18Aug2016 Update: Before investing in real estate, please read this first: Invest in Property PROPERLY.
08Nov2015 Update: Click here for a summarized step-by-step guide
As promised, here are the steps in a TCT transfer and annotation. To get this far in your search, I assume you are now familiar with which home loan provider to get, what the steps are in a home loan, as well as the basic definitions of TCT, title transfer and annotation.
I am writing this to serve as a friendly guide to you as based from my experience and not as legal or real estate broker advice. Once you’ve read these steps, hopefully you are not lost in the dark when you discuss these matters with your broker/agent/developer. Anyway, it is usually the broker or the developer who facilitates the title transfer, but just the same, it does not hurt to be informed. (Note: CTC transfer might have steps that are not covered in this post.)
1. Prepare the Documents
By this time in your buying-a-property or getting-a-home-loan phase, you should already have copies of most if not all of the documents listed below. Be prepared to photocopy these as you go along the process:
- Copies and Original Signed and Notarized Deed of Absolute Sale (DOAS)
- Photocopy of Developer License to Sell
- Photocopy of Developer Certificate of Registration
- Photocopy of Expanded Withholding Tax (EWT) payment
- Certified True Copy of TCT (from Registry of Deeds; this is a photographic copy of the TCT as stored in RD, authentic copy but still not the actual title)
- Certified True Copy of Tax Declaration (TD) (there are separate TDs for house and lot; if the seller/developer does not have this, you can get this from your Municipal / City Hall where the real estate taxes for the property get paid)
- Tax Clearances: this is different from the TD, a tax clearance basically says that Real Property Tax (RPT) payments on the property (detailed in the TD) are up to date. So it goes without saying that real estate taxes (amilyar) must be paid first before the property is transferred, and before the government releases any taxation document on the property.
2. Pay Taxes with BIR
Of course, a property sale occurred that is why we need to transfer the TCT, and of course there will be taxes to pay. Go to the BIR office governing the property you bought, submit the documents outlined above, and pay the following:
- Documentary Stamp Taxes (DST): depends on the agreement of buyer and seller, sometimes seller shoulders this aside from EWT, sometimes this is split between buyer and seller, sometimes this is fully shouldered by buyer. The set-up is usually documented in the DOAS. This costs 1.5% of property selling price (e.g. Php1M property will have Php15k DST) or it can be higher when the appraised value of the property as deemed by BIR is higher than selling price (which rarely happens).
- Expanded Withholding Tax (EWT): this is to be shouldered by the seller / developer as taxes from the sales. Just present the EWT certification you got from the developer.
- Other Taxes and Fees: Be prepared to pay some more amount on other taxes and fees such as application fees, stamps fees, certification and documentation fees, etc. Oh by the way, allot some money for photocopying too!
3. Apply for Certificate Authorizing Registration (CAR) with BIR
Once you’ve paid and while you’re still in BIR, submit the documents and all payments to apply for CAR. Basically, the CAR says that BIR is fine with the tax payments, and that buyer/seller may now formally register the sale with the Registry of Deeds. Up until this point, the agreement was just between buyer and seller. Once the CAR is available, even the BIR is amenable with the sale and registration of it in RD. CAR application and release usually lasts for two weeks.
4. Title Transfer at Registry of Deeds
The following documents will be asked by RD prior to transferring the title:
- CAR from BIR
- Developer Secretary’s Certificate (as proof of who is legally empowered and designated to sign legal documents in behalf of the developer)
- DST and EWT payment receipts
- Tax Clearance and Tax Declarations
- Receipts of Real Property Tax (RPT) payments (amilyar)
Once these are submitted, RD reviews them and then they show you the draft of the new TCT (the transferred title that cancels the old one). Once you confirm the details to be encoded therein, you will pay the TCT transfer costs (mine was Php8,700) as well as some fees and stamp charges again. Depending on the RD, title transfers usually last for another two weeks to a month.
5. Transfer of Tax Documents
Fast forward, you now have your property named after you, TCT is now named under you. Congratulations! Now, you need to transfer the other documents as well, namely the tax declarations. Go to the Municipal/City Hall governing the property that is now yours (naks!), and submit the following:
- Copy of CAR from BIR
- Copy of DOAS
- Copy of old TD under developer/seller’s name: this is so they know which old TD to cancel, supersede and override
- Copy of Tax Clearance and Real Property Taxes (RPT) Receipt: again, tax payments must be updated!
You will be asked to pay the TCT Transfer Tax (again?!? Yes, this time in Municipal / City Hall level) (mine was Php6,400) and wait for 1-3 days before you get the TDs under your name. Moving forward, in the years to come, it should be your name that you see in the RPT.
Usually, the bank handles this portion as they need to enforce their claim on your TCT. You just need to make sure that the TCT is finally under your name, as well as the tax documentations. Otherwise, how will the bank document its claim in a TCT that is not yours, or a property with delinquent tax payments right? Depending on the RD, annotations last for a month or so.
There you go. I hope details provided here were able to give you some guidance on the TCT Transfer and Annotation process. Just note that this entails some going back and forth to a number of government offices, so lots of free time or vacation leaves will be needed if you are to do this task yourself. As mentioned above, developers or agencies usually offer this service, of course for a fee on top of all the things you need to pay for, as detailed above.
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