Certified True Copy of TCT: A Key Document for Capital Gains Tax Filings in the Philippines
(A comprehensive legal overview as of 30 April 2025)
1. Why the BIR Demands a Certified True Copy (CTC) of the TCT
Statutory Basis
- Section 24(D) of the National Internal Revenue Code (NIRC) imposes the 6 % Capital Gains Tax (CGT) on the sale, exchange, or other disposition of real property located in the Philippines.
- To enforce that tax, the Bureau of Internal Revenue (BIR) issues a Certificate Authorizing Registration (CAR) only after verifying that the title offered for transfer is genuine and current.
- Revenue Regulations (RR) 13-99, RR 14-99, RR 4-2019 and the consolidated One-Time Transactions (ONETT) Checklist all list a “Certified True Copy of the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)” as a mandatory attachment to the CGT return (BIR Form 1706) and the Documentary Stamp Tax return (BIR Form 2000).
Evidentiary Value
- A CTC issued by the Registry of Deeds (RD) carries the presumption of regularity under the Property Registration Decree (PD 1529).
- It assures the BIR that (a) the seller actually owns the property, (b) there are no un-annotated liens, and (c) the technical description used for valuation is accurate.
Chain-of-Title Reconciliation
- The BIR cross-checks the CTC against the Owner’s Duplicate Certificate presented by the taxpayer. Any variance (e.g., missing encumbrance, different lot area) is a red flag that halts CAR processing.
2. Obtaining a CTC of the TCT
| Step | Action | Practical Tips | Fees & Timing* |
|---|---|---|---|
| 1 | Prepare a written request (BIR-form letter or handwritten) addressed to the RD. | State the TCT number, lot number, location, and purpose: “for BIR CGT filing.” | |
| 2 | Photocopy a government-issued ID of the requester (seller, buyer, or authorized representative). | If a representative, attach a notarized SPA. | |
| 3 | Go to the RD where the property is registered. | Bring the Owner’s Duplicate if available; some RD offices scan it for comparison. | |
| 4 | Pay the legal research & certification fees. | Typical cost: ₱230–₱450 per copy depending on province/city. | OR # & machine-validated official receipt issued on the spot. |
| 5 | RD Officer prints or photocopies every page of the original title in their vault, affixes the “CERTIFIED TRUE COPY” stamp, signs, and dry-seals. | Check that all back-page annotations (mortgages, liens, CAR number if previously sold) are captured. | Processing: same day to 3 business days (busy registries can stretch to a week). |
*Fees are set under the Revised Schedule of Fees of the Land Registration Authority (LRA) and local ordinances; always compute per page.
Shelf Life: Most BIR Revenue District Offices (RDOs) insist on a CTC issued not more than 6 months before filing. A few RDOs reduce this to 3 months if zonal values in the locality are mid-revision, so obtain fresh copies shortly before you execute the Deed of Sale.
3. How Many Copies and Who Keeps Them
| Recipient | Purpose | Copy Count (common practice) |
|---|---|---|
| BIR ONETT counter | Evaluation for CGT & DST; retained for audit trail. | 1 |
| Buyer’s file | Reference for payment of transfer taxes & later registration. | 1 |
| Registry of Deeds (upon registration) | Attachment to CAR and tax clearances when issuing a new TCT. | 1 |
| Mortgagee / Bank (if applicable) | Collateral verification prior to loan release. | 1 |
Some practitioners prepare two spare copies to avoid return trips should an assessor or local treasurer unexpectedly ask for their own set.
4. Connection to Other Taxes and Clearances
- Documentary Stamp Tax (DST). Paid simultaneously with CGT. The CTC proves property classification and encumbrances that can alter DST liability.
- Withholding Tax (if seller is a corporation). Even when the transaction is subject to Creditable Withholding Tax (CWT) instead of CGT, the CTC is still required because RR 2-98 cross-references the ONETT checklist.
- Estate Tax. If the property was inherited and the estate tax return is being filed, the executor submits a CTC of the decedent’s TCT plus one of the “re-issued title in the heirs’ name” after settlement.
- Local Transfer Tax & Real Property Tax (RPT) Clearance. Treasurers compare the TCT CTC with their tax declaration records to confirm classification (residential, commercial, agricultural).
5. Frequently Asked Questions
- Is an electronic copy (eTCT) from the LRA’s e-Title system acceptable?
- Not yet. As of April 2025, the BIR requires the physical, dry-sealed CTC. RMC 51-2023 only allows eTCT in intra-agency exchanges.
- What if the Owner’s Duplicate Certificate is lost?
- You may still pay CGT, but the Registry of Deeds will refuse registration of the Deed of Sale until you secure a Second Owner’s Duplicate via a court-sanctioned re-issuance (Sec. 109, PD 1529). The CTC, however, remains obtainable and must still be attached to the CGT filing.
- Can an un-updated TCT (e.g., still in the name of grandparents) be used?
- The BIR will accept it only in an estate tax context. If there was an unregistered sale in the chain, the latest recorded owner must first register the historical conveyance or undergo extra judicial settlement before the BIR processes the new CGT.
- Does a tax-free exchange under Section 40(C)(2) need a CTC?
- Yes. Even when the transfer is exempt from CGT, the issuing of a CAR for registration demands the same title authentication.
6. Common Pitfalls and How to Avoid Them
| Pitfall | Effect | Preventive Measure |
|---|---|---|
| Out-of-date CTC | BIR assessment letter; possible surcharge or interest if CGT window lapses during refiling. | Secure CTC within 30 days before notarizing the deed. |
| Illegible or incomplete copies | CAR release on hold. | Before leaving the RD window, inspect that every page, annotation, & barcode is readable. |
| Wrong lot/blk numbers due to subdivision | BIR uses incorrect zonal value; later dispute with assessor. | Compare CTC’s technical description with latest tax declaration and approved subdivision plan (APS). |
| Missing encumbrance cancellation | Lender refuses to accept title; BIR may question seller’s capacity to sell. | Ensure previous mortgages are duly annotated as “cancelled” before sale. |
| Reliance on photocopies “certified” by a notary | Automatically rejected by RD & BIR. | Only RD-issued certifications are valid. |
7. Timeline for a Standard Capital Gains Tax Workflow
- Day 0 – Deed of Absolute Sale (DOAS) notarized.
- Day 0–30 – CGT payment window (BIR Form 1706 plus attachments including CTC of TCT). Surcharge (25 %) and interest (12 % p.a.) apply if late.
- Within the same visit or +1-5 working days – BIR ONETT evaluates and issues Payment Form & Authority to Accept Payment (AAP).
- After taxes paid – BIR releases eCAR (electronic CAR) in 5–20 working days; CTC stays in BIR file.
- Registration at RD – Submit eCAR, tax clearances, and another CTC of the seller’s title; RD cancels old TCT and prints new TCT in buyer’s name.
8. Special Situations
- Sale of Undivided Shares. Each co-owner must provide an individual SPA and the CTC of the common title; the BIR may ask for separate CTCs for each annotation page that shows the co-ownership.
- Section 118 (Tax-Free Mergers). Although exempt from CGT, RR 23-2020 still requires a CTC to confirm the real property’s book value for VAT purposes.
- Foreclosure Sales. The sheriff’s certificate is filed together with a fresh CTC; the 6 % CGT is computed on the auction bid price or FMV, whichever is higher.
9. Best Practices Checklist for Practitioners
- Order at least two CTCs the same day you request the RD certified tax-declaration printouts.
- Staple the official RD receipt to the last page; some RDOs return submissions missing the proof of payment.
- Scan and archive the CTC before giving it to the BIR; eCAR re-issuance often requires a copy if the file is misplaced.
- Coordinate with both LGU and BIR on acceptable “freshness” of the CTC; policies differ slightly per region.
- Attach a cover sheet listing all enclosures, including the CTC, to expedite ONETT queue screening.
10. Conclusion
A Certified True Copy of the Transfer Certificate of Title is not a mere formality. It anchors the BIR’s authority to tax, protects buyers and lenders, and keeps the Torrens system’s indefeasibility intact. For taxpayers and counsel alike, mastering the nuances of securing and presenting a CTC—its validity period, content integrity, and coordination with parallel documentary requirements—translates directly into faster CAR issuance, lower penalties, and a trouble-free transfer of ownership.