Buying Property in the Philippines Process: Due Diligence, Contracts, Taxes and Title Transfer in Order

The buying property in the Philippines process at a glance, and what foreigners can buy

For a foreign buyer, the process runs in this order: confirm what you can legally own, verify, reserve, sign and notarize, pay or finance, settle taxes at the BIR for the eCAR, pay the local transfer tax and clear real property tax, register the new title, update the tax declaration, and take turnover. Get the order wrong and the usual result is money paid with no title to show for it.

1. Confirm what you can buy under the Constitution and the Condominium Act (this section).
2. Check the title, tax declaration, the developer's license to sell and the broker's license (section 2).
3. Reserve the property (section 3).
4. Sign a Contract to Sell or a Deed of Absolute Sale and notarize the deed (section 3).
5. Pay or arrange a loan (section 4).
6. Pay taxes at the BIR Revenue District Office (RDO) where the property is and obtain the eCAR (section 5).
7. Pay the transfer tax and get a real property tax clearance from the local treasurer (section 5).
8. Register at the Registry of Deeds, which cancels the old title and issues a new one (section 5).
9. Get a new tax declaration from the assessor (section 5).
10. Take turnover and start paying holding costs (section 6).

What foreigners can buy. Article XII, Section 7 of the 1987 Constitution says that, except by hereditary succession, private lands may only be transferred to those qualified to acquire or hold lands of the public domain. That is why a foreigner cannot buy land in their own name. Condominiums follow their own rule. Section 5 of the Condominium Act, RA 4726, says that where the common areas are co-owned by unit owners, a unit may only go to Filipino citizens or corporations at least 60% Filipino-owned, except by inheritance. Where a condominium corporation holds the common areas, a transfer is valid only if the accompanying membership or shares would not push foreign interest in that corporation beyond the legal limit. In practice foreigners buy condominium units, and the first question is whether the project still has foreign ownership room. The four legal holding routes are explained in what foreigners can buy in the Philippines, and a condo title checklist is in foreign condo ownership explained.

Get a TIN first. The first item on the BIR capital gains tax checklist is the TIN of both seller and buyer, entered on a TIN Verification Slip. The BIR primary registration requirements say local individuals and resident aliens getting a TIN for a one-time transaction (ONETT) file BIR Form 1904, two originals if filed manually, with a photocopy of a government-issued ID, and online applicants upload a selfie holding the ID. For non-resident foreign nationals, the list shows Form 1904 plus the passport data page with entry and exit stamps where applicable. If a representative applies, the special power of attorney must be apostilled or authenticated by a Philippine embassy or consulate. Without a TIN, the BIR cannot issue the tax computation. To have the full sequence mapped to your property, talk to Yixing's settling-in team.

Step 1: Verify the title, tax declaration, developer and broker before paying

Before any money moves, get a certified true copy (CTC) of the title from the Registry of Deeds yourself, check the owner and annotations, then confirm the developer's license to sell and the broker's license.

Title. The first use the LRA FAQ gives for a CTC is due diligence before buying, selling or leasing property. You can request one at the Registry of Deeds where the property is, at any computerized registry through Anywhere-to-Anywhere (A2A), or online through the LRA eSerbisyo Portal with door-to-door delivery. You need a letter request or Transaction Application Form (TAF), a photocopy of the title and an ID. According to the LRA, eTitles (PHILARIS) requested at the local registry can be claimed after 1 working day and manual titles after 3 working days. eSerbisyo delivery takes 3 to 5 working days in Metro Manila and 5 to 7 elsewhere, and manual titles may need another 5 to 7 working days.

On the CTC, check 3 things: that the registered owner matches the seller's ID, that the area and lot or unit number match the contract, and whether the annotations show a mortgage, levy, adverse claim or a registered sale contract. Under the Property Registration Decree, PD 1529, Section 51 makes registration the operative act that binds the land as to third persons, and Section 52 makes a registered instrument constructive notice to everyone from the time of registration. How to read annotations is covered in title annotations explained, and authenticity checks in how to verify a Philippine land title.

Tax declaration and arrears. Also get a certified copy of the latest tax declaration from the local assessor, since both the BIR and the Registry of Deeds require it. Ask the seller for real property tax receipts and ask the condo administration whether dues are unpaid. Who bears a previous owner's arrears is covered in unpaid association dues on resale units.

Developer. Section 5 of PD 957 says a registered developer may not sell subdivision lots or condominium units until it has a license to sell. Section 25 of RA 11201 moved the former HLURB's regulatory function over subdivisions and condominiums to the Department of Human Settlements and Urban Development (DHSUD). For pre-selling units, check this license first, as described in how to check a developer's license to sell.

Broker. Section 29 of the Real Estate Service Act, RA 9646, bars anyone from practicing or presenting themselves as a real estate service practitioner without passing the licensure exam and holding a valid certificate of registration and professional ID, or a special or temporary permit, and requires brokers to post the required bond. Section 28 exempts, among others, owners dealing with their own property (except developers) and unpaid attorneys-in-fact. See how to check a broker's license.

Two more checks people skip: whether anyone is occupying the property (occupied property) and how close it is to a fault line (fault line checks).

Title, tax declaration, license to sell and broker license: all four checks are cheapest before any money moves. Have Yixing run the checklist on your property and sequence signing and payment →

Steps 2 and 3: Reservation, contract and notarization

A reservation holds the unit but transfers nothing. Pre-selling and installment purchases usually use a Contract to Sell, followed by a Deed of Absolute Sale once fully paid. The notarized deed is what the BIR and the Registry of Deeds accept for the transfer.

Reservation. New units are usually held with a reservation payment and a reservation agreement that locks in the unit and price terms. Whether that money is refundable depends on the agreement and on how far legal protection reaches, so read the terms before paying. See whether a reservation fee is refundable.

Which contract comes first. A Contract to Sell is conditional, and ownership does not pass until the price is paid in full. A Deed of Absolute Sale transfers ownership once signed and delivered. The differences and a safe signing order are in Contract to Sell vs Deed of Absolute Sale. Two requirements come straight from official sources:

• Section 17 of PD 957 requires the seller to register contracts to sell, deeds of sale and similar instruments for subdivision lots and condominium units with the Registry of Deeds where the property is, whether or not the price is fully paid. After paying for a while, pull a CTC and look for the annotation.
• The BIR checklist requires a notarized Deed of Absolute Sale, one original and two photocopies. The LRA FAQ lists the basic registration requirements as the original deed, a certified copy of the latest tax declaration and the owner's copy of the title. An unnotarized deed will not get through either office. See how notarization works in the Philippines.

Signing from abroad. The BIR checklist says a deed or special power of attorney (SPA) executed abroad needs a certification from the Philippine consulate or an apostille. The LRA FAQ still says documents executed abroad need a certificate of authentication from the nearest Philippine consulate. Because the wording differs, confirm with the RDO and the Registry of Deeds which form each will accept. When a representative transacts, the BIR asks for photocopies of the government IDs of the parties and the representative, signed on the copies. See apostille and consular authentication.

Married sellers. The BIR lists a PSA-certified marriage certificate as an extra requirement when the transferor is married. Whether the spouse must also sign or consent should be confirmed case by case. Where ownership is disputed, consult a licensed lawyer; this article is not legal advice.

Corporate sellers. The BIR asks for a secretary's certificate or board resolution approving the sale and naming the authorized signatory.

Backing out of an installment purchase. Buyers of residential property on installment are protected by RA 6552, the Maceda Law. Grace periods and refund rules are in the Maceda Law refund guide. If the contract turns out to differ from what the seller promised verbally, keep every message and receipt before deciding whether to negotiate, assign or file a complaint.

Step 4: Payment and financing, with every payment tied to a document

Ready units and resales are usually paid in full at the same time the deed is signed. Pre-selling units are usually paid in installments. Loan releases are generally tied to mortgage registration. Whatever the structure, each payment should line up with a document you can verify.

The 3 common structures:

• Full payment. After due diligence, the final payment, the signing and notarization of the Deed of Absolute Sale, and the handover of the owner's copy of the title happen together. Do not pay in full before you hold the notarized deed and the original title.
• Developer installments. You pay under the Contract to Sell schedule, then settle the balance around turnover with a loan or your own funds. For ordinary assets sold on installment, the BIR asks for the Contract to Sell and the payment schedule, which shows the tax treatment differs from a one-time sale. Follow the BIR's classification.
• Loans. Whether a foreigner qualifies and on what terms depends on each bank or housing fund's current policy. See home loans for foreigners and Pag-IBIG for foreigners.

Three protections for pre-selling buyers under PD 957:

1. Section 18: a developer may not mortgage any unit or lot without prior written approval from the regulator. If the project is mortgaged, the buyer may choose to pay installments directly to the mortgagee, who applies them to the debt on that unit so the buyer can get title promptly after full payment.
2. Section 25: the developer must deliver the title once the buyer has paid in full, and may not charge any fee for issuing it other than those needed to register the deed of sale. If a mortgage remains when the title is issued, the developer must redeem it within 6 months.
3. Section 26: until title passes to the buyer, the developer pays real estate tax and assessments without recourse to the buyer. If the buyer has actually taken possession and moved in, the buyer becomes liable to the developer for that tax from the following year.

Three questions before each payment: Is the payee the registered owner or the licensed developer? Who issues the official receipt or invoice? The BIR also asks for the seller's invoice or official receipt in sales of capital assets. And who pays each tax and fee under the contract?

Money from abroad. If the purchase money comes from overseas, keep remittance records, the contract and receipts matched to each other, since a lender or a future buyer may ask for them. Bank-specific remittance requirements follow the receiving bank's rules.

Risks during installments. If the developer delays or the project stalls, start with the contract and the remedies under PD 957, covered in stalled developer projects. For complaints, see filing a property complaint with DHSUD.

Step 5: The title transfer in four stops: BIR, treasurer, Registry of Deeds, assessor

The legal order is: pay taxes at the BIR and get the eCAR, pay the transfer tax and get a real property tax clearance from the local treasurer, register at the Registry of Deeds for a new title, then get a new tax declaration from the assessor. The basis is Section 58(E) of the Tax Code (NIRC): the Register of Deeds may not register any document transferring real property until the BIR has certified that the transfer was reported and any capital gains or creditable withholding tax was paid.

1. BIR, at the RDO where the property is. Based on the BIR capital gains tax page and documentary stamp tax page:

• Capital gains tax. The sale of Philippine real property held as a capital asset is taxed at 6%. The seller files BIR Form 1706 and pays within 30 days following the sale. Section 24(D)(1) of the NIRC bases the tax on the gross selling price or fair market value, whichever is higher. Ordinary assets, such as those held by developers or used in business, are taxed differently, as the BIR determines.
• Documentary stamp tax. Deeds of sale of real property are taxed on the consideration or fair market value, whichever is higher, which the BIR's rate table shows as 1.5% (NIRC Section 196). One-time transactions use BIR Form 2000-OT, filed and paid within 5 days after the close of the month in which the deed was signed.
• eCAR. Processed at the RDO covering the property. You first get an approved ONETT Computation Sheet (OCS). Mandatory documents include both parties' TINs, the notarized deed, a certified copy of the tax declaration from the assessor, a certified copy of the title and, for representatives, the SPA. After payment, you apply for the eCAR with the returns and proof of payment, the OCS and the transfer document. The BIR also offers the eONETT online system.
• A moving tax base. Section 18(a)(3) of RA 12001 tells the Commissioner of Internal Revenue to use the schedule of market values (SMV) or the actual selling price, whichever is higher. Section 29 says that until SMVs are updated, the BIR uses existing SMVs, zonal values or the actual price, whichever is highest. Which figure counts as fair market value follows the BIR's current practice.

2. Local treasurer. Section 135 of the Local Government Code, RA 7160, lets a province impose a transfer tax of up to 50% of 1% of the consideration, or of fair market value where the consideration is not substantial, whichever is higher. The seller must pay within 60 days of the deed's execution. The Register of Deeds and the assessor must see proof of payment before registering the deed or cancelling the old tax declaration, and notaries must send the treasurer a copy of the deed within 30 days of notarization. Section 151 lets cities set rates up to 50% above the provincial maximum. Quezon City's treasurer's page, for example, states a rate of up to 75% of 1%. Section 209(b) of the same Code requires the Register of Deeds to ask for a certificate that all real property taxes have been paid and allows it to refuse registration without one. Quezon City's tax clearance guide lists the latest tax declaration and latest tax receipt among the requirements, plus an SPA when the owner is overseas.

3. Registry of Deeds. The LRA FAQ lists the original deed, a certified copy of the latest tax declaration and the owner's copy of the title as basic requirements. Issuing a new title also needs the BIR CAR, the real property tax clearance and proof of transfer tax payment, and later transfers of a condominium title (CCT) need a Certificate of Management. PD 1529 Section 53 requires the owner's duplicate title with any voluntary instrument, and Section 57 has the registry issue a new title to the buyer and stamp the old one cancelled. You can estimate registration fees with the LRA's ERCF tool.

4. Assessor. Section 208 of RA 7160 requires the person transferring property to notify the assessor within 60 days. Quezon City's assessor's page lists transfers of ownership based on the new title among the reasons it issues tax declarations. Once updated, annual real property tax bills come to you; see property holding costs. The law names the taxpayer, but who actually bears each cost is often set in the contract, so spell it out. For condo turnover and the CCT, see condo turnover and title transfer.

The transfer passes through the BIR, the treasurer, the Registry of Deeds and the assessor, and a missing document at one stop blocks the next. Let Yixing turn your transfer documents and deadlines into one timeline →

Step 6: Turnover, condo management and 8 common mistakes

Turnover gives you possession and the transfer gives you ownership, so track them separately. After turnover you also move in formally and start paying dues and real property tax.

Turnover. Inspect the unit, list defects in writing, sign the acceptance papers and collect the keys, as described in the condo turnover guide. Moving in needs building permits, covered in condo move-in and move-out permits. Section 5 of the Condominium Act says a unit transfer includes the undivided interest in the common areas or, where applicable, membership or shares in the condominium corporation. What you buy is the unit plus that interest, so the house rules and dues come with it; see condo dues and parking.

Eight common mistakes:

1. Paying without a CTC. Relying on the seller's photocopy instead of the registry's certified copy and annotations.
2. Buying land through a nominee. Article XII, Section 7 of the Constitution bars foreigners from acquiring private land in their own name. The legal risks of nominee arrangements are in foreign ownership and the 60/40 rule.
3. Treating turnover as transfer. Having the keys while the title stays in the developer's name is common. PD 957 Section 25 requires the developer to deliver the title after full payment, so follow up.
4. An unregistered Contract to Sell. PD 957 Section 17 puts registration on the seller. Check the CTC yourself after paying for a while.
5. Missing statutory deadlines. Capital gains tax within 30 days of the sale, documentary stamp tax within 5 days after the month ends, transfer tax within 60 days of signing, and notice to the assessor within 60 days of transfer. Penalties follow BIR and local rules, and the eCAR, registration and tax declaration all stall together.
6. Foreign-signed documents without authentication. An SPA or deed signed abroad without an apostille or consular authentication will be returned by the BIR and the registry.
7. Special properties taken at face value. Foreclosed properties and assumed-balance deals carry extra steps; see buying foreclosed property and assume balance deals.
8. Expecting residency from a purchase. Buying property does not grant a visa. Long stays need a separate route; see does buying property give residency.

For a future resale, see how to sell property in the Philippines, and if you live abroad and need someone to look after the unit, see property management services.

This is a general guide to the process. Requirements and rates follow the current publications of the BIR, the LRA and your local government, and nothing here is legal or tax advice. For your specific case, consult a licensed lawyer and a tax professional.

From the first title check to a title in your own name there are ten steps, and none of them should rest on a verbal promise. Let Yixing follow your purchase from due diligence to the new tax declaration →