This article provides a comprehensive yet practical guide to the fundamental legal principles governing the acquisition, disposition, and transfer of real property in the Philippines. It is written primarily for buyers, sellers, investors, heirs, and practitioners who need a clear understanding of the rules under Philippine law as of 2025. The discussion covers constitutional restrictions, the Torrens system, taxes, required documents, common modes of transfer, and key statutes.

I. Constitutional and Statutory Restrictions on Land Ownership

Filipino-First Policy (1987 Constitution, Art. XII, Sec. 7 & 8; Art. XVI, Sec. 11)
- Private land may be owned only by Filipino citizens or by corporations/ associations at least 60% Filipino-owned.
- Foreigners are absolutely prohibited from owning private land, except:
  (a) by hereditary succession (inheritance from a Filipino relative), or
  (b) former natural-born Filipinos may acquire up to 5,000 sqm urban or 3 hectares rural land for residential purposes (RA 8179 amending RA 7042 as amended by RA 11659 [Batas Pambansa Blg. 185] and RA 9225 dual citizenship law).
- Foreigners may own buildings and improvements on land but not the land itself (lease up to 50 years, renewable for 25 years under RA 7652 Investor’s Lease Act).
Condominium Ownership (RA 4726, as amended)
- Foreigners and foreign corporations may own condominium units provided total foreign-owned units do not exceed 40% of the total units in the project.
Agricultural Land Restrictions
- Only Filipino citizens or corporations 60% Filipino-owned may own agricultural land (maximum 12 hectares for individuals, 1,024 hectares for corporations under RA 11701 [2022 amendment]).
- Lands covered by the Comprehensive Agrarian Reform Program (CARP/CARPER, RA 6657 as amended by RA 9700) are generally non-transferable except to qualified farmer-beneficiaries or through approved exemptions.

II. The Torrens System of Land Registration (Presidential Decree No. 1529)

The Philippines follows the Torrens system: a certificate of title is conclusive evidence of ownership against the whole world once registered with the Register of Deeds (RD) and the Land Registration Authority (LRA).

Types of titles:

Original Certificate of Title (OCT) – issued upon first registration (judicial or administrative).
Transfer Certificate of Title (TCT) – issued upon every subsequent transfer.
Condominium Certificate of Title (CCT) – for condominium units.

A clean title is one that is:

free from liens and encumbrances (except legal easements and taxes),
in the name of the seller,
with technical description matching the approved survey plan, and
with realty taxes paid and updated.

III. Due Diligence Before Buying

Every buyer must conduct thorough due diligence to avoid annulment, double sale, or forgery issues.

Mandatory checks:

Certified true copy of title from the Register of Deeds (not just photocopy).
LRA Title Verification (online via LRA eSerbisyo portal or in person).
Certified true copy of Tax Declaration from the City/Municipal Assessor.
DENR/LRA verification that the land is alienable and disposable (for untitled or originally public land).
Certification from the Assessor that real property taxes are updated.
HLURB/DHSUD License to Sell (for subdivision and condominium projects under PD 957 and RA 6552 Maceda Law).
DAR Conversion Order or Exemption/Exclusion Clearance if the land was formerly agricultural.
Community Tax Certificate (Cedula) and valid IDs of seller.
Verification with barangay and neighbors (optional but highly recommended).
Title search for the last 30–50 years to check for adverse claims, lis pendens, or mortgages.

IV. Modes of Acquiring/Transferring Ownership of Real Property

A. Sale (Most Common)
B. Donation
C. Succession/Inheritance
D. Adverse Possession (Extraordinary Acquisitive Prescription – 30 years; Ordinary – 10 years with just title and good faith)
E. Execution Sale (foreclosure or levy)
F. Tax Sale
G. Reclamation or Accretion (rare)

V. Sale of Real Property: Step-by-Step Procedure

Negotiation and Reservation (optional)
- Reservation agreement + earnest money (option money).
Execution of Contract to Sell or Deed of Conditional Sale (common in developer sales)
- Ownership remains with seller until full payment.
- Governed by RA 6552 (Maceda Law) for subdivision/condominium buyers:
  - If buyer has paid at least 2 years of installments → entitled to 50% refund + 5% per year after the 5th year if contract is cancelled.
  - Grace period of 60 days per year of installment paid.
Execution of Deed of Absolute Sale (DOAS)
- Must be in a public instrument (notarized) for validity of transfer (Art. 1358 Civil Code is directory, but registration requires notarization).
- Contents: full names, marital status, complete description, consideration, warranties.

Payment of Taxes and Fees (within 60 days from notarization to avoid penalties)

Tax/Fee	Rate/Base	Paid By (Customary)	Legal Basis
Capital Gains Tax (CGT)	6% of gross selling price or BIR zonal value/fair market value, whichever is higher	Seller	Sec. 24(D), Tax Code as amended by TRAIN Law
Documentary Stamp Tax (DST)	1.5% of same base as CGT	Buyer	Sec. 196, Tax Code
Transfer Tax (Local)	0.5% (provincial) + 0.25%–0.75% (municipal/city) of same base	Buyer	Local Government Code
Registration Fee	0.25%–1% depending on value (LRA schedule)	Buyer	PD 1529
IT Fee, Science Stamp, Legal Research Fee	Fixed nominal amounts	Buyer	Various

Issuance of CAR (Certificate Authorizing Registration) by BIR after payment of CGT/DST.
Submission to Register of Deeds:
- DOAS (original + copies)
- Owner’s duplicate TCT/OCT
- CAR
- Transfer tax receipt
- Current tax declaration/reality tax clearance
- Condominium certificate (if applicable)
Annotation of sale and cancellation of old title → issuance of new TCT in buyer’s name (15–90 days depending on RD backlog).
Issuance of new Tax Declaration in buyer’s name at Assessor’s Office.

VI. Donation of Real Property

Requirements:

Deed of Donation (notarized public instrument).
Acceptance by donee (in the same deed or separate notarized instrument).
Payment of Donor’s Tax:
- To strangers: 6% of value (TRAIN Law).
- To relatives (up to 4th civil degree): exempt up to ₱250,000 net donation per year (RA 10963).
DST 1.5% still applies.
Registration same as sale, but CAR is issued upon payment of donor’s tax.

VII. Transfer Through Succession/Inheritance

Intestate or Testate Succession (Civil Code provisions).
Extrajudicial Settlement of Estate (EJS) – if no debts, no will, all heirs agree (Rule 74, Rules of Court).
- Publish once a week for 3 consecutive weeks.
- Pay estate tax (6% of net estate under TRAIN Law) within 1 year from death.
- Register EJS + bond (if required) → new titles issued in heirs’ names.
Judicial Settlement – required if there is disagreement, will, or debts.

VIII. Common Pitfalls and How to Avoid Them

Double sale (Art. 1544 Civil Code): first registrant in good faith prevails.
Forged titles: always verify with RD and LRA.
Mortgage/lien not cancelled: demand cancellation before payment.
Spouses’ consent: property under absolute community or conjugal partnership requires both spouses’ consent (Family Code).
Minor or incapacitated sellers: court approval required.

IX. Role of Real Estate Brokers and Salespersons

Must be licensed by the Professional Regulation Commission (PRC) under RA 9646 (Real Estate Service Act – RESA). Unlicensed brokers have no right to commission and may be criminally liable.

X. Recent Developments (as of 2025)

RA 11573 (2021) improved the ease of paying real property taxes and obtaining title certifications digitally.
DHSUD has strengthened enforcement of balanced housing compliance (20% requirement under UDHA).
BIR Revenue Regulations continue to update zonal values every 3–5 years, significantly affecting CGT/DST computation.

This guide covers the essential framework. For complex transactions (corporate shares used to control land-owning corporations, leasehold rights, usufruct, or litigation involving titles), consultation with a licensed real estate lawyer and/or notary public remains indispensable.