Many buyers think that transferring property ownership is simply signing a Deed of Sale. But in reality, transferring a property title in the Philippines involves several legal and tax processes.
More importantly, the process is slightly different depending on the type of property.
There are two main types of property title transfers:
Vacant Lot (Land Only)
House & Lot (Land + Improvements)
While both transfers go through the Registry of Deeds, the documents, risks, and costs may vary.
Below is a step-by-step guide to help buyers and sellers understand the process.
1. How to Transfer a Vacant Lot (Land Only)
Step 1: Due Diligence Before Signing
Before signing any contract, always verify the property documents.
Checklist:
Verify the title at the Registry of Deeds
Check if the title is clean and free from:
- liens
- mortgages
- adverse claims
Verify Real Property Tax (RPT / Amilyar)
Make sure land taxes are updated.
Inspect the property boundaries
Check for:
- encroachment issues
- right of way problems
Confirm land classification
Determine whether the property is:
- residential
- agricultural
- commercial
This is important for future development or building permits.
Step 2: Signing the Deed of Absolute Sale (DOAS)
Once verification is complete, both parties sign the Deed of Absolute Sale.
Important reminders:
The document must be notarized Names must match the title exactly Married sellers require spousal consent TIN numbers must be correct
Step 3: Pay Taxes at the BIR
Within 30 days from notarization, the taxes must be filed with the Bureau of Internal Revenue.
After payment, the BIR will issue an Electronic Certificate Authorizing Registration (eCAR).
Without an eCAR, the property title cannot be transferred.
Step 4: Pay Transfer Tax at the Local Government
Next, payment is made at the City Treasurer’s Office.
In Cagayan de Oro City, transfer tax is usually around 0.5%–0.75% of the property value.
Step 5: Submit Documents to the Registry of Deeds
The following documents must be submitted:
- eCAR
- notarized DOAS
- original title
- tax receipts
- transfer tax receipt
Once approved, a new Transfer Certificate of Title (TCT) will be issued under the buyer’s name.
Step 6: Update the Tax Declaration
Finally, the buyer must transfer the Tax Declaration for the land at the Assessor’s Office.
2. How to Transfer a House & Lot (Land + Improvement)
The process is similar to land transfer—but additional verification is required because the house structure is involved.
Additional Due Diligence for House & Lot
Before signing, verify the following:
Title verification (same process as land)
Two Tax Declarations
- Land
- House / Improvement
Confirm taxes are updated for both
Verify the house matches the declared floor area
If possible, verify:
- Building permit
- Occupancy permit
Many property transfers get delayed because of:
- undeclared house improvements
- incorrect floor area
- unpaid property taxes for the house
Deed of Absolute Sale Must Include the House
The Deed of Absolute Sale must clearly state that the sale includes:
- the land
- the house
- all improvements
Failure to include this properly can create complications during transfer.
BIR Tax Computation
The BIR may compute taxes based on the combined value of land and improvements.
Because of this, house & lot transfers often have higher taxes compared to land-only transfers.
Transfer Tax and Title Registration
The remaining process follows the same steps:
BIR payment and eCAR issuance Transfer tax payment at City Hall
Title registration at the Registry of Deeds
Update tax declarations
For house & lot properties, both must be transferred:
Tax Declaration for the land Tax Declaration for the house
Typical Property Transfer Costs in the Philippines
Below are the common taxes and fees involved when transferring property ownership.
1. Capital Gains Tax (CGT)
6% of the higher value between:
- selling price
- BIR zonal value
- fair market value
Typically paid by the seller, but this can be negotiated.
2. Documentary Stamp Tax (DST)
1.5% of the property value
Usually paid by the buyer.
3. Transfer Tax
Around 0.5%–0.75% depending on the LGU.
Usually paid by the buyer.
4. Registration Fee (Registry of Deeds)
Graduated fee depending on property value, usually around 0.25%–0.5%.
5. Notarial Fee
Typically 1%–2% of the selling price, depending on the notary.
6. Other Possible Costs
Additional expenses may include:
- certified true copies
- clearance fees
- Special Power of Attorney (SPA) if someone signs for the owner
- penalties or back taxes if improvements were undeclared
Quick Rule of Thumb for Transfer Costs
If documents are clean and updated:
Expect around 8%–10% of the property value for total transfer costs.
Vacant lot transfers are usually smoother.
House & lot transfers can become more expensive if improvements were undeclared or mismatched in tax records.
Who Pays the Transfer Costs?
Common practice in the Philippines:
Seller usually pays:
Capital Gains Tax
Buyer usually pays:
Documentary Stamp Tax Transfer Tax Registration Fee Notarial Fee Tax Declaration transfer
However, all expenses are negotiable and should be clearly written in the contract.
Final Broker Tip
One of the biggest mistakes buyers make is starting the transfer process after signing the Deed of Sale.
A smarter approach is to start verifying documents before signing the contract.
Proper due diligence can help you avoid:
- legal disputes
- delayed title transfers
- unexpected taxes or penalties
Looking for properties in Cagayan de Oro?
Browse the latest listings or post your property today on https://primelisting.ph/property-list/