FAQs
Frequently Asked Questions
Here’s a collection of the most frequently asked questions our team has encountered over the years:
CHECKING IF A PROPERTY IS SAFE TO BUY
How do you verify if a property title is real or fake?
You can request a Certified True Copy of the Title from the Registry of Deeds.
Check the title to make sure the owner’s name, property details, lot area, and other information match the documents presented by the seller.
It’s also important to check the title for mortgages, liens, adverse claims, or other annotations.
Before buying, don’t rely only on a photocopy of the title provided by the seller. Proper due diligence is important.
Can a mortgaged property be sold?
Yes. A property with an existing mortgage can still be sold, but the outstanding loan and mortgage need to be properly handled.
The seller usually coordinates with the bank to determine the remaining balance and the requirements for releasing the mortgage.
The buyer should also be informed that the property has an existing mortgage before proceeding with the purchase.
Can a property with unpaid real property tax be sold?
The property may still be offered for sale, but unpaid real property taxes need to be addressed.
The buyer and seller should agree on who will settle the outstanding taxes. These unpaid amounts may also cause delays in the transfer process. The seller won’t be able to obtain a tax clearance for the property without settling the unpaid amount and the due diligence documentswon’t be complete unless the tax clearance is onhand.
It’s always better to check the property’s tax records before finalizing the sale.
Can foreigners buy property in the Philippines?
Yes, but there are restrictions.
Generally, foreigners cannot directly own land in the Philippines, subject to the exceptions allowed by the Constitution.
Foreigners can own condominium units, provided the ownership stays within the limits allowed by Philippine law.
The rules are different for land, condominiums, and other types of property, so it’s best to check the requirements before purchasing.
Selling your property in the Philippines
What taxes do I pay when selling a real estate property?
The taxes depend on the property and the seller.
For properties classified as capital assets, Capital Gains Tax (CGT) is generally 6% based on the applicable tax base under Philippine tax rules.
There may also be Documentary Stamp Tax, Transfer Tax, registration fees, and other charges.
Who pays each tax or fee is usually agreed upon by the buyer and seller and stated in their agreement.
What documents are needed to sell a house?
Some of the commonly required documents are:
Owner’s duplicate of title
Certified True Copy of Title
Latest Tax Declaration
Real Property Tax receipts
Tax Clearance
Valid IDs of the seller & buyer
TIN with updated information of both the buyer and seller
Marriage Certificate, if applicable
Deed of Absolute Sale
Special Power of Attorney, if someone is representing either the buyer or the owner
For inherited properties, additional documents such as the Death Certificate and Extrajudicial Settlement of Estate may be needed.
What is a Special Power of Attorney for selling or buying property?
A Special Power of Attorney (SPA) allows someone to act on behalf of the property owner for specific purposes.
For example, if the owner is abroad or cannot personally handle the transaction, they may authorize a representative to sign certain documents or process the sale.
The SPA should clearly state what the representative is allowed to do.
Can I sell my property while I'm abroad and not have to fly back to the Philippines for the process?
Yes, you can legally sell your property in the Philippines without flying back. You must execute a Special Power of Attorney (SPA) naming a trusted representative or licensed broker as your attorney-in-fact, and have it notarized and Apostilled (or consularized) through the Philippine Embassy or Consulate in your host country.
The Process of Selling From Abroad:
1. Appoint a Representative
– Choose a relative, trusted friend, or licensed real estate broker in the Philippines to sign documents, negotiate, and handle transactions on your behalf.
2. Draft and Authenticate the SPA
– Explicitly state the power to sell the specific property in the SPA. Sign it physically in front of a consular officer at the nearest Philippine Embassy or Consulate, or secure an Apostille if your current country is part of the Apostille Convention.
3. Dispatch Physical Documents
– Mail the original, authenticated SPA, along with property titles, tax declarations, and valid IDs, to your attorney-in-fact in the Philippines.
4. Local Closing and Taxes
– Your representative will sign the Deed of Sale, settle local taxes (like Capital Gains Tax and Documentary Stamp Tax) with the Bureau of Internal Revenue (BIR), and process the title transfer at the Land Registration Authority Registry of Deeds.
Transfer of Ownership of Properties
How do you transfer a property title in the Philippines?
For a typical sale, the process usually involves:
Signing the Deed of Absolute Sale.
Paying the required taxes with the BIR.
Getting the BIR Certificate Authorizing Registration (eCAR).
Paying the transfer tax.
Submitting the documents to the Registry of Deeds.
Processing the new title under the buyer’s name.
Updating the Tax Declaration.
The actual requirements may be different depending on the type of transaction and the property’s documents.
How long does the title transfer take?
It depends on the property and whether the documents are complete.
A straightforward sale can be processed more quickly, while properties with unpaid taxes, mortgages, multiple owners, deceased owners, or title issues can take longer.
Since the process involves the BIR, local government, and Registry of Deeds, it’s best to check the documents first before giving an exact timeline.
What is the difference between a Deed of Sale and a Contract to Sell?
A Contract to Sell contains the agreement and conditions between the buyer and seller. It is commonly used when certain conditions, such as full payment, still need to be completed.
A Deed of Absolute Sale is generally signed when the conditions of the sale have been fulfilled and is used to document the transfer of ownership.
The terms of the actual agreement should always be checked because every transaction can be structured differently.
What to do if a property owner has passed away
Can a property be sold if the owner is already deceased?
Yes, but there are additional steps. Since the registered owner is already deceased, the property first needs to go through estate settlement.
If the heirs agree and the requirements are met, they may execute an Extrajudicial Settlement of Estate (EJS). Estate taxes and other required documents also need to be processed before the property can be properly transferred or sold.
If there are several heirs, all heirs who have rights to the property should be properly identified and involved in the transaction.
What is an Extrajudicial Settlement of Estate?
An Extrajudicial Settlement of Estate is a legal document used by the heirs to settle the properties left by a deceased family member without going through a court case, when allowed under Philippine law.
It identifies the heirs and the properties included in the estate. This is commonly needed when a property is still registered under the name of someone who has already passed away.
Can inherited property be sold?
Yes. However, if the property was inherited from a deceased parent or relative, the heirs need to establish their legal rights to the property first.
If there are several heirs, their respective rights and shares need to be settled through an Extrajudicial Settlement of Estate or a Judicial settlement in court if there is a written will by the deceased.
Estate taxes and other transfer requirements must also be taken care of before the property can be transferred.
What happens if one heir refuses to sign?
If there are several heirs, one heir generally cannot simply be left out when selling the entire property.
If one heir does not agree to the sale, the other heirs cannot normally sell that heir’s share without proper legal authority.
The heirs may first try to reach an agreement. If they cannot agree, legal advice may be needed to determine the proper way to proceed.
Can inherited property be sold? What does the process look like?
Yes. However, if the property was inherited from a deceased parent or relative, the heirs need to establish their legal rights to the property first.
If there are several heirs, their respective rights and shares need to be settled through an Extrajudicial Settlement of Estate or a Judicial settlement in court if there is a written will by the deceased.
Estate taxes and other transfer requirements must also be taken care of before the property can be transferred.
Selling inherited property usually involves more steps than selling a property owned by a living individual.
The general process is:
1. Check the title and property documents
Make sure the property details and registered owner are verified.
2. Identify the legal heirs
Gather the Death Certificate and documents showing who the heirs are.
3. Settle the estate
An Extrajudicial Settlement may be prepared if the requirements are met.
4. Process the estate tax and other requirements
The estate’s tax obligations need to be settled with the BIR.
5. Complete the title and transfer requirements
The necessary documents are submitted to the appropriate government offices.
6. Sell the property
Once the heirs have the legal authority to sell, the property can proceed to the buyer.
7. Process the sale and transfer
The applicable taxes are paid, the BIR requirements are completed, and the title is eventually transferred to the buyer.
The process can take longer if there are multiple heirs, missing documents, unpaid taxes, mortgages, or disagreements among the heirs.
Need Help Buying, Selling, or Transferring a Property?
If you’re planning to sell an inherited property, settle an estate, transfer a title, or deal with missing property documents, you don’t have to figure everything out on your own.
We can help you assess your documents, guide you through the process, and coordinate the requirements needed to move your transaction forward. Get in touch with us to discuss your property.