Requirements for a Deed of Sale of Agricultural Land in the Philippines

(Comprehensive guide as of 31 July 2025; for educational purposes only—consult a lawyer or licensed broker for specific transactions.)

1. Governing Laws & Policies

Field	Key References (non-exhaustive)
General rule on contracts	Civil Code of the Philippines, Arts. 1318–1403
Sale of real property	Civil Code, Arts. 1458–1592
Form & registration of instruments	Property Registration Decree (PD 1529)
Agrarian‐reform limits & clearances	RA 6657 (CARL), RA 9700; DAR A.O. 1-1989, A.O. 7-2011, A.O. 2-2017
Taxation & transfer fees	NIRC (as amended by TRAIN & CREATE), Local Government Code
Foreign ownership restrictions	1987 Constitution, Public Land Act
Spousal consent & conjugal rules	Family Code, Art. 96/124
Tenancy, leasehold & right of pre-emption	Agricultural Tenancy Act (RA 1199), RA 3844 as amended
Homestead, awarded or emancipated lands	RA 6657 §§27–28; RA 11953 (2023 Agrarian Emancipation Act)

2. Pre-Sale Due Diligence Checklist

Verify Ownership & Title
- Owner’s duplicate copy of Original/Torrens Certificate of Title (OCT/TCT).
- Certified true copy (CTC) from the Registry of Deeds (RoD) issued within 30 days.
- Check annotations: liens, encumbrances, notice of coverage (NOC), writs, mortgages, DAR prohibitions.
Land Classification & Size
- Confirm land is classified as “agricultural” in both the cadastral map and local zoning ordinance.
- If the land exceeds 5 hectares (retention limit), the seller must show DAR retention order or exemption.
Agrarian Status
- Determine if the land is:
  - Undistributed but within CARP coverage (needs DAR Clearance / VLT/VOS waiver).
  - Awarded land to an agrarian reform beneficiary (ARB) — generally non-transferable for 10 years and subject to right of pre-emption or redemption by co-beneficiaries and the Land Bank.
- Secure a Certification from DAR that the land may be transferred.
Possession & Tenancy
- Identify tenants or farmworkers. The right of first refusal/pre-emption applies (RA 3844 §12 as amended).
- If there is a tenancy arrangement, tenancy must be lawfully terminated or tenant must voluntarily waive rights before execution of the deed.
Tax & Assessment Status
- Latest real property tax (RPT) receipts & tax clearance from the Municipal/City Treasurer.
- Updated tax declaration (Agricultural Land).
Special Limitations
- Foreigners and foreign-owned entities cannot own agricultural land. Long-term leases (max 75 yrs) are the alternative.
- Corporate buyers must prove 60 % Filipino ownership.
- Lands with standing crops may require separate sale of “harvestable” produce.

3. Core Contents of the Deed of Sale

Formality: A sale of real property must be in a public instrument (notarized) to be valid against third parties and registrable (Civil Code Art. 1358, PD 1529).

Element	What to Include / Drafting Tips
Title & Parties	Exact full names, citizenship, civil status. If married, state spouse; attach spousal consent clause.
Authority to Sell	If corporation: Board Resolution & Secretary’s Certificate; if attorney-in-fact: SPA with notarization & DAR form concurrence.
Property Description	OCT/TCT number, Lot & Block numbers, Survey Plan (LRC/BSN), area (sq m/hectares), boundaries, existing improvements.
Consideration & Payment Terms	Price in Philippine Peso, schedule of payments, earnest money acknowledgment, penalties for default.
Warranties	Freedom from liens, valid title, no pending agrarian cases, vendor’s capacity to sell.
Agrarian Declarations	Certification that sale complies with CARP/DAR rules and that tenants (if any) have waived/pre-emption.
Tax Clause	Allocation of taxes and fees (usual practice: seller pays Capital Gains Tax (CGT) & doc stamp tax (DST); buyer pays transfer tax, registration fees, and notarial fees—but parties may agree otherwise).
Delivery & Possession	Turnover date, standing crops handling.
Default/Remedies	Rescission, forfeiture of payments, specific performance.
Venue & Governing Law	Courts of proper jurisdiction (usually where land or a portion lies).
Signatures & Acknowledgment	Signed by vendor(s) and vendee(s) on all pages; two credible witnesses; notarization with competent evidence of identity (IDs).

4. Accompanying Documentary Requirements (Typical RoD/BIR/DAR List)

Deed of Absolute Sale – 3 original notarized copies.
Owner’s Duplicate TCT/OCT + CTC (new).
Latest Tax Declaration and Tax Clearance.
BIR Forms:
- BIR Form 1706 (CGT) – 6 % of the higher of zonal/fair-market price or selling price; payable within 30 days from notarization.
- BIR Form 2000-OT (DST) – ₱15/₱1,000 or fraction (1.5 %).
- BIR Certificate Authorizing Registration (CAR).
DAR Clearance / Exemption (DAR-LUCC, DAR-A.O. 12-94, etc.).
Real Property Tax (RPT) Receipts – Four quarters of current year.
Valid IDs of parties; Marriage Certificate (if applicable); Birth Cert. if minor.
Barangay Certificate that the land is agricultural & no tenancy dispute (varies by LGU).
Retirement of Tax Declaration (for seller) & issuance of new declaration (for buyer).
Transfer Tax Receipt – paid to Provincial/City Treasurer within 60 days of notarization (rate: 0.5 %–0.75 % of consideration or FMV, depending on LGU).
Registry of Deeds Fees – Registration & issuance of TCT in buyer’s name.

⚠️ Some Registries/LGUs impose additional clearances (e.g., DENR certification for timberland boundary, ECC). Always verify local checklists.

5. Step-by-Step Registration Flow

Notarization of the Deed.
BIR One-Time Transactions (ONETT) – File CGT & DST, submit documents, pay taxes; wait for CAR issuance (10–20 days typical).
LGU Treasurer – Pay transfer tax; secure tax receipt.
DAR Provincial Office – Secure DAR Clearance/exemption if not yet obtained.
Registry of Deeds – Present: Deed + CAR + DAR Clearance + Tax receipts + title; pay registration fee.
Issuance of New TCT – Buyer’s name; seller’s copy surrendered.
Municipal/City Assessor – Update tax declaration to reflect new owner.
Bureau of Internal Revenue – Submit photocopy of new TCT for reference.

6. Special Scenarios & Caveats

Scenario	Additional/Mandatory Requirements
Spousal co-ownership / conjugal	Written conformity of the spouse; both must sign or risk nullity (Family Code Arts. 96 & 124).
Sale by Heirs before distribution	Extrajudicial settlement first (Rule 74, Rules of Court) or court-approved partition; BIR Estate Tax compliance.
Corporate Seller/Buyer	SEC‐stamped Board Resolution, Secretary’s Certificate; SEC-verified Articles/By-laws to prove nationality.
Foreign‐funded purchase (long lease)	Long-term lease contract (max 75 yrs) instead of sale; require DENR conversion clearance if land use will change.
Tenanted land	Written waiver of tenancy or certificate of Agrarian‐free status; observe right of redemption within 180 days.
Mortgage‐backed title	Lifting of mortgage prior to sale or simultaneous release upon payment.
Emancipation Patent (EP) or CLOA land	Non-transferable for 10 yrs except through hereditary succession; DAR approval and Land Bank redemption right beyond that period.
Conversion to non-agricultural use	DAR Conversion Order (DC) required; hefty fees and LGU zoning alteration.

7. Taxes & Fees Summary (Typical)**

Tax/Fee	Who Pays by convention	Rate / Basis	Deadline
Capital Gains Tax (CGT)	Seller	6 % × (higher of zonal value, FMV, or price)	30 days from notarization
Documentary Stamp Tax (DST)	Seller	1.5 % of same tax base	Within 5 days of month following notarization
Transfer Tax	Buyer	0.5–0.75 % (LGU-dependent)	60 days from notarization
Registration Fee	Buyer	₱8,600 + sliding scale	At RoD registration
Notarial Fee	Usually Buyer	~1 % of price (caps vary)	Upon notarization
DAR Clearance Fee	Seller	Per hectare schedule	Before BIR filing

**TRAIN/CREATE Acts kept CGT & DST rates unchanged; check latest BIR revenue regs for updated ONETT procedures.

8. Common Pitfalls & How to Avoid Them

Skipping DAR Clearance – Leads to RoD refusal; secure early.
Using Outdated Title Copy – Always obtain a fresh CTC within 30 days.
Unpaid Real Property Taxes – Buyer may inherit tax liabilities + penalties.
Erroneous Land Description – Causes BIR or RoD rejection; double-check survey data.
Ignoring Tenancy Rights – Sales voidable; tenant can redeem within 180 days.
Late Tax Filing – BIR surcharges (25 % + interest).
Inadequate Spousal Consent – Sale void in respect of conjugal share.
Foreigner Buying Land – Constitutionally prohibited; structure as lease or condo (up to 40 %).

9. Practical Tips

Engage a licensed geodetic engineer to verify metes and bounds if the land is irregular or has been subject to boundary disputes.
Request a DAR field investigation early when land status is unclear.
Use GPN (General Professional Notary) services experienced in real-estate to reduce sticky defects in notarization.
Maintain a deal file: digital scans of all IDs, clearances, proofs of tax payment; many LGUs now require electronic submissions.
If purchasing large tracts (>5 ha) for agro-industrial projects, prepare a corporate retention plan and explore Stock Distribution Option (SDO) compliance.

10. One-Page Closing Checklist

🔲 Latest CTC of Title & plan
🔲 DAR Clearance / Exemption
🔲 RPT & Tax Declaration updated
🔲 Tenancy Waiver / Certification
🔲 Deed signed, notarized, with spousal consent
🔲 CGT & DST paid, CAR secured
🔲 Transfer Tax paid
🔲 Deed registered at RoD, new TCT issued
🔲 New Tax Declaration in buyer’s name

Final Note

While this guide summarizes “all there is to know” in principle, local practice varies among Registries of Deeds, DAR provincial offices, and LGUs. Always check the current checklists of the relevant agencies and seek professional counsel when in doubt.