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hold of the original of the official receipts evidencing payment by seller of realty taxes of the
current and preceding years, before you gave him the full payment of the sale.
We had an experience that the Seller was able to gave us the Property Tax Receipt of the
current year however, upon application of Tax Clearance it was discovered that the previous
five years was not paid!
STEP 4 BUREAU OF INTERNAL REVENUE
Submit the following:
Certified true copy of the latest tax declaration issued by the City Assessors Office
for the land and improvement applicable to the taxable transaction;
Owners copy (for presentation purposes only) and photocopy (for authentication) of
the Original Certificate of Title (OCT), or the certified true copy of the Transfer
Certificate of Title (TCT);
You (and/or the Seller, depends on the agreement) have to pay the following:
a.) Capital Gains Tax (6% for individual seller) or Witholding Tax (7.5% if seller is a
corporation) it is the Sellers responsibility to pay the Capital Gains Tax (CGT) or Witholding
Tax unless the Buyer agrees otherwise
b.) Documentary Stamps Tax (1.5% of the selling price or zonal value or fair market value,
which ever is higher) Payment for DST is responsibility of the Buyer
You shall received the following:
The Original copy of the Deed of Absolute Sale stamped received by the BIR
Original Copies of the BIR Return Forms 1706 (CGT) and 2000 (DST) stamped
received by the BIR
Important Notes:
i.) Capital Gains Tax and Documentary Tax shall be computed based on Selling Price (per
Deed of Sale), or Market Value of Tax Declaration, or BIR Zonal Value, whichever is higher.
ii.) If the Buyer agrees to pay the Capital Gains Tax, it very important that you get the
Sellers Tax Identification Number (TIN) and a copy of his ID
iii.) Forms for payment of Capital Gains Tax can be secured from the BIR or may be
downloaded from the BIR website http://www.bir.gov.ph
iv.) Payment for Capital Gains Tax and Documentary Stamps can only be paid at the BIR
Regional Office or BIR authorized banks where the property is located. It can be paid either
in cash or managers check.
v.) Capital Gains Tax shall be filed and paid to the BIR within thirty days from the date of
sale, otherwise there will be interest and penalty.
vi.) Documentary Stamps Tax shall be paid on or before the 5th day of succeeding month
from the date of sale.
STEP 5 MUNICIPAL TREASURERS OFFICE (Located in the City Hall or Municipal
Hall)
Pay the following:
a.) Transfer Tax is computed as 1/2 of 1% (0.5%) of the Selling Price or Zonal Value or Fair
Market Value of Tax Declaration, whichever is higher. Payment of Transfer Tax is
responsibility of the Buyer
NOTES:
i.) The transfer tax must be paid at the CTO not later than 60 days from the date of
execution of the Deed of Absolute Sale or the notarization date thereof, whichever is earlier.
ii.) Prepare the following requirements:
Official receipt of the Bureau of Internal Revenue (for documentary stamp tax)
Certificate Authorizing Registration from the BIR (CAR) including official receipts for
payment of DST and CGT;
Original copy of owners duplicate of TCT (in the name of the seller);
Certificate from the SEC that the articles of incorporation of the buyer have been
registered.
NOTE:
A new Certificate of Title under the New Owners Name will be issued by Registry of Deeds.
Be sure to double check the spelling of names and other information in the new TCT before
receiving the new TCT.
STEP 6 MUNICIPAL ASSESSORS OFFICE (Located in the City Hall or Municipal
Hall)
Secure the following:
a.) New Tax Declaration
NOTES:
i.) Prepare the following requirements:
The transfer certificate of title (TCT) issued by the RD (in the name of the buyer)
Hope this helps! Good luck with your transactions as I tell you, it was not that easy. :-) But if
you have question, please post it below and I will try my best to answer them.