Requirements for Deed of Sale Preparation in the Philippines (Comprehensive Legal Guide, updated June 2025)
1. Overview: Why Form Matters
Under Philippine law a sale is perfected by mere consent (Art. 1475, Civil Code), but proof and enforceability usually demand a written Deed of Absolute Sale (DOAS). For real property worth more than ₱500 or for chattel subject to third-party registration (e.g., motor vehicles), the statute of frauds (Art. 1403) and Art. 1358 require an instrument in a public document—i.e., notarized. Without it you cannot:
- pay the correct taxes,
- register title with the Registry of Deeds (realty) or Land Transportation Office (movables),
- invoke vendor’s warranties in court with ease, or
- insulate the buyer from hidden liens.
2. Governing Law & Regulations
| Area | Key Authority | Core Provisions |
|---|---|---|
| Civil Code | Arts. 1458 – 1637 | Definition, obligations, warranties, remedies |
| Notarial Law | R.A. 9344 & 2004 Rules on Notarial Practice | Form, competent evidence of identity, venue |
| Property Registration | P.D. 1529 (Property Registration Decree) | Protocol for Torrens transfers |
| Taxation | NIRC 1997 (as amended) – Sec. 24(D), 196, 200; BIR Rev. Regs. 12-2018, 13-2024 | CGT, DST, eCAR issuance |
| Local Taxes | Local Government Code (LGC) | Transfer tax (≤ 50% of 1% of BIR value) |
| Motor Vehicles | R.A. 4136, LTO Memo Cir. 2022-236 | CR/OR transfer on notarized deed |
| Special Assets | Condominium Act, Maceda Law, CARP, IPRA, Homestead Acts | Restrictions on alienability, pre-clearances |
3. Preliminary Due Diligence Checklist
Identify the Parties
- Full legal name, marital status, citizenship, TIN, registered address
- If married: secure written marital consent unless property is paraphernal/exclusive
- If a juridical entity: Board Resolution & Secretary’s Certificate; SEC or DTI docs
Ascertain Capacity & Authority
- Special Power of Attorney (SPA) if signing through an agent
- Court order/guardianship if a minor or incapacitated seller
Verify Object of Sale
Real Property:
- Original/Transfer/Condominium Certificate of Title (OCT/TCT/CCT) – certified true copy (CTC)
- Tax Declaration & Real Property Tax (RPT) clearance
- Latest Statement of Account (SOA) for condo dues, if applicable
- Survey plan or vicinity map for untitled land
Movable/Chattel:
- Certificate of Registration & Official Receipt (CR/OR) for motor vehicles
- Serial/engine numbers, manufacturer’s certificate for equipment
Check Encumbrances & Restrictions
- Adverse claims, notices of lis pendens, mortgages, usufruct, CARP retention, ancestral land limitations
Price Benchmarking
- BIR Zonal Value vs. Fair Market Value (FMV) per assessor—taxes are computed on the higher
4. Essential Clauses of a Philippine Deed of Sale
Title & Introductory Paragraph – “Deed of Absolute Sale” (or Conditional Sale) stating date & place of execution.
Appearances – Personal details with competent evidence of identity (IDs/Passport numbers).
Recitals (“WHEREAS” Clauses) – Chain of ownership, reason for sale, absence of liens.
Transfer Clause – Clear statement of intent to transfer ownership, describing:
- Full technical description (lot number, survey plan, area) or chassis/engine numbers.
- Inclusive rights (e.g., easements, improvements).
Consideration – Peso amount, manner of payment (cash, check, installment, assumption of mortgage).
Warranties & Representations –
- Ownership and peaceful possession
- Freedom from liens except those disclosed
- Delivery and acceptance clause
Taxes & Expenses Allocation – Standard practice: seller pays CGT, buyer pays DST, TT, registration; parties may vary this by stipulation.
Default & Risk Allocation (esp. for conditional sales/installments).
Signatures – Parties and two instrumental witnesses on every page.
Acknowledgment Section – Notarial block conforming to 2020 notarial form updates.
5. Notarization Standards
| Requirement | Details |
|---|---|
| Venue | Within the notary’s territorial commission; else void. |
| IDs | Two government-issued IDs with photo & signature, or one ID + credible witnesses. |
| Need for Thumbmarks | If signatory is illiterate or cannot sign. |
| Notarial Register | Entry number must appear on every copy. |
| Copies | At least three: parties, notary, ROD/LTO. |
6. Tax & Fee Matrix (Real Property)
| Tax/Fee | Rate | Payor (default) | Deadline |
|---|---|---|---|
| Capital Gains Tax (CGT) | 6 % of gross selling or BIR value | Seller | Within 30 days of notarization (BIR Form 1706) |
| Documentary Stamp Tax (DST) | 1.5 % of higher of selling price or FMV | Buyer | On or before 5th day of month following notarization (BIR Form 2000-OT) |
| Transfer Tax (prov./city) | ≤ 0.5 % of zonal/FM value | Buyer | 60 days from notarization (check LGU ordinance) |
| Registration Fee (ROD) | Graduated, c. ₱8 k per million | Buyer | Upon presentation of CAR & tax receipts |
| IT Fee (LRA) | ₱576 + ₱10/page | Buyer | Along with registration |
Failure to pay CGT or DST on time triggers 25 % surcharge + 12 % annual interest.
7. Standard Workflow (Real Property)
Draft DOAS → Review by both counsel.
Notarize.
Secure BIR eCAR
- Submit DOAS, IDs, TCT, tax dec, RPT clearance, BIR Forms 1706 & 2000-OT, proof of payment.
- BIR issues Certificate Authorizing Registration (CAR) + stamped DOAS within 5–30 days.
Pay Transfer Tax at the local treasury.
Register with the Registry of Deeds: DOAS, CAR, tax receipts, owner’s duplicate title, etc.
Receive New TCT/CCT in buyer’s name; annotate encumbrances if any.
Update Tax Declaration at Assessor’s Office within 30 days post-transfer.
Tip: Always obtain certified photocopies of the registered deed and the new title for safekeeping and for utilities/association transfer.
8. Special Transaction Types
| Scenario | Additional Requirements |
|---|---|
| Installment Sale / Conditional Sale | Include reservations of ownership (Art. 1478) or Maceda Law compliance if residential. |
| Sale of Conjugal/Common Property | Both spouses must sign or spouse’s SPA with marital consent. |
| Corporate Seller | Board approval, Secretary’s Certificate, latest GIS, corporate TIN. |
| Estate Sale | Extra-judicial Settlement, BIR Estate Tax eCAR, Affidavit of Self-Adjudication (if single heir). |
| Agrarian-covered Land | DAR Clearance; consider retention limits & CLOA restrictions. |
| Ancestral/Indigenous Land | Free and Prior Informed Consent (FPIC), NCIP certification. |
| Sale to Foreigners | Land: max 40 % in condominium corporation; else void. Check Anti-Dummy Law. |
9. Deed of Sale for Movables (e.g., Motor Vehicles)
No CGT; but DST = ₱15 per ₱1,000 of consideration or zonal value (Sec. 195, NIRC).
LTO Transfer must be filed within 30 days of notarization with:
- Original notarized Deed of Sale (3 copies)
- CR/OR (original + photocopy)
- Compulsory third-party liability (CTPL) insurance
- Emission test & stencil imprint
- Valid ID of buyer and seller
10. Best-Practice Drafting Tips
- Mirror title technical descriptions verbatim; any discrepancy delays registration.
- Add a Tax Clause: “All taxes, assessments, and fees due on or before the date of notarization shall be for the account of the Seller.”
- Use Peso & Words – Write “₱1,500,000.00 (One Million Five Hundred Thousand Pesos)” to avoid tampering.
- Initial Every Page including attachments (plans, IDs) to curb substitution.
- State Delivery of Possession explicitly: “Possession and enjoyment of the Property shall be turned over upon signing.”
- Attach Color Copies of IDs to assist notarial compliance.
- Keep Electronic Scans—Republic Act 11032 (Ease of Doing Business) encourages digital submissions; RODs now accept e-filed copies for pre-assessment.
11. Common Pitfalls & How to Avoid Them
| Pitfall | Consequence | Preventive Action |
|---|---|---|
| Undervaluation of price | BIR re-assessment, penalties, criminal liability | Use zonal/FM value, disclose actual consideration |
| Lapsed tax deadlines | 25 % surcharge + interest; refusal to register | Calendar deadlines immediately after notarization |
| Missing seller’s spouse signature | Deed voidable; title may be annulled | Verify regime (CPC, ACP, CPG) & secure consent |
| Unreleased mortgage annotation | Buyer gets encumbered title | Obtain Cancellation of Mortgage prior to sale |
| Notarization outside jurisdiction | Deed treated as private instrument; ROD rejects | Engage notary commissioned in place of execution |
| False TIN or no TIN | BIR refuses eCAR | Secure TIN first (BIR Form 1904) |
12. Fees & Timeline Snapshot (Typical Metro Manila Real Property Sale, 2025)
| Stage | Timeframe | Indicative Cost* |
|---|---|---|
| Drafting & Notarization | 1–2 days | ₱1,000 – ₱3,000 (notarial) + lawyer’s fee |
| BIR Processing | 5–15 days | CGT & DST per Section 6 table |
| Transfer Tax | 1 day | 0.5 % of z/fmv |
| ROD Registration | 2–10 days | ~₱9,000 per ₱2 M + IT fees |
| New Tax Dec | 1–3 weeks | ₱500 – ₱1,000 |
*Excludes professional fees, association clearances, or special certifications.
13. Sample Skeleton Deed (Key Sections Only)
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
This DEED made and executed this ___ day of __________ 2025, in Quezon City, Metro Manila, by and between:
SELLER: JUAN DELA CRUZ, of legal age, Filipino, married to Maria Santos, with address at… (CTC No. …)
-and-
BUYER: ANA REYES, of legal age, Filipino, single, with address at… (CTC No. …)
WITNESSETH: That…
(Body with consideration, warranties, tax clause, delivery)
IN WITNESS WHEREOF, parties hereunto set their hands…
Signed in the presence of: ___________________________
ACKNOWLEDGMENT
Republic of the Philippines ) City of _________ ) S.S.14. Ethical & Professional Notes
- Lawyer Involvement: Drafting need not be done by a lawyer, but legal counsel minimizes risk.
- Conflict-of-Interest Checks for notaries and counsel.
- Data Privacy: IDs and TINs must be stored in compliance with R.A. 10173 (Data Privacy Act).
- Anti-Money Laundering (AMLA): High-value cash transactions (> ₱1 M) trigger reporting obligations for covered institutions.
15. Quick Reference Deadlines
| Action | Deadline from Notarization |
|---|---|
| File CGT return & pay | 30 days |
| Pay DST | 5th day of following month |
| Secure eCAR | before registration |
| Pay LGU Transfer Tax | within 60 days |
| Register with ROD | ASAP after eCAR & tax payments |
| Update Tax Dec | within 30 days post-registration |
| LTO vehicle transfer | 30 days |
16. Conclusion
Preparing a Deed of Sale in the Philippines is not merely paperwork; it is a carefully choreographed process that balances doctrinal requirements, tax compliance, and practical safeguards. Start with exhaustive due diligence, draft with precision, notarize properly, then move swiftly through tax and registration windows. Doing so protects both seller and buyer, avoids costly penalties, and ensures a clean, marketable title.
This guide is for general information and is not a substitute for personalized legal advice. Consult a Philippine-licensed lawyer or your local Registry of Deeds for transaction-specific concerns.