Deed of Absolute Sale (Philippines) – A Comprehensive Guide
Disclaimer: This article is for informational purposes only and is not legal advice. Laws, regulations, and administrative issuances may change; always consult a licensed Philippine lawyer or the appropriate government offices for specific concerns.
1. What Is a Deed of Absolute Sale?
A Deed of Absolute Sale (DOAS) is a written instrument that memorializes the outright, unconditional transfer of ownership of property from a seller (vendor) to a buyer (vendee) for a price certain in money or its equivalent.
- “Absolute” distinguishes it from conditional or installment sales—the transfer is final, with no suspensive or resolutory conditions remaining.
- It is most often used for real property (land, buildings, condominium units) but can likewise cover personal property (e.g., vehicles, equipment).
Although the Civil Code of the Philippines (Art. 1458 et seq.) recognizes that consent + object + price perfect a sale even orally, a DOAS is indispensable because:
- Registration with the Register of Deeds (RD) requires a notarized deed.
- Government agencies (BIR, LGU, LTO, etc.) will not process taxes, fees, or re-registration without it.
- It evidences warranties and allocates risk between the parties.
2. Legal Framework
| Area | Key Provisions / Issuances |
|---|---|
| Civil Code | Arts. 1458–1688 (law on sales), Arts. 1305–1317 (essential requisites of contracts), Arts. 1545–1560 (seller’s warranties), Arts. 1619–1637 (right of legal redemption, etc.) |
| Property Registration / Torrens System | Act 496, PD 1529 (Property Registration Decree), RA 11057 (RETA) |
| Taxation | NIRC (1997), as amended: · Capital Gains Tax § 24(D) (realty), § 34(C)(2) (personal), · Documentary Stamp Tax § 196, · Creditable/WHT § 57(A) |
| Local Government Code | §§ 135–136 (Transfer Tax), Real Property Tax clearance |
| Notarial Law | 2004 Rules on Notarial Practice |
| Special Laws | Agrarian Reform (CARP), RA 4726 (Condominium Act), RA 11213 (Estate Tax Amnesty), Foreign Ownership Restrictions – Constitution Art. XII § 7, Anti-Dummy Law |
3. Essential Elements of a Valid DOAS
- Consent – freely given by competent parties (capacity, authority of officers or attorneys-in-fact).
- Determinate Object – sufficiently described property (e.g., TCT/CCT no., lot/blk, area, boundaries).
- Price Certain in Money – total consideration or formula ascertainable without further agreement.
Failure of any element renders the deed void or voidable.
4. Standard Clauses & Typical Structure
| Clause | Purpose / Notes |
|---|---|
| Title / Header | “DEED OF ABSOLUTE SALE” or “DEED OF SALE OF REAL PROPERTY” |
| Parties | Full civil status, citizenship, residence, TIN; for married parties, indicate conjugal/ACP regime. Corporations state SEC registration & board authority. |
| Recitals (Whereas clauses) | Background facts: ownership, clean title, intent to sell. |
| Object Description | TCT/CCT no., survey plan, technical description, floor/unit no., fixtures included/excluded. |
| Consideration & Manner of Payment | Lump sum vs. installments (still absolute if title passes now), earnest money acknowledgment, VAT/withholding allocation. |
| Transfer of Ownership & Possession | Statement that upon signing/notarization full ownership passes; delivery of symbolic keys/owner’s duplicate title. |
| Warranties | · Ownership & peaceful possession (eviction), · Freedom from liens/encumbrances, · Hidden defect warranty (personalty). |
| Taxes & Expenses | Customary sharing – Seller: CGT, DST (sometimes shared), docs up to BIR; Buyer: Transfer Tax, registration fees, miscellaneous. Parties may vary. |
| Default & Remedies | Rare in an absolute sale (since complete), but may cover post-closing obligations. |
| Other Covenants | Vacancy, indemnity, compliance with zoning/AR clearance, non-foreign restriction. |
| Signatures | Seller(s) and Buyer(s), with marital consent if property is conjugal or community. |
| Acknowledgment | Notarial block with competent evidence of identity; notarization within territorial jurisdiction of the notary. |
| Attachments | Photocopies of IDs, TIN, Certificate Authorizing Registration (CAR) when re-stamping, board/partners’ resolutions, SPA, tax clearances. |
5. Notarization Requirements
- Personal Appearance before a duly commissioned Philippine notary public.
- Presentation of competent evidence of identity (IDs) under the 2004 Rules.
- Entry in the notarial register; deed gets a consecutive page & document no.
- Notary keeps one copy; parties receive notarized original & duplicates.
Notarization converts a private document into a public instrument, admissible in evidence without further proof and entitled to full faith and credit.
6. Transfer‐of‐Title Workflow for Real Property
| Stage | Where | Key Docs / Fees |
|---|---|---|
| A. Due Diligence | – | Certified true copy of TCT/CCT, RPT tax clearance, zoning certificate, HOA cert., DAR clearance (agri land), DENR (special cases), condo mgmt. dues. |
| B. Signing & Notarization | Notary | DOAS + IDs, SPA/board res. |
| C. BIR Tax Payment | BIR RDO where property is located | 1. CGT – 6 % of higher of (a) zonal value, (b) FMV per tax declaration, (c) selling price. 2. DST – 1.5 % of the same base. 3. Creditable WHT (if seller is corp.) Forms: BIR 1706 (CGT), 2000‐OT (DST). |
| D. Certificate Authorizing Registration (CAR) | BIR | Release of CAR, eCAR, stamped DOAS, tax receipts. |
| E. Local Transfer Tax | City/Municipal Treasurer | 0.5–0.75 % of tax base (province/city varies). |
| F. Registration of Deed & Issuance of New Title | Register of Deeds | Owner’s duplicate title, CAR/eCAR, RPT clearance, tax declaration, transfer tax receipt, original DOAS, RD fees (approx. 0.25 % + ITF). |
| G. New Tax Declaration | Assessor’s Office | Present new title; secure updated tax dec. |
| H. Post-Registration | – | Update HOA records, utility billing, annotate mortgage if needed. |
Timeline: Roughly 3–6 weeks in Metro Manila (longer in provinces or with estate/withholding issues).
7. Special Scenarios & Practical Issues
Property Regimes of Spouses
- Properties acquired during marriage are presumptively conjugal or community. Both spouses must sign, or provide a Special Power of Attorney (SPA).
- If judicial separation or property relations are modified, attach court decree or marriage settlement.
Corporations & Partnerships
- Board or partners’ resolution authorizing the sale and designating signatory.
- SEC registration, GIS, and Secretary’s Certificate commonly required by RD and BIR.
Co-Ownership & Heirs
- All co-owners/heirs (or their attorneys-in-fact) must sign, OR execute an Extrajudicial Settlement first, then sell as consolidated owners.
Foreign Nationals
- May not own land, except by hereditary succession. They may own condominium units up to the 40 % foreign equity limit under RA 4726.
Agricultural Lands
- DAR clearance (DAR Form CARP‐LDIS‐01) needed to ensure the land isn’t covered by CRA/CLT/EP.
- Retention limits (5 ha. for natural persons) and 10-year restrictions on CLOA lands apply.
Estate or Donated Property
- Check if the title is still in the decedent’s name—need settlement of estate and payment of estate tax (now 6 %).
- For donated property, ensure donor’s tax compliance.
Motor Vehicles
- Execute DOAS + LTO Deed of Sale of MV; secure CR / OR, PNP‐HPG clearance, emission test, insurance, process Transfer of Ownership at LTO district.
Installment Sale Already Paid Off
- Earlier Contract to Sell or Conditional Deed is replaced by a DOAS once final payment is made—effectively lifts the condition.
Electronic Titles (eTCT/eCCT)
- PD 1529 as amended allows digital titles; RD will print Owner’s Duplicate eTitle after registration.
8. Taxes & Cost Allocation – Industry Practice
| Cost Item | Typical Bearer | Notes |
|---|---|---|
| Capital Gains Tax (CGT) | Seller | Cannot legally be shifted to buyer vis-à-vis BIR, but parties may agree on price net of CGT. |
| Documentary Stamp Tax (DST) | Shared or Seller | Sometimes 50-50 to lighten seller; must be paid before CAR release. |
| Notarial Fee | Shared | Range: ₱1,000–₱5,000 or 1 % of selling price, depending on notary/law firm. |
| Broker’s Commission | Seller | Commonly 3–5 % of gross price for resale property. |
| Transfer Tax | Buyer | Paid at LGU within 60 days of notarization. |
| Registration Fee (RD) | Buyer | Graduated; roughly ₱8,000 –₱25,000 for mid-range properties. |
| Misc. (certified copies, etc.) | Buyer | Minimal (<₱2,000). data-preserve-html-node="true" |
9. Legal Remedies & Risks
- Breach of Warranties – Buyer may sue for rescission (acción rescisoria) or reduction of price (acción quanti minoris) within Art. 1546 periods.
- Unpaid Taxes – RD may refuse registration; BIR may impose surcharges/interest.
- Forgery / Falsification – A forged DOAS is void; innocent mortgagees may be protected under the Torrens system (Art. 1390 vs. PD 1529).
- Double Sale (Art. 1544) – First in registration in good faith prevails; if none, first possession; if none, first in time.
10. Drafting Tips & Best Practices
- Match technical description word-for-word with TCT/CCT; include metes and bounds.
- Require updated certified true copy of title (not older than 30 days).
- Stipulate a hold-over period for tenants or occupants, if any.
- Insert a tax-free clause if seller will shoulder all national taxes.
- Attach a color copy of the title’s last page showing RD certification.
- If price is paid via bank manager’s checks, list details and photo-reference numbers.
- For corporate sellers, quote the exact board resolution date, meeting quorum, and SEC registration no.
- Consider an indemnity clause against estate or inheritance claims.
- Agree on who will handle closing logistics—often a licensed land titling service or law firm.
- Keep scanned, signed PDFs plus the original SPRING-BOUND notarized sets in fireproof storage.
11. Frequently Asked Questions (FAQ)
| Q | A |
|---|---|
| Is notarization required for validity? | No. The sale is valid upon meeting Art. 1458 requisites. But notarization is essential for RD registration, without which the sale is not binding on third persons. |
| Can I use a foreign-notarized DOAS? | Generally no; Philippine property instruments must be notarized in the Philippines or consularized/apostilled then re-notarized via Rule 132, § 24. |
| How long do I have to register after notarization? | There is no strict statutory deadline, but transfer tax must be paid within 60 days and BIR may impose penalties if CAR is not processed within 30 days of DST payment. Prompt registration prevents double sales. |
| What if the seller is abroad? | Seller executes an SPA (consularized/apostilled) authorizing an attorney-in-fact to sign. The SPA is attached to the DOAS. |
| Does the 6 % CGT apply to personal property? | No. Personal property is subject to ordinary income tax / WHT or VAT if regular trade or business. A motor vehicle sale normally has no CGT but may incur DST under § 173. |
| Is e-signature allowed? | Not yet for land transfers; physical wet-ink signatures are required per RD practice. |
12. Distinguishing DOAS from Related Instruments
| Instrument | When Used | Main Difference |
|---|---|---|
| Contract to Sell | Buyer pays in installments; title retained by seller until full payment. | Ownership transfers only upon fulfillment of condition (full payment). |
| Conditional Deed of Sale | Like DOAS but subject to a suspensive condition (e.g., DAR clearance). | Sale not considered absolute until condition met. |
| Quitclaim / Waiver | Heir or tenant relinquishes rights. | No mutual obligations of sale. |
| Deed of Exchange (Barter) | Properties swapped. | No price in money; tax still based on FMV. |
| Option to Purchase | Buyer pays option money to keep offer open. | Not yet a sale; unilateral promise. |
13. Sample Skeleton (Real Property)
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
This Deed, made and executed in __________, Philippines, this ___ day of __________ 20__, by:
SELLER: ____________________________________, of legal age, Filipino, [single/married], with residence at ____________________________________ and TIN __________;
-and-
BUYER: ____________________________________, of legal age, Filipino, [single/married], with residence at ____________________________________ and TIN __________;
WITNESSETH, That:
1. SELLER is the absolute and registered owner of a parcel of land... (describe).
2. For and in consideration of the sum of PESOS: __________________ (₱_____________), Philippine Currency, receipt of which is hereby acknowledged in full, SELLER does hereby SELL, TRANSFER, and CONVEY, in a manner absolute and irrevocable, unto the BUYER, his/her heirs and assigns, the above-described property, together with all improvements thereon.
3. SELLER warrants to BUYER full ownership and freedom from all liens and encumbrances...
4. All capital gains tax, documentary stamp tax, and notarial fees shall be for the account of the SELLER, while transfer tax, registration fees, and miscellaneous expenses for the transfer of title shall be for the account of the BUYER.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands...
SIGNED IN THE PRESENCE OF: ________________________
ACKNOWLEDGMENT
(standard notary block)14. Checklist Before Closing
- ☐ Verify title authenticity at RD (microfilm/e-title).
- ☐ Secure tax declaration and unpaid RPT statement.
- ☐ Inspect actual physical boundaries; compare with plan.
- ☐ Obtain Zoning Certification; ensure permitted use.
- ☐ Confirm right-of-way or easement issues.
- ☐ Clear utilities and association dues.
- ☐ Compute total closing costs and who pays what.
- ☐ Prepare manager’s checks or PESONet transfer.
- ☐ Arrange simultaneous exchange: money ↔ notarized deed + keys + title.
15. Common Pitfalls
| Pitfall | Consequence | How to Avoid |
|---|---|---|
| Using outdated zonal value | Under-paid taxes → BIR penalties | Check latest revenue memorandum order (RMO) rates. |
| Signing without spousal consent | Voidable sale | Always require marriage certificate; secure SPA from absent spouse. |
| Failure to annotate prior mortgage cancellation | RD refuses registration | Present RD-issued “Cancellation of Entry” with DOAS. |
| Relying on photocopied title | Risk of fake title | Inspect owner’s duplicate; request CTC from RD. |
| Incomplete IDs/TINs | BIR rejects CAR application | Apply for TIN via BIR 1904 if needed. |
| Inadvertent sale of CARP-covered land | DAR revocation; criminal liability | Do CARPER LAD verification. |
16. Professional Fees & Timeline Estimate (Metro Manila, mid-range condo sale worth ₱8 million)
| Task | Who | Typical Fee | ETA |
|---|---|---|---|
| Notarization | Lawyer | ₱10,000 | 1 day |
| CGT/DST Filing | Title service | ₱7,000 | 3 days |
| BIR CAR Processing | – | – | 10-20 days |
| Transfer Tax | Runner | ₱3,000 | 1 day |
| RD Registration | Runner | ₱6,000 | 3 days |
| Condo HOA Update | Buyer's side | ₱2,000 | 1 day |
17. Emerging Developments
- eCAR Validation QR Code – New BIR eCARs feature QR verification to curb fraud.
- Online Title Verification – The Land Registration Authority (LRA) is expanding the Title Trace portal, allowing e-certified title copies in select RDs.
- Ease of Paying Taxes Act (RA 11994, 2024) – Streamlines tax filings; potential changes to CGT/DST deadlines once IRR is issued.
- E-Notarization Bill – Pending in Congress; will permit remote online notarization; not yet law.
18. Key Takeaways
- Accuracy, notarization, and timely tax compliance are mission-critical; any error triggers delays or voids.
- A DOAS does not, by itself, make you the registered owner—registration with the RD and issuance of a new title are indispensable.
- Allocate closing costs clearly in writing to avoid post-sale disputes.
- Conduct thorough due diligence—title, zoning, taxes, and possession—to protect against hidden liabilities.
- Seek professional guidance (lawyer, broker, accountant) for transactions involving large sums, special property types, or non-resident parties.
Prepared 3 July 2025 | Asia/Manila