1. What is the duty of person acquiring real property or making improvements?
Under RA-7160 otherwise known as the Local Government Code of 1991, Section 203 stipulates that it shall be the duty of any person, or his authorized representative, acquiring at any time real property in any municipality or city or making any improvement on real property;
- To prepare, or cause to prepared;
- File with the Provincial, City or Municipal Assessor, a sworn statement declaring the true market value of the subject property;
- The sworn statement must be filed within sixty (60) days after acquisition of such property or upon completion or occupancy of the improvement, whichever is comes earlier.
2. What are the documentary requirements in the real property transfer of ownership in the tax declaration?
Based on the Manual on the Property Appraisal and Assessment Operations prescribed by the BLGF-DOF, and policy and guides lines from the Provincial Assessor of Leyte, the following are the requirements, to wit;
- Certified true copy of Title (OCT, TCT, free patent, homestead or miscellaneous sale) from Registry of Deeds (ROD);
- Deed of conveyance (Deed of Sale, Donation, Extra-judicial Settlement, Self-Adjudication, etc.) duly registered at Registry of Deeds (ROD);
- Approved subdivision plan from Land Management Service-DENR (LMS-DENR);
- Certificate Authorizing Registration (CAR) from Bureau of Internal Revenue (BIR);
- Official Receipt (OR) of payment of Real Property Taxes up to the current year;
- Official Receipt (OR) of Transfer Fee;
- Sworn statement of True Market Value of the property; and
- Residence Certificate of the tax declarant/administrator.
3. What is the process involves in the transfer of tax declarations?
The processes start upon perfection of contract or notarization of Deed of Conveyance, e.g. Deed of Absolute Sale, Deed of Donation, Deed of Extra-Judicial Settlement, etc. The buyer or the heirs should facilitate immediately the processing of the legal documentations.
The first step is to go to the Office of the Municipal Treasurer’s Office (MTO) for computation of assessment (tax due) and the corresponding payment of real property taxes, and likewise the payment of transfer fee. The computation of transfer fee is 3/8 of 1% base on the amount in consideration on the Deed of Absolute Sale or the Market Value amount in the tax declaration whichever is the higher. Certified true copies of tax declarations, certificate of land holdings, and other necessary certificates shall be issued at the Office of the Municipal Assessor (MAO) upon payment of regulatory fees to the MTO.
Secondly, if portion only of the parcel of land is being purchase, a mandatory approved subdivision plan is required. The buyer is advice to facilitate the said plan at the Land Management Service (previously Bureau of Lands) at Department of Environmental and Natural Resources office (LMS-DENR). However, prior to the approval of the subdivision plan, a private license surveyor (geodetic engineer) shall be hired in order to undertake the conduct and preparation of survey works including the technical documentation of the land concern.
In case a whole parcel of land is has been purchased, no more approved subdivision plan is required. It is advice to proceed immediate to the Bureau of Internal Revenue (BIR) for processing of clearances for issuance of CAR (Certificate Authorizing Registration). Payment shall be made for the Capital Gain Tax and Documentary Stamp Tax (for Deed of Absolute Sale); as in case of Extra-judicial Settlement payment of Estate Tax (previously inheritance tax); and in case of Donation, a Donor’s Tax shall likewise be paid.
Upon completion of the clearances at the BIR, the next step is the registration of Deed of Conveyances at the Registry of Deeds. Accordingly, corresponding registration and other fees shall be paid, and importantly the document must be entered in the book of Registry and likewise must stamped bearing the registry number and the signature of the duly authorized by the Registry of Deeds official.
The last step is the submission of all the documents as required by the Office of the Municipal Assessor and the subsequently for recommendation for approval to the Office of the Provincial Assessor. The processing period at the Provincial Assessor Office takes about ten working days or two weeks more or less. Upon approval, a copy shall be furnished to the tax declarant or lot owner.
Note: The tax payer is reminded to pay the realty taxes on or before end of March every year to avail the 20% discount (Sec.251, RA-7160).