have full payment for the entire year, Step 5]
  • Pictures of the House or 1 Photocopy of Certificate of No Improvement [Step 2]

Go to any window and tell them your business. They will give you a payment order for Php 100.00, which you have to pay to the Treasury. After that, you have to photocopy all your documents [1 set], including the receipt given to you by the Treasury. The assessor will retain the photocopies and return the originals to you. They will ask you to return after 1 week with your original receipt to collect the new tax declaration.

And that’s it! After that, your property will properly be registered under your name, and you will already be liable for real property taxes upon it. In our case, we started off in early April 2017, and by July 2017, the entire process was complete. Some of the lag time was due to the availability of the registrant, but there were also unavoidable [and completely understandable] waiting periods on the part of the government.

As for the agencies and offices involved, the experience was actually not as horrible as some may have heard or experienced in the past. The BIR RDO 52 was very helpful and streamlined, and their phone lines are actually active, so you can contact them any time as to the status of your CAR. The RD/LRA registration process was very straightforward, and while the office in the city hall is a bit cramped, the staff more than make up for it for being very accommodating. There’s the LRA website, if you want to know your document’s availability without going to the RD. The Assessor’s office was also very accessible, the people in charge were very friendly and helpful, and there was no confusion as to what steps were supposed to be taken at what point in time.

All in all, the process was quite easy to follow, and it just takes a little bit of patience to see it through. Just keep in mind that these waiting periods and other seemingly repetitive steps are designed not to frustrate the registrant, but to make sure that everything is being processed properly and accurately. It’s better to suffer through the waiting period now and get a properly registered title, than to end up in legal dispute over your properties in the future.