Property Transfer by Deed of Absolute Sale and Special Power of Attorney (SPA) in the Philippines
A practitioner‑focused guide to every major legal, tax, and procedural aspect
1. Why this topic matters
Real estate is the single most valuable asset class in the Philippines. Whether you are a buyer, seller, heir, attorney‑in‑fact, lender, broker, or notary public, a clear grasp of (a) the Deed of Absolute Sale (DOAS) that conveys ownership and (b) the Special Power of Attorney (SPA) that often makes the conveyance possible is essential. Errors here can void a sale, expose parties to tax penalties, or leave titles untransferable for years.
2. Core concepts and terminology
| Term | Meaning | Statutory roots |
|---|---|---|
| Deed of Absolute Sale | A bilateral, onerous contract by which the seller permanently transfers ownership of immovable property to the buyer for a stated price. | Art. 1458 & 1477, Civil Code; Art. 1358 (public instrument requirement); Art. 1874 (public instrument + registration for real property ≥ ₱500). |
| Special Power of Attorney (SPA) | A notarized written mandate giving an attorney‑in‑fact express authority to perform specified acts—e.g., “to sell Lot 5, Block 3 covered by TCT No. 12345 and sign the deed.” | Art. 1878, Civil Code (enumerates acts that must be covered by an SPA); 2004 Rules on Notarial Practice; Apostille Convention (when executed abroad). |
| Certificate Authorizing Registration (CAR / eCAR) | BIR clearance confirming that all national taxes due on the transfer have been paid; a prerequisite to registration with the Registry of Deeds (RD). | National Internal Revenue Code (NIRC) as amended; BIR Revenue Regs. 13‑99, 19‑21, etc. |
| Transfer Certificate of Title (TCT) / Condominium Certificate of Title (CCT) | The Torrens title issued in the new owner’s name once the deed is registered. | Property Registration Decree (PD 1529). |
3. Legal foundations
Civil Code of the Philippines
- Art. 1318 – Elements of a valid contract (consent, object, cause).
- Art. 1458‑1470 – Law on sales.
- Art. 1874 – Sale of real property must appear in a public instrument and be registered to affect third persons.
- Art. 1878 – Acts requiring an SPA (sale, mortgage, lease > 1 year, etc.).
Property Registration Decree (PD 1529) – Torrens system rules; ownership transfers only upon RD registration.
NIRC (as amended by the TRAIN Law, RA 10963) – Capital Gains Tax, Documentary Stamp Tax, expanded withholding rules, and eCAR issuance.
Local Government Code (RA 7160) – Transfer tax (province/city max 0.50 % of price or FMV).
Rules on Notarial Practice (A.M. 02‑8‑13‑SC) – Valid notarization is indispensable; an unnotarized deed cannot be registered.
4. Deed of Absolute Sale: substance and form
4.1 Essential clauses
- Parties – full civil statuses, nationalities, TINs; include spouses for conjugal or community property.
- Authority – recite SPA or board resolution if a representative signs.
- Description of property – lot/cadastre data, boundaries, area, registered title number, tax declaration number, existing liens.
- Consideration & payment terms – amount (words and figures), mode (cash, check, bank transfer), receipt clause.
- Warranties – ownership and freedom from liens/encumbrances except those disclosed.
- Turn‑over / delivery – physical and constructive (keys, tax declarations, original TCT).
- Taxes & expenses – customary allocation: seller–CGT/DST; buyer–transfer tax/RD fees, unless agreed otherwise.
- Registration undertaking – cooperation clause for BIR/RD processing.
- Dispute resolution & venue – often the courts where property is located.
4.2 Formalities checklist
| Requirement | Why & When |
|---|---|
| Notarization | Converts the deed into a public instrument; triggers DST deadlines; a defective jurat or non‑appearance voids notarization. |
| Thumbmarks & IDs | Mandatory for illiterate or visually impaired signatories. |
| Margin initials | Good practice for each page; required by many RDs. |
| Tax Identification Numbers | Sec. 236(J), NIRC: mandatory on “all documents to be registered with a government agency.” |
| Witnesses | Not legally essential but often required by notaries. |
5. Special Power of Attorney (SPA) in property sales
| Aspect | Key points |
|---|---|
| Specificity | The Civil Code demands special—not general—authority: “to sell or to mortgage” must be expressly stated; blanket wording (“to do all acts”) is invalid for a land sale. |
| Form | Must be in a public instrument; two witnesses; notarized in the Philippines or consularized/apostilled abroad. |
| Registration | Not required for validity between the parties, but prudent to annotate it on the title if the attorney‑in‑fact will sign the DOAS. |
| Duration & Revocation | Unless a term is fixed, it subsists until revoked or the principal or agent dies (Art. 1930). For registered SPA, lodge a revocation with the RD to bind third persons. |
| Overseas execution | Apostille (since 2019) eliminates consular notarization for member states; otherwise, go through “consularization.” |
6. Step‑by‑step transfer workflow
Due diligence (buyer)
- Certified true copy of title, tax clearances, zoning verification, survey check, annotation search for liens, DAR clearance if agricultural.
Draft & notarize the DOAS
Compute and pay national taxes at the BIR
- Capital Gains Tax (CGT) – 6 % of higher of (a) gross selling price or (b) zonal/fair‑market value; due within 30 days of notarization.
- Documentary Stamp Tax (DST) – 1.5 % of same tax base; due on or before the 5th day of the next month.
- Withholding – if seller is a corp. or sale is dealer’s inventory: 6 % Creditable Withholding Tax (CWT) instead of CGT.
Secure the Certificate Authorizing Registration (original + two photocopies).
Pay Local Transfer Tax at City/Municipal Treasurer (rate up to 0.5 %; due within 60 days of notarization unless ordinance states otherwise).
Register at the Registry of Deeds
- File: Owner’s duplicate title, notarized DOAS, eCAR, transfer‑tax receipt, BIR tax receipts, updated real property tax clearance, SPA/board resolution if applicable, IDs.
- RD cancels old title and issues new TCT/CCT in buyer’s name, plus Memorandum of Encumbrances page.
Update the Assessor’s Office – secure new Tax Declaration and get tax‑due adjustments for the current year.
Tip: In the Torrens system, ownership transfers only upon RD registration, not on mere execution/notarization of the deed (Cf. Spouses Abellera v. Spouses Diaz, G.R. 222622, 30 Jan 2023).
7. Taxes, fees, and sample computations
| Item | Rate | Payor (default practice) | Timing |
|---|---|---|---|
| Capital Gains Tax | 6 % | Seller | 30 days from notarization |
| Documentary Stamp Tax | 1.5 % | Seller | 5th day of month following notarization |
| Transfer Tax (LGU) | ≤ 0.5 % | Buyer | Within 60 days (varies) |
| RD Registration Fee | ~₱ 9 k – ₱ 20 k typical (scaled) | Buyer | Upon registration |
| Notarial fees | ₱ 1 k – ₱ 5 k (Metro Manila norms) | Shared/negotiated | At signing |
Local rules trump custom. Some cities (Taguig, Davao) strictly enforce earlier transfer‑tax deadlines; always check the ordinance.
8. Documentary requirements at a glance
- Deed of Absolute Sale (original + 2–4 copies)
- SPA / board resolution (if representative)
- Current owner’s duplicate TCT/CCT
- Latest real‑property tax clearance & official receipt
- BIR Forms 1706 (CGT), 2000–OT (DST) & payment proofs
- eCAR (original and photocopies)
- Transfer‑tax receipt & assessment
- IDs, Marriage Certificate (if spouses), CENOMAR (rare but some RDs ask)
- Homeowners’ clearance or Condominium Certificate (if applicable)
- Sworn declaration of no improvement (for vacant land) or BIR zonal valuation sheet
9. Special scenarios
| Scenario | Extra steps / caveats |
|---|---|
| Sale by heirs (estate still unsettled) | Execute Extrajudicial Settlement with Sale; pay estate tax first (RA 11213 estate‑tax amnesty until June 14 2025); publish notice in newspaper for 3 weeks. |
| Seller abroad | SPA must be apostilled/consularized; authenticated passport pages appended. |
| Minor owner | Court approval under Rule 96, Rules of Court; guardian executes deed. |
| Agricultural land | DAR clearance & retention limits; check Comprehensive Agrarian Reform Program (CARP) restrictions. |
| Foreigner buyer | They may own condominium units (max 40 % of project); land only via hereditary succession or as a corporation with ≤ 40 % foreign equity. |
10. Common pitfalls to avoid
- Open or blank‑date deeds – treated as simulated; exposes parties to tax evasion liabilities.
- Under‑declared selling price – BIR may assess deficiency taxes, surcharges, interest, plus criminal prosecution.
- Unsigned or defective SPA – any deed signed under it is void; RD will refuse registration.
- Failure to pay CGT within 30 days – 25 % surcharge + 12 % annual interest pro rata.
- Notarization outside territorial jurisdiction – notary’s commission is province‑specific; deed may be nullified.
- Overlooked liens – e.g., bank mortgages, lis pendens; buyer acquires title subject to the encumbrance.
11. Drafting tips and best practices
- Mirror Title Data – Copy the technical description verbatim; attach approved subdivision plan if lot was recently subdivided.
- Spousal Consent – If property is conjugal/community, both spouses must sign or issue an SPA; otherwise voidable.
- Split Payments Clause – State who shoulders which taxes/fees; ambiguity breeds later disputes.
- Delivery Clause – Expressly state that owner’s duplicate title is turned over upon signing (or upon clearance of payment).
- Survival Clause – Ensure warranties survive registration for a fixed period.
- Digital Copies – Scan signed documents; RD now allows e‑documentary format for e‑title systems in pilot sites.
12. Quick comparison: Deed of Absolute Sale vs. Contract to Sell
| Feature | DOAS | Contract to Sell |
|---|---|---|
| Transfer of ownership | Immediately upon RD registration | Only upon full payment & execution of final deed |
| Remedy for buyer’s default | Rescission; seller must return price | Automatic cancellation; seller keeps property & may keep payments if so agreed |
| Common use | Spot‑cash or fully‑funded transactions | Pre‑selling units, pag‑ibig financing, installment sales |
13. Boilerplate SPA wording (illustrative)
“I, JUAN D. DE LA CRUZ, […] hereby name, constitute and appoint MARIA P. SANTOS as my true and lawful Attorney‑in‑Fact, for me and in my name, place and stead, to SELL, TRANSFER, and CONVEY under such terms and conditions she may deem proper, my parcel of land situated in [address] covered by TCT No. 12345, and to sign, execute and deliver the Deed of Absolute Sale and all BIR, LGU and Registry documents, receive and encash payments, and do every act necessary to effect the sale and registration thereof. I hereby grant full power of substitution and revocation…”
Always adapt to the exact act, property, and authority required under Art. 1878.
14. Key take‑aways
- No registration, no transfer. Ownership shifts only once the deed—properly notarized—is registered with the RD.
- Taxes are time‑critical. Missing the 30‑day CGT window triggers stiff surcharges and interest.
- SPA must be specific. A vague mandate cannot authorize a land sale.
- Due diligence is non‑negotiable. Verify title status, liens, surveys, zoning, and tax arrears before signing.
- Allocation of costs should be explicit. The Civil Code is silent, so parties must stipulate who pays which tax or fee.
Final word
The Philippine Torrens system, together with the Civil Code and tax statutes, provides a robust—if paperwork‑heavy—framework for transferring real property. Mastery of the Deed of Absolute Sale and the Special Power of Attorney, plus disciplined compliance with documentary and tax rules, is the surest path to a fast, dispute‑free conveyance and a clean title in the buyer’s name.