STEP 1 – Bureau of Internal Revenue (BIR)
STEP 1.A – END RESULT: You will get an official computation of the Capital Gains Tax (or Value-Added Tax, Creditable Withholding Tax – whichever is applicable) and the Documentary Stamp Tax, signed by a BIR Officer in the RDO.
Submit the documents required to the BIR’s Revenue District Office (RDO) that has jurisdiction over the sold property. Note: BIR organized the Revenue District Offices per geographic area. For more information as to which Revenue District Office your property belongs, please visit www.bir.gov.ph.
Documents Required (BIR Requirements for Transfer of Land Title): Items #1 to #11.
Where to Transact: BIR Revenue District Office that has jurisdiction over the property
NOTE: To avoid penalties and surcharges, the Capital Gains Tax / Value-Added Tax should be paid thirty (30) days from notarization date and the Documentary Stamp Tax should be paid on the nearest 5th day of the month following the notarization date. Be very careful of the date when your deed of conveyance will be notarized.
You now have an official computation, go to Step 1.B.
STEP 1.B – END RESULT: Capital Gains Tax or Value-Added Tax and Documentary Stamp Taxes are paid; BIR forms stamped “received” by the Authorized Agent Bank; the stamped BIR returns are proofs of payments
Go to the Authorized Agent Bank and pay for the Capital Gains Tax or Value-Added Tax and Documentary Stamp Tax.
Documents Required:
- Signed official computation sheet from the BIR
- Deed of conveyance
- Completely filled-out BIR Form 1706 for the Capital Gains Tax; 3 copies, signed by the seller.
- Completely filled-out BIR Form 2000-OT for the payment of the Documentary Stamp Tax, 3 copies, signed by the buyer
- Cash or Manager’s Check with specific wordings on the Manager’s Check. Important Note: Contact the bank on what should be written on the Manager’s Check.
- Manager’s Check for Capital Gains Tax/VAT/CWT: it’s usually “IFO (in favor of) name of seller, TIN of seller, FAO (for the account of) Bureau of Internal Revenue”
- Manager’s Check for Documentary Stamp Tax: it’s usually “IFO (in favor of) name of buyer, TIN of buyer, FAO (for the account of) Bureau of Internal Revenue
Where to Transact: Authorized Agent Bank (AAB) accredited by the Revenue District Office
Important: Check with the RDO or check with the bank itself. Sometimes, the BIR website listing the Authorized Agent Banks under that RDO is not updated. Avoid a major headache! (1) Make sure the property is under the RDO you are dealing with. (2) Make sure you are paying in an Authorized Agent Bank (AAB) of that specific RDO.
You now have your BIR forms stamped by the bank, go to Step 1.C.
STEP 1.C – END RESULT: Secure the Certificate Authorizing Registration (CAR) from the BIR
Submit all documents listed in Step 1.A and Step 1.B to the BIR RDO. (except item #5 under Step 1.B since you’ve already paid it at the Authorized Agent Bank).
You will receive a time estimate of when the CAR and the documents you submitted will be available for pickup. This used to take about 2 weeks. It should be faster now with the government’s anti-red tape campaign.
Go back to the BIR RDO on the scheduled date. Pay the fee for the certificate. Important: Keep the receipt. This is additional proof that the Certificate Authorizing Registration (CAR) is authentic and valid.
Pickup the CAR, the supporting documents, most specially, the original deed of conveyance stamped “Received by BIR” and signed by an RDO Officer at the back. Important: Double check that the TIN number is correct!
The CAR you will receive has 2 copies: one blue color for use for the transfer and one brown as your copy. Important: Safekeep the brown copy of the CAR with your new title and tax declaration once it comes out.
Where to Transact: Bureau of Internal Revenue – Revenue District Office that has jurisdiction over your property.
You now have the CAR, go to STEP 2!
