Taxes and Other Fees

This is the normal sharing of expenses between the buyer and the seller when transferring the real estate property title (TCT or Transfer Certificate of Title) to a new owner:

The Seller shoulders the:

• Capital Gains Tax (6% of the contract price)
• And all other unpaid taxes due.
• Pays the Agent / Broker's commission (usually 3 to 5% of the selling price).

• Documentary Stamp Tax - 1.5% of the contract price, or zonal value or fair market value, which ever is higher.
• Transfer Tax - 0.5% of the contract price, or zonal value or fair market value, which ever is higher.
• Registration Fee - 0.25% of the contract price, or zonal value or fair market value, which ever is higher.
• Notarial Fee - 1.0 - 1.5% of the Sale Price (Negotiable in big transactions)

The above sharing of expenses is the standard practice in the Philippines. However, buyers and sellers can mutually agree on other terms as long as it is done during the negotiation period (before the signing of the "Deed of Sale").

The "Deed of 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. Always purchase property with a proper Title & a deed of sale if possible, and if there is not one, a tax declaration is your last choice.

Your Agent / Broker will usually do the registration process without any additional payments (aside from the commission).

Documents needed for the Transfer of Certificate of Title (TCT):

• Copies of the Deed of Absolute 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
• Transfer tax
• Receipt of payment of the transfer and registration fees

An adapted form of the "Torrens" system of land registration is used in the Philippines. The system was adapted to assure a buyer that if he buys a land covered by an Original Certificate of Title (OCT) or the Transfer Certificate of Title (TCT) issued by the Registry of Deeds, the same will be absolute, indefeasible and imprescriptible.