Transfer Certificate of Title vs. Deed of Sale: Key Differences (Philippines)

This article explains—clearly and completely—the difference between a Transfer Certificate of Title (TCT) and a Deed of Sale for Philippine real property, and how they work together in an actual transfer. It also covers legal bases, core concepts in the Torrens system, due-diligence checks, tax and registration steps, practical pitfalls, and special cases (condominiums, spouses, foreigners, agricultural land, minors, estates, foreclosure, and lost titles).

1) Plain definitions

Deed of Sale (often “Deed of Absolute Sale” or DOAS)

A contract where the seller transfers ownership of a specific property to the buyer for a price.
Typically drafted by the parties (or counsel), signed by both, and notarized (turning it into a public instrument).
It is the legal basis to move the title into the buyer’s name, but by itself does not change the name on the government’s title records.

Transfer Certificate of Title (TCT)

A government-issued certificate under the Torrens system showing who owns a parcel of registered land and the encumbrances/annotations affecting it.
A TCT is issued by the Registry of Deeds (RD).
It replaces the prior owner’s title after a valid transfer and registration.
For condominium units, the equivalent is a Condominium Certificate of Title (CCT).

Bottom line: The Deed is the cause (contract of transfer). The TCT is the effect (official record and proof of ownership after registration).

2) Legal foundations (in brief)

Civil Code of the Philippines
- A sale is perfected by meeting of the minds on the thing and the price (Art. 1475).
- Ownership passes by delivery; for immovables, delivery can occur through execution of a public instrument (Art. 1498), although actual tradition/possession may still matter between the parties.
- Certain acts, like those creating or transmitting real rights over immovables, must be in a public document (notarized) to bind third persons (Art. 1358).
Property Registration Decree (P.D. 1529)
- For registered land, registration is the operative act to convey or affect the land as to third persons (Sec. 51).
- The title (TCT/CCT) and its memoranda/annotations are the definitive public record of ownership and liens.
National Internal Revenue Code (NIRC) and Local Tax Codes
- Impose capital gains tax (for capital assets), documentary stamp tax, local transfer tax, and related clearances before the RD issues a new title.

3) Side-by-side comparison

Feature	Deed of (Absolute) Sale	Transfer Certificate of Title (TCT)
Nature	Private contract; basis of transfer	Public certificate of ownership issued by the RD
Who prepares/issues	Parties (seller & buyer), then notarized	Registry of Deeds after due taxes/fees/clearances
Function	Proves there was a sale; enables registration	Proves registered ownership and lists encumbrances
When effective	Between parties upon perfection & delivery; against third persons upon registration	Effective upon issuance/entry in the RD records
What it replaces	—	Cancels prior owner’s OCT/TCT and generates a new TCT in buyer’s name
Modifications/defects	Can be rescinded/annulled per contract law/court action	Can be amended or cancelled only by subsequent registration, court order, or operation of law

4) How a sale of registered land actually moves from deed to title

Draft & notarize the Deed
- Identify parties, marital status, citizenship, property (with technical description and title number), price, payment terms, delivery, taxes allocation, and special conditions.
- Attach supporting IDs, tax numbers, and required consents (e.g., spousal consent).
Pay taxes and secure BIR clearance
- Compute and pay capital gains tax (or creditable withholding tax if applicable), documentary stamp tax, and obtain the Certificate Authorizing Registration (CAR/eCAR) with supporting docs (including the notarized deed).
- Obtain tax clearance for real property tax (RPT) and latest receipts.
Pay local transfer tax & update assessment
- Settle local transfer tax with the city/provincial treasurer.
- Coordinate with the Assessor’s Office for issuance of a new Tax Declaration in the buyer’s name (usually after RD issues the title, but offices often process these in tandem).
Register with the Registry of Deeds
- Submit: Owner’s duplicate title, notarized deed, CAR/eCAR, tax receipts/clearances, transfer tax receipt, IDs, and other agency clearances if required (e.g., DAR for agricultural land).
- The RD cancels the seller’s title and issues a new TCT in buyer’s name.
- RD annotates liens (e.g., mortgages), adverse claims, court orders, or restrictions on the new title.

Key principle: Without registration, the buyer’s rights over registered land are vulnerable against third persons even if the deed is valid between the parties.

5) Taxes, fees, and who typically pays

Capital Gains Tax (CGT) (for sellers of real property classified as capital assets): typically 6% of the higher of the gross selling price or zonal/fair market value.
Documentary Stamp Tax (DST): generally 1.5% of the same tax base.
Local Transfer Tax: rate varies by LGU (commonly around 0.5%–0.75%).
Registration fees and Entry fees at the RD.
Real Property Tax (RPT): seller usually clears arrears up to date of sale.
Who pays? Allocation is contractual; market practice often has the seller paying CGT and the buyer paying DST, transfer tax, registration, and incidental fees—but parties may agree otherwise. If the property is an ordinary asset of a business, VAT/creditable withholding rules may apply instead of CGT.

Rates, forms, and procedures are periodically updated. Always compute using the higher of contract price and government valuation.

6) Due diligence checklist (before you sign or pay)

Examine the current title
- Get a certified true copy from the RD. Check:
  - Title number, registered owner, technical description, lot/plan numbers.
  - Annotations: mortgages, liens, adverse claims, lis pendens, right-of-way easements, restrictions (e.g., HLURB/HLURB successor-agency notes for subdivisions), ECCs, court orders.
  - Derivation: that the chain from OCT → TCT is consistent.
Verify property on the ground
- Relocation survey if boundaries are in doubt; match to the technical description.
- Confirm possession, improvements, occupants/tenants, and any informal settlers or claims.
Tax & regulatory checks
- RPT paid and no arrears; compare assessed vs zonal/FMV.
- BIR TINs of parties; confirm CAR/eCAR requirements.
- DAR clearance for agricultural land (e.g., if covered by CARP/CLOA, special rules apply).
- HLURB/DHSUD permits for subdivision/condo projects (if primary sale from developer).
Identity & capacity of parties
- Valid IDs, authority to sell (e.g., SPA duly notarized and consularized/apostilled if issued abroad).
- Spousal consent where property is conjugal/absolute community.
- If corporate seller/buyer: board approvals, secretary’s certificate.
- If estate property: extrajudicial settlement or court approval; estate tax compliance.
- If minor or incompetent is a party: court-approved guardianship/authority.

7) Special situations & nuances

a) Condominiums (CCTs)

Unit titles are CCTs, not TCTs; the parking slot may have a separate CCT.
The Master Deed and By-Laws impose use restrictions; association dues and arrears must be checked.

b) Spouses & family property

Under the Family Code, disposition of property under absolute community or conjugal partnership generally needs the consent of both spouses; lack of consent can void or voidable the sale (subject to case law nuances).
For separation of property, present the marriage settlement or court decree.

c) Foreigners & corporations

Foreign individuals cannot own land (constitutional restriction), but may own condo units subject to the 40% foreign ownership cap at the project/corporation level.
Philippine corporations may own land if they meet the 60% Filipino ownership threshold.

d) Agricultural land & CLOA titles

Land covered by CARP/CLOA often carries restrictions on transfer and DAR clearances; some require longer holding periods or farmer-beneficiary qualifications.

e) Government land, ancestral domains, friar lands

Titles derived from special regimes may carry statutory limits or special approval processes.

f) Foreclosure & auction purchases

After foreclosure sale, the certificate of sale is registered and may be subject to a redemption period depending on the mortgage type and law; only upon consolidation will a new title issue in the buyer’s name.

g) Lost or damaged titles

Replacements follow reconstitution (judicial or administrative) under special laws; until reconstituted, transfers are typically put on hold.

8) Common drafting points in a Deed of Absolute Sale

Parties (names, civil status, nationalities, TINs, addresses)
Authority/consent (spousal, corporate, guardian, attorney-in-fact)
Description of property (title number, lot/block, area, technical description, improvements)
Price and payment terms (earnest money vs. downpayment, mode of payment)
Delivery & possession (date, condition of property, keys/turnover)
Taxes & fees allocation (who pays CGT/DST/transfer tax/registration)
Warranties (ownership, freedom from liens/encumbrances except as disclosed)
Default & remedies (rescission, liquidated damages, litigation venue)
Notarial acknowledgment (complete details; attach photocopies of IDs)

Attachments often include: latest tax declaration, tax clearances, official receipts, approved survey plan (if available), and SPA or board resolutions when applicable.

9) Practical pitfalls (and how to avoid them)

Relying on the deed alone for registered land. → Register at the RD; until then, third parties may defeat your unregistered claim.
Mismatched technical descriptions vs. the actual lot on the ground. → Get a licensed geodetic engineer when in doubt.
Unseen annotations (mortgages, adverse claims). → Always secure a certified true copy from the RD right before closing.
Wrong tax base (using a low contract price). → Taxes use the higher of contract price, zonal value, or assessed market value.
Missing spousal or corporate authority. → Verify consents and board approvals early.
Paying full price before due diligence. → Use escrow or staged payments tied to delivery of clearances and successful title transfer.
Notarization errors. → Ensure complete notarial acknowledgment, correct community tax certificates/ID details, and notary’s commission validity/location.

10) Frequently asked clarity points

Is a deed enough to own the property? Between seller and buyer, a notarized deed plus delivery can transfer ownership inter partes. But for registered land, you must register the deed; registration is what binds the world and gets you a new TCT.
Whose name appears on the TCT? The registered owner (after registration). If the buyer financed the purchase with a mortgage, the mortgage is annotated on the same title.
Can I sell land without a title? Unregistered land can be sold via a deed, but risk is high; buyers typically require judicial registration first or robust proof of ownership and long possession. Banks usually won’t finance.
How long does title transfer take? It depends on BIR processing, local treasurer, assessor, and RD backlogs, completeness of documents, and whether special clearances are needed. Timelines vary by locality.

11) Quick reference: documents commonly required for registration

Notarized Deed of (Absolute) Sale
Owner’s duplicate of the current OCT/TCT/CCT
BIR CAR/eCAR, proof of CGT/CWT, DST payments
Transfer tax receipt
RPT tax clearance and latest Tax Declaration
Valid IDs/TINs; SPA or corporate certificates if using representatives
DAR/DENR/DHSUD/other agency clearances when applicable

12) The clean transfer formula

Valid, notarized Deed (with proper consents + precise property description)
Taxes paid + CAR/eCAR issued
Local transfer tax and assessor coordination
Register at the RD → New TCT/CCT in buyer’s name with proper annotations

Remember: The Deed starts the journey; the TCT is the finish line in the public records.

Disclaimer

This article provides general information on Philippine property transfers. Specific facts (property type, location, parties, annotations, and changing tax rules) can materially affect outcomes. For transactions of consequence, consult a Philippine real-estate lawyer, a licensed geodetic engineer, and coordinate with your local BIR, Assessor, Treasurer, and Registry of Deeds.