Transfer of Land Title: The Order and the Taxes
Bureau of Internal Revenue · property
Quick answer
Notarise the deed, pay capital gains and documentary stamp tax to BIR and get the eCAR, pay the transfer tax within 60 days, register at the Registry of Deeds, then have the assessor issue a new tax declaration. Both offices require proof the transfer tax was paid.
Every figure on this page is from official published documents: Official Gazette and BIR.
Last verified 3 sources, listed below
Official Gazette | Republic Act No. 7160, Local Government Code of 19911 · BIR | eServices2 · BIR | National Internal Revenue Code of 1997, as amended3. PHGuides is independent and not affiliated with BIR.
The sequence matters more than the paperwork. Two offices are required by statute to turn you away if a step is missing, so doing them out of order costs a return trip rather than a penalty.
The order
| # | Step | Where |
|---|---|---|
| 1 | Notarised deed of sale | Notary public |
| 2 | Capital gains tax and documentary stamp tax | BIR, through eONETT or an RDO |
| 3 | eCAR, the Certificate Authorizing Registration | BIR |
| 4 | Local transfer tax, within 60 days | Provincial or city treasurer |
| 5 | Registration of the deed and issue of the new title | Registry of Deeds |
| 6 | Cancel the old tax declaration, issue a new one | Assessor |
The deed of absolute sale guide covers step 1 and why the document has to be a public instrument.
The two gates written into the law
Section 135(b) of the Local Government Code sets up two refusals:
The Register of Deeds of the province concerned shall, before registering any deed, require the presentation of the evidence of payment of this tax. The provincial assessor shall likewise make the same requirement before cancelling an old tax declaration and issuing a new one in place thereof.
So the transfer tax receipt is not a formality you produce later. It is the thing that unlocks steps 5 and 6.
The same subsection puts a duty on the notary that most sellers never hear about:
Notaries public shall furnish the provincial treasurer with a copy of any deed transferring ownership or title to any real property within thirty (30) days from the date of notarization.
Your LGU therefore learns about the sale from the notary, on a 30-day clock, whether or not you have paid anything.
What the transfer tax actually costs
| Rate | |
|---|---|
| Province, statutory ceiling | 50% of 1%, so 0.5% |
| City, under the Section 151 uplift | Up to 50% higher, so 0.75% |
Charged on the total consideration, or on the fair market value where the monetary consideration is not substantial, whichever is higher. Transfers under RA 6657, the agrarian reform law, are exempt.
The ceilings are national; the rate your LGU actually charges is set by ordinance, so confirm it locally.
Due within 60 days from the execution of the deed, or from the date of death where the property passes by succession. The duty falls on the seller, donor, transferor, executor or administrator.
The BIR side
| Tax | Rate | Base |
|---|---|---|
| Capital gains tax | 6%, final | Higher of gross selling price or fair market value |
| Documentary stamp tax | 1.5% | The same base |
On a ₱3,000,000.00 sale that is ₱180,000.00 of capital gains tax and ₱45,000.00 of DST, before the transfer tax and registration fees.
Capital gains tax is charged on gains presumed to have been realized, so it is due on the full consideration even if you sold at a loss. The capital gains tax guide covers the principal residence exemption, and the calculator applies the 6%.
DST has its own clock. Section 200(B) requires the return to be filed, either electronically or manually, within ten (10) days after the close of the month when the taxable document was made, signed, issued, accepted or transferred. The documentary stamp tax guide covers the rest.
Which fair market value? Not the zonal value. Section 6(E) was repealed by Section 38(c) of RA 12001, and the comparator is now the Schedule of Market Values. The zonal values guide explains what BIR still publishes and what changed.
The eCAR
The Certificate Authorizing Registration is BIR’s confirmation that the transfer taxes are settled. Without it the Registry of Deeds will not register the transfer, which makes it the practical bottleneck in the whole sequence.
BIR runs eONETT for exactly this class of transaction. In BIR’s own description it is a web-based application enabling taxpayers to transact their One-Time Transaction for the taxable sale or donation of real or personal property online, covering:
| Form | Tax |
|---|---|
| 1606 | Creditable withholding tax |
| 1706 | Capital gains tax, real property |
| 1707 | Capital gains tax, shares of stock |
| 1800 | Donor’s tax |
| 2000-OT | Documentary stamp tax, one-time transactions |
The eFPS guide maps eONETT against BIR’s other systems.
What this page does not state: BIR’s published Tax Code page carries Section 58(F), “Registration with Register of Deeds”, as a heading, but the consolidated text was not readable in the source read for this guide, so no wording from it is quoted here. The eCAR requirement above is stated from the transfer practice BIR’s own eONETT description supports, not from a provision reproduced here.
Inherited property is a different route
Where the transfer follows a death, the 60-day transfer tax clock runs from the date of death, and the estate has to be settled before anything can move.
The extrajudicial settlement guide covers Rule 74, the bond and the 2-year exposure, and the estate tax guide the 6% on the net estate with its ₱5,000,000.00 standard deduction.
After the title, the tax declaration
The last step is the assessor’s, and it is the one people skip because the title already says their name. The tax declaration is what the annual real property tax is billed against, so leaving it in the seller’s name leaves the bill there too.
Real property tax runs on assessed value, which for residential land is 20% of fair market value, at a basic rate capped at 2% in cities plus a 1% Special Education Fund. The real property tax guide sets out the levels.
Where this goes wrong
Paying the transfer tax after going to the Registry of Deeds. The Register of Deeds is required to see the evidence of payment first.
Missing the 60 days. It runs from execution of the deed, or from the date of death, not from when you get around to it.
Computing the tax off the zonal value. The comparator is the Schedule of Market Values.
Assuming the city rate is 0.5%. Cities may go up to 50% higher, so 0.75%.
Stopping at the new title. Until the assessor cancels the old tax declaration, the amilyar is still billed to the seller.
Forgetting the notary already told the treasurer. That copy is due within 30 days of notarisation.
Frequently asked questions
- What order do the steps go in?
- Notarised deed, then the BIR taxes and the eCAR, then the local transfer tax, then registration at the Registry of Deeds, then a new tax declaration from the assessor. The order is not a convention: the Register of Deeds and the assessor are each required by law to refuse you without proof the transfer tax was paid.
- How much is the transfer tax?
- Section 135 caps the provincial rate at 50% of 1%, so 0.5% of the consideration or the fair market value, whichever is higher. Section 151 lets a city exceed the provincial maximum by up to 50%, which is where the familiar 0.75% city figure comes from. Your LGU sets the actual rate by ordinance.
- When is the transfer tax due?
- Within 60 days from the date of the execution of the deed, or from the date of the decedent's death where the transfer is by succession. It is the duty of the seller, donor, transferor, executor or administrator to pay it.
- What is an eCAR and why does it matter?
- The Certificate Authorizing Registration is BIR's confirmation that the taxes on the transfer have been settled, and the Registry of Deeds will not register a transfer without it. BIR's eONETT system handles One-Time Transactions online, covering creditable withholding tax Form 1606, capital gains tax Forms 1706 and 1707, donor's tax Form 1800 and documentary stamp tax Form 2000-OT.
- What taxes does BIR charge on a sale?
- Capital gains tax at 6% of the higher of the gross selling price or the fair market value, and documentary stamp tax at 1.5% of the same base. On a ₱3,000,000.00 sale that is ₱180,000.00 and ₱45,000.00.
- Which figure is the fair market value now?
- The Schedule of Market Values. Section 6(E) of the Tax Code, which let the Commissioner prescribe zonal values, was repealed by Section 38(c) of RA 12001, and under Section 18(a)(3) of that Act the Commissioner uses the Schedule of Market Values or the actual gross selling price, whichever is higher.
- Does the notary have any duty here?
- Yes, and it is often forgotten. Section 135(b) requires notaries public to furnish the provincial treasurer with a copy of any deed transferring ownership or title to real property within 30 days from the date of notarisation.
- Is the new tax declaration the last step?
- It is the last of the transfer steps, and it matters because the tax declaration is what the annual real property tax is billed against. The assessor cancels the old declaration and issues a new one, and is required to see proof the transfer tax was paid first.