Land Sale & Title Transfer for a Partial Lot in the Philippines – A Comprehensive Legal Guide
1. Why a “partial-lot” transaction is special
Selling “only a portion” of a titled parcel is perfectly legal, but it triggers additional land-use, survey, tax, and registration rules that do not apply when an entire lot is conveyed. The core reason is simple: Torrens titles show the exact technical description of the land; until that description is changed, the Registry of Deeds (ROD) has nothing to register. Hence, every partial-lot deal is first a subdivision exercise and only then a sale.
2. Statutory framework (key provisions)
| Instrument | Core provisions relevant to partial-lot transfers |
|---|---|
| Civil Code (Arts. 1305–1622) | General law on contracts and sales. |
| Property Registration Decree – PD 1529 | § 53 (subdivision/consolidation plans); § 57 et seq. (registration of deeds); § 103 (cancellation & issuance of new Transfer Certificates of Title – TCT). |
| Public Land Act – CA 141 & DENR Admin. Orders | Governs approved subdivision surveys for both public and private land. |
| NIRC of 1997 (Tax Code) | 6 % Capital Gains Tax, 1.5 % Documentary Stamp Tax, eCAR issuance. |
| Local Gov’t Code (RA 7160) | Local transfer tax (≤ 0.75 % of the higher of zonal value or consideration) and registration fees. |
| Agrarian Reform Law (RA 6657 as amended) | Retention limits (§ 6), DAR clearance for agricultural land. |
| RA 9646 (Real Estate Service Act) | Regulates professional surveyors/appraisers/brokers. |
| DHSUD/HUDCC & HLURB Issuances | Approval of subdivision plans for residential/commercial lots. |
3. Step-by-step process
| Phase | What happens | Key documents / government offices |
|---|---|---|
| A. Due diligence | Verify owner’s title (TCT/OCT), encumbrances (annotations, liens, agricultural/non-agricultural classification), existing right-of-way, zoning compliance. | Certified true copy of TCT (ROD), Tax Declaration (Assessor), updated real-property-tax clearance (Treasurer), zoning certificate (LGU). |
| B. Subdivision survey | A licensed geodetic engineer (LGE) conducts a relocation/subdivision survey, prepares a technical description for (i) the portion to be sold and (ii) the remainder. | Subdivision Plan – Psd-XXXXXXX (private survey), vicinity map, monograph, field notes. |
| C. Plan approval | Submit plan to DENR-LMB (or CENRO/PENRO) for verification & approval. If the property is inside a registered subdivision or a condominium project, HLURB/DHSUD approval may suffice. | Approved Subdivision Plan (blueprint & tracing cloth). |
| D. Regulatory clearances | • DAR clearance/CNC for agricultural land | |
| • Barangay clearance | ||
| • BIR “No Capital Gains Tax” certification for certain tax-exempt transfers (rare for sales). | DAR, Barangay, BIR. | |
| E. Contract execution | Parties sign a Deed of Absolute Sale (Portion of Lot), stating (1) consideration, (2) area per approved plan, (3) exact technical description, (4) warranties under Art. 1545 et seq. Civil Code. Instrument must be notarised in the province/city where executed (Rule II, 2004 Notarial Rules). | Notarised Deed of Sale; IDs of parties; SPA if via attorney-in-fact. |
| F. Tax assessment & payment | Within 30 days from notarisation: |
- File BIR Form 1706 (CGT) – 6 % of higher of zonal value or gross selling price
- File BIR Form 2000-OT (DST) – 1.5 %
- Secure Electronic Certificate Authorizing Registration (eCAR). | BIR Revenue District; zonal valuation table; eCAR. |
| G. Local transfer tax | Pay at City/Municipal Treasurer within the period fixed by LGU; usually 0.5–0.75 %. | Official Receipt; Tax Clearance. |
| H. Registration at ROD | Present: (i) Owner’s duplicate title, (ii) Deed of Sale, (iii) Approved Subdivision Plan, (iv) eCAR, (v) Transfer-tax OR, (vi) ROD fees.
ROD cancels the parent title and issues:
• New TCT in the buyer’s name for the carved-out lot (Lot 1-A, etc.).
• New TCT in the seller’s name for the remainder (Lot 1-B). | Registry of Deeds. | | I. Assessor update | Both parties file for new Tax Declarations (TD) and pay real-property tax (RPT) based on the prorated assessed value. | City/Municipal Assessor & Treasurer. |
4. Typical timeline & indicative costs
(Metro Manila example; provincial LGUs may be lower)
| Item | Working days | Typical cost range |
|---|---|---|
| Subdivision survey & plan | 20–45 | ₱ 15 000 – 50 000 (area-, terrain-, and coordinate-dependent) |
| Plan approval (DENR) | 15–30 | Filing fees ₱ 1 000 + |
| Taxes (CGT + DST + local) | N/A | ~ 8 % of BIR zonal value / selling price |
| Registration fees | 5–10 | ~ 0.25 % + ₱ 1 500 misc. |
| New Tax Declaration | 3–5 | ₱ 500 – 1 500 |
| Total duration | 45–120 working days |
5. Special issues & pitfalls
- “Sale of an undivided portion” – strictly void as to the transfer of title, even if valid inter partes (Art. 1623, Civil Code), because ROD cannot register a deed that refers to “an area to be segregated later.”
- Foreign buyers – land ownership is limited to Filipinos and 40 %-maximum foreign equity in corporations (Art. XII, § 7, Constitution). Foreigners may lease (RA 7652) or buy condominium units (RA 4726).
- Right-of-way – after subdivision, the remainder lot’s access might be landlocked. Art. 649, Civil Code grants a compulsory easement but expect neighbor disputes.
- Agri-land retention & DAR conversion – a landowner left with ≤ 5 ha. need not secure CARP retention authority; otherwise, DAR will withhold clearance.
- Estate or co-ownership – heirs must execute an Extrajudicial Settlement (EJS) or Partition Agreement before any partial sale. EJS itself must be registered and published (Rule 74, Rules of Court).
- Mortgage/encumbrance – the consent of the mortgagee is indispensable, and the bank will insist on re-collateralizing the new titles.
- Overlapping surveys – DENR may reject a subdivision plan if the parcel’s technical boundary conflicts with the public Land Survey Data Library (LSD).
- Zonal valuation mismatch – if the BIR’s zonal value is outdated and higher than actual market, sellers sometimes structure consideration as “higher of zonal or fair-market” to avoid price misdeclaration charges but still trigger the correct tax base.
6. Forms & drafting notes
- Deed caption: “DEED OF ABSOLUTE SALE (Portion of Lot No. ___ covered by TCT No. _____)”
- Whereas clauses should reference the DENR-approved plan number (“Psd-05-012345, approved 12 March 2025”).
- Technical description must be reproduced verbatim and attached as “Annex A”.
- Habendum clause: “…hereby SELL, TRANSFER, and CONVEY, absolutely and unconditionally, unto the VENDEE, his heirs and assigns, the land described in Annex A…”
- Authority to subdivide given in the deed if the sale precedes plan approval (rare; ROD will still wait for the approved plan).
- Acknowledgment must identify the notarial place and competent evidence of identity (IDs/passports), conforming to § 12, 2004 Notarial Rules.
7. Frequently asked questions
| Question | Short answer |
|---|---|
| Can I pay the full price before the subdivision plan is approved? | Yes, but hold it in escrow or use a contract to sell; full transfer cannot be registered until plan approval. |
| Is eCAR now electronic? | Yes. As of 2023, BIR generates a QR-coded eCAR; ROD accepts only print-outs verified online. |
| What if the parties change minds midway? | Register a Deed of Cancellation; taxes already paid are non-refundable (BIR). |
| Are VAT and withholding tax due? | VAT applies only if the seller is in the ordinary course of trade (developer). Creditable withholding tax substitutes CGT if seller is a corporation. |
| Can buyer consolidate later with an adjoining lot? | Yes – file a consolidation-subdivision plan under § 53, PD 1529, then petition ROD for new titles. |
8. Practical tips
- Insist on LRA-certified blueprints. Photocopied plans often bear blurred bearings; ROD rejects illegible technical descriptions.
- Pay taxes early. BIR surcharges (25 % penalty + 12 % interest p.a.) run from the 31st day after notarisation.
- Use escrow for balance-of-price release. Banks normally trigger release upon presentation of buyer’s TCT or ROD “Claim Stub.”
- Always secure the owner’s duplicate title. ROD will require surrender of the physical copy before cancellation.
- Record the real-property tax clearance on both old and new titles to avoid double assessments.
9. Conclusion
A partial-lot sale is a hybrid of conveyancing and land-use regulation. The heart of the transaction is the subdivision survey—without it, registration is legally impossible. Once the plan is approved, the conveyance proceeds like an ordinary sale, but special attention must be paid to taxes, agricultural-land restrictions, and easements. By following the statutory steps and timelines outlined above—and by engaging competent geodetic engineers, lawyers, and brokers—parties can transfer a portion of land with full Torrens protection, safeguard their tax positions, and avoid the costly errors that plague many Philippine real-estate deals.