Steps to Sell a Condominium Unit in the Philippines

(A practitioner-style legal guide)

1) Understand the Legal Framework

Condominium Act (RA 4726, as amended): Governs condominium ownership, common areas, and the condominium corporation/association. It permits foreign ownership of condominium units provided foreign equity in the condominium corporation does not exceed 40%.
Civil Code of the Philippines: General rules on contracts of sale, obligations, and warranties.
Family Code: Spousal consent rules; property relations (absolute community, conjugal partnership, separation of property).
National Internal Revenue Code (NIRC): Taxes on real property sales (Capital Gains Tax, Documentary Stamp Tax, VAT/CWT rules).
Local Government Code & LGU revenue codes: Transfer tax and local clearances.
Anti-Money Laundering Act (AMLA) & PRC regulations: Know-your-client requirements; brokers must be PRC-licensed and comply with KYC.

2) Pre-Sale Readiness: Title, Taxes, and Clearances

A. Verify and organize your core documents

Original Condominium Certificate of Title (CCT) — confirm owner’s name, unit/parking identifiers, floor area, and any annotations (e.g., mortgage, liens, notices of levy, lis pendens). If parking has a separate CCT, prepare that too.
Certified True Copy (CTC) of CCT — obtain from the Registry of Deeds (RD) for buyer/bank due diligence.
Tax Declarations for the unit (building improvements) and, if applicable, the parking.
Real Property Tax (RPT) receipts and RPT clearance — settle delinquencies.
Association/Condo Dues Clearance — certificate from the admin/condo corporation showing no arrears or special assessments.
Valid Government IDs and Taxpayer Identification Numbers (TINs) of seller(s). If the seller is a foreigner, a Philippine TIN is still required for tax processing.
Civil status documents:
- Married seller: spousal consent and IDs (and, if under Absolute Community/Conjugal Partnership, spouse typically signs).
- Legally separated/annulled/widowed: supporting decrees/death certificate.
- Multiple heirs as owners: see “Special Scenarios.”
Corporate seller: Board Resolution/Secretary’s Certificate authorizing the sale, Articles/By-Laws, GIS, and IDs of signatories.
If owner is abroad: Special Power of Attorney (SPA) apostilled or consularized and specific to the property and actions (sale, signing, tax processing, receipt of proceeds).

B. Clean up encumbrances

Mortgage: Request a Release of Mortgage from the lender once paid; have it annotated on the CCT at the RD. If selling while still mortgaged, coordinate a simultaneous settlement (bank-to-bank payoff and release at closing).
Other annotations: Satisfy and cancel liens, adverse claims, or court notices before marketing if possible.

C. Check regulatory constraints

Foreign ownership cap: If buyer is foreign, verify the project’s 40% cap status with the condo corp/admin.
Use restrictions: Review Master Deed, Declaration of Restrictions, and house rules (e.g., short-term leasing bans, pet rules) — these affect buyer decisions and disclosures.

3) Valuation, Pricing, and Tax Matrix

A. Determine value

Compare recent sales in the building and nearby; consider BIR zonal value and Assessor’s fair market value (FMV) because several taxes are computed on the higher of: (i) Gross Selling Price (GSP), (ii) Zonal Value, or (iii) FMV per Tax Declaration.

B. Know which tax regime applies to you

Capital Gains Tax (CGT): Typically 6% of the higher of GSP, zonal, or FMV when an individual sells a condo classified as a capital asset (not used in business).
- Principal residence exemption: An individual may be exempt from CGT if the full proceeds are used to acquire/build a new principal residence within 18 months, with proper BIR filing/undertaking and subject to “once in 10 years” rule and other conditions.
Creditable Withholding Tax (CWT): Applies when the seller’s property is an ordinary asset (e.g., by a real estate dealer/corporation). Rates vary by classification and location; the buyer withholds and remits.
Documentary Stamp Tax (DST): Generally 1.5% of the higher of GSP, zonal, or FMV (paid by buyer in practice, but parties may allocate).
Value-Added Tax (VAT): Potentially applicable if the seller is VAT-registered and selling ordinary assets (e.g., developer/in the course of trade). Residential sales may be exempt below certain statutory thresholds; thresholds are adjusted by law/regulation—confirm the current amounts before closing.
Local Transfer Tax: Rate depends on LGU (commonly around 0.5%–0.75% of the tax base).
Registration Fees: Payable to the RD per LRA schedule (usually a modest graduated amount).
Notarial Fees & Broker’s Commission: Per agreement; commission customarily 3%–5% for secondary sales (market practice varies).

Practical tip: Because taxes are computed on the highest among GSP, zonal value, or FMV, pricing significantly below zonal won’t reduce taxes and may raise questions. Align your price to market and tax bases.

4) Marketing, Negotiations, and Buyer Due Diligence

Engage a PRC-licensed broker (optional but advisable). Require PRC ID, OR, and brokerage agreement.
Disclosures: Known defects, pending special assessments, ongoing litigation, or water ingress issues must be disclosed. Provide house rules and a copy of the condo corporation by-laws on request.
Reservation/Earnest Money: If taken, memorialize terms (refundable/non-refundable triggers) in a Reservation Agreement or Offer to Purchase.
Buyer due diligence package:
1. CTC of CCT (recent)
2. Condo dues clearance; RPT receipts
3. Tax Declarations (unit and parking)
4. IDs/TINs of seller
5. Building permits/occupancy certificate (if requested), admin certs on foreign ownership %, and no-violation letters
6. For leased units: the existing lease and rental ledgers

5) Contracts and Notarization

Choose the correct instrument based on payment structure:

Deed of Absolute Sale (DOAS): For spot cash or one-time payment upon closing. Must be notarized; include full legal description (per CCT), unit area, parking identifiers, selling price, tax allocation, possession/turnover, and warranties.
Contract to Sell (CTS): For installment or bank-financed deals; title usually transfers upon full payment. Include schedule, interest (if any), default and forfeiture clauses, and conditions precedent (e.g., bank loan approval).
Deed of Assignment (special): If selling pre-titled interest (e.g., from developer prior to issuance of CCT), ensure developer consent and compliance with the Master Deed and buyer qualification rules.

Execution details

Names must match IDs and CCT.
If married, have the spouse sign or provide waiver/proof of property regime.
If signing via Attorney-in-Fact, attach the SPA (apostilled/consularized if executed abroad).
Notarization converts the instrument into a public document; ensure the notary’s details and roll number are complete.

6) Taxes and BIR Processing (Certificate Authorizing Registration)

Key forms and timelines (practice-oriented)

CGT (BIR Form 1706) — generally within 30 days from date of sale (often the date of notarization).
DST (BIR Form 2000-OT) — generally on or before the 5th day following the month when the document was signed (commonly filed together with CGT in practice).
VAT/CWT — if applicable, follow filing and remittance rules for the seller/buyer respectively.

Standard BIR documentary set (varies by RDO)

Notarized DOAS/CTS (with 2–3 original copies)
TINs and IDs of buyer and seller
CCT (owner’s duplicate) and CTC of CCT
Tax Declarations (unit and parking)
Latest Real Property Tax clearance
Certificate of No Improvement/With Improvement (if required)
Association Dues Clearance
SPA/Board Resolution (if applicable)
Official receipts of paid CGT/CWT, DST, and VAT (if any)
Other RDO-specific checklists (e.g., pictures of unit, location plan, sworn statements)

Outcome: eCAR/CAR (electronic Certificate Authorizing Registration). You must present the CAR to the City/Municipal Treasurer (for Transfer Tax) and to the RD (for title transfer).

Principal residence CGT exemption: If availed, include the Sworn Declaration at sale and comply with the 18-month reinvestment and one-in-ten-years rule; otherwise, CGT becomes due with surcharges/interest.

7) LGU Transfer Tax and Title Transfer at the RD

A. Transfer Tax (LGU Treasurer)

Pay Transfer Tax using the CAR and DOAS/CTS, within the period set by the LGU (commonly within 60 days from notarization unless the LGU provides otherwise). Obtain the Transfer Tax receipt/clearance.

B. Registry of Deeds (LRA) Submit:

CAR and tax payment proofs (CGT/CWT, DST, VAT if any)
Transfer Tax receipt
Owner’s duplicate CCT (and parking CCT)
Notarized DOAS/CTS and IDs
Association certificate as required
Registration fees per LRA schedule

Result: Issuance of a new CCT in the buyer’s name (and for parking, a separate CCT). Processing times vary by RD.

C. Assessor’s Office

Update Tax Declarations to the buyer’s name using the new CCT and RD documents.

8) Turnover and Possession

Handover protocol: Keys, access cards, mailbox keys, appliance warranties, as-built plans (if available), utility account transfer letters, and move-out/move-in permits per condo admin rules.
Utilities: Close or transfer Meralco, water, internet/cable to buyer, or issue authorization letters.
Final dues reconciliation: Settle prorated association dues, RPT, and condo special assessments as allocated in the DOAS/CTS.

9) Special Scenarios

A. Owner is deceased (estate sale)

Settle Estate Tax (generally 6% of the net estate).
Execute Extrajudicial Settlement (EJS) if applicable (with publication) or Probate if there’s a will.
Secure CAR for Estate; transfer to heirs first (title in heirs’ names), then heirs sell to buyer or (if allowed by RDO) process a direct sale with estate settlement, following local practice and BIR guidance.

B. Property is leased

Disclose the Lease Agreement. Buyer takes subject to existing lease unless parties agree to termination or assignment at/before closing.

C. Seller/buyer abroad

Use apostilled/consularized SPA and accommodate remote notarization only if recognized and accepted by the RD/BIR concerned (practice varies). Courier originals early.

D. Pre-selling/Unissued CCT

Transactions may be via assignment of rights with the developer’s consent. Confirm turnover schedule and title issuance; taxes and documentary requirements can differ from a titled resale.

E. With bank financing

If buyer obtains a housing loan, coordinate a tri-party closing: bank issues manager’s checks to pay off seller’s lender (if any) and to the seller, then annotates the mortgage on the buyer’s new CCT post-transfer.

10) Timeline Snapshot (typical, varies by office)

Week 0–2: Document gathering, due diligence, listing, offer/negotiation.
Week 2–4: Sign DOAS/CTS, pay earnest/partial.
Within statutory periods: File and pay CGT/CWT, DST; submit BIR dossier.
BIR processing: Issuance of CAR/eCAR (duration varies by RDO workload and completeness).
Post-CAR: Pay Transfer Tax; then Register at RD.
After title release: Update Tax Declarations; turnover to buyer.

Missing documents, unresolved encumbrances, and valuation mismatches (zonal vs price) are the most common causes of delay.

11) Practical Drafting & Closing Notes

Tax allocation clause: State who pays CGT/CWT, DST, VAT (if any), Transfer Tax, registration, notarial, and association certifications. Market practice: Seller pays CGT (if applicable) and Buyer pays DST and Transfer/Registration; but parties can reallocate.
Possession vs title: Clarify when possession transfers (often at full payment) and whether occupancy requires condo admin move-in approval.
Warranties & disclosures: Include no-liens, no-arrears, and no pending litigation warranties; attach move-out clearance as a closing deliverable.
Data privacy: Redact personal data when circulating title scans to prospects; share full copies only with serious buyers under NDA if warranted.
Broker protections: If listing with multiple brokers, use authority to sell letters with clear validity and commission terms to avoid disputes.

12) Comprehensive Checklist (Seller-Side)

Identity & Authority

Valid IDs, TINs of all signatories
Marital status docs; spousal consent/signature
SPA (apostilled/consularized) or Board Resolution/Secretary’s Cert (if entity)

Property & Dues

Original CCT(s) + recent CTC from RD
Tax Declarations (unit & parking)
RPT receipts & RPT clearance
Association/condo dues clearance & admin certificates
Release of Mortgage / cancellation of encumbrances (if any)

Contracts & Taxes

Signed and notarized DOAS/CTS (with full legal description)
CGT/CWT returns and proof of payment (as applicable)
DST return and proof of payment
VAT invoices/receipts (if applicable)
BIR CAR/eCAR

Transfer & Registration

Transfer Tax receipt (LGU)
RD registration fee receipts; new CCT issuance
Updated Tax Declarations in buyer’s name

Turnover

Keys/access cards/remotes
Move-out/move-in permits, utility transfer letters
Appliance manuals/warranties; final dues reconciliation

13) Red Flags and Risk Mitigation

Title discrepancies: Mismatched names, areas, or un-cancelled liens. Remedy before marketing.
Under-declared selling price: Taxes follow the highest of GSP/zonal/FMV; under-declaration won’t save taxes and risks penalties.
Expired IDs/TIN issues: BIR won’t process without valid IDs/TINs of both parties.
Association arrears: Buyer or RD may require zero-balance certification.
Foreign ownership limit breached: Sale to a foreign buyer can be rejected by the condo corp; check cap early.
Late tax filings: Surcharges, interest, and compromise penalties can snowball; calendar the statutory deadlines.

14) Frequently Asked Clarifications

Who prepares the deed? Typically the broker’s or parties’ counsel; bank-financed buyers may use bank-accredited counsel.
Can we use escrow? Yes—escrow can hold funds and documents until CAR issuance and RD transfer.
Can possession pass before title transfer? Yes by agreement, but secure adequate protections (post-dated checks, escrow, holdbacks for repairs or arrears, insurance, and move-in approval).
Parking sale without unit? Check the Master Deed/Restrictions; many projects require parking to follow unit ownership or impose limits.

15) Bottom Line

Selling a condominium unit in the Philippines is a document- and deadline-driven process that touches national tax law, condo governance, and local transfer rules. Prepare your title, taxes, and clearances up front, choose the right contract form for your payment structure, file taxes on time to obtain the CAR, then complete LGU transfer tax and RD registration to perfect title transfer—finishing with a clean turnover to the buyer. Careful sequencing and complete paperwork are your best tools for a smooth, penalty-free sale.