Certificate of Tax Declaration (CTD) Transfer and Titling in the Philippines
According to the Republic Act 7160, a Certificate of Tax Declaration (CTD) is a document that is issued to the owner, taxable person, or business that indicates the value and improvements of the property, such land, buildings/improvements, or machinery, for real property tax purposes. The CTD is also the most common type of tax declaration in the Philippines.
After a real estate transfer gets registered or a new building, improvement, or piece of equipment is declared, the owner’s copy of the tax declaration is sent out. A Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) must be obtained within sixty (60) days of the purchase, as required by law, and the property must then be registered with the municipal assessor’s office.
The CTD is issued by the property owner’s town or city’s local assessor’s office. When the owner registers, sells, or transfers ownership of his/her property, he/she has to turn in the CTD. Additionally, tax declaration is a document that contains important information about the property, like its size, value, and location. It is also an important document that could help the owner to lower his/her taxes. Moreover, it is advisable to keep the CTD secure and up to date.
Why is it Important to Have a Certificate of Tax Declaration (CTD)?
Having a Certificate of Tax Declaration (CTD) is one of the initial requirements for buying real estate in the Philippines. This document is required, among other things, in order to transfer property ownership and connect utilities.
If the decedent left no will and has fully paid his/her debt, CTD is necessary for Extrajudicial Settlement (EJS) between heirs. If the heir is a minor, he/she shall be represented by a judicial or legal representative. Additionally, the fact of the extrajudicial settlement or administration must be published once a week for three (3) consecutive weeks in a general circulation of newspaper in the province for it to be valid.
Furthermore, the value of the property determines how much real estate taxes the owner needs to pay in the Philippines, therefore having an accurate tax declaration is essential. Maintaining it can also be advantageous when the owner decides to sell his/her home in the future. In this regard, this can help potential buyers determine the house’s value. In general, obtaining a CTD is essential if you own a property in the Philippines.
The CTD can be acquired from the local assessor’s office of the municipality or city where the property is located. Furthermore, the property owner or their designated agent must make a request.
What are the Requirements for the Property’s Seller?
When purchasing a property, it is crucial to take into account several factors related to the property’s seller. Confirming that the seller is alive is essential to ensure the legitimacy of the transaction. The seller should possess an approved lot plan, providing clarity on the property’s boundaries and layout. Valid identification, land title, and legal documents are necessary to verify the seller’s identity, proof of ownership, and legal capacity to sell the property. Additionally, the seller should provide the Certificate of Tax Declaration (CTD) and evidence of the latest payment of Real Property Tax (RPT) to ascertain that tax obligations are up to date. A Tax Identification Number (TIN) is also required for tax-related purposes. Furthermore, a Special Power of Attorney (SPA) may be necessary to authorize someone else to act on behalf of the seller in the transaction.
What are the Requirements for the Property’s Buyer?
When preparing to sell a property, it is vital to have a checklist in place for the prospective buyer. Ensuring that the buyer presents a valid identification is crucial for verifying their identity and legal capacity to engage in the transaction. Additionally, obtaining the buyer’s Tax Identification Number (TIN) is essential for tax-related documentation and compliance purposes. Furthermore, considerations regarding payment arrangements should be carefully addressed to ensure a smooth and secure transaction process. By adhering to this checklist, sellers can help facilitate a transparent and legally sound property sale transaction.
How to Process Tax Declaration Transfer or Titling Certification?
To facilitate the transfer of the Certificate of Tax Declaration (CTD) and obtain titling certification, a comprehensive procedure must be followed:
- Step 1: Consult with the Department of Environment and Natural Resources Community Environment and Natural Resources Office (DENR-CENRO), where the approved lot plan is presented and an Alienable and Disposable Certificate is requested.
- Step 2: Consult with a Geodetic Engineer to survey and segregate the lot according to agreed-upon size or area. Once the approved lot plan is segregated, the buyer selects the portion to purchase.
- Step 3: Secure a Deed of Absolute Sale and a Special Power of Attorney (SPA) for processing the title and other certifications, which must be notarized. Additionally, a Sworn Declaration of No Improvement is obtained for E-CAR processing, along with tax mapping and multiple copies of valid IDs with specimen signatures from both buyer and seller.
- Step 4: Process the E-CAR and secure various documents, including affidavits, BARC Chairman certification, and certificates of landholding for both seller and buyer. These are submitted to the Department of Agrarian Reform (DAR) to obtain DAR Clearance or MARPO Certification.
- Step 5: After securing DAR Clearance (MARPO), all legal documents are brought to the Registry of Deeds or Land Registration Authority (LRA) for tax declaration transfer. Extra copies of essential documents, such as tax clearance and valid IDs, are provided, along with an SPA if required.
- Step 6: Submit the received or claimed documents to the Provincial Assessor’s office to generate a new tax declaration number for the new owner. Various requirements, including subdivision approval and court clearance, are obtained from the Provincial Assessor’s and Municipal Trial Court.
- Step 7: Additional documents are secured, and an application for Agricultural Free Patent is made at CENRO, endorsed to PENRO for evaluation. Once evaluated, notification is received to collect the title from the Registry of Deeds.
Furthermore, the Tax Declaration Certificate requires to be renewed annually and has a one-year validity period. It must be revised every three (3) years or whenever the property’s value changes. Additionally, the tax declaration must be signed by the owner of the property or an authorized agent. Once the buyer receives it, he/she also needs to sign the tax declaration to attest to receiving it. It is imperative to keep tax declaration information confidential and file a Certificate of Tax Declaration (CTD) even if property taxes are overdue. Staying informed about real estate tax changes is crucial for property owners.
Need further information and assistance regarding Tax Declaration Transfer or Titling Certification Steps? Talk to our team at Duran & Duran-Schulze Law to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
