Transfer of Motorcycle Ownership Without Sale in the Philippines
A comprehensive legal-practice guide (updated to June 2025)
1. Why this topic matters
Many Filipinos pass motorcycles to relatives, heirs, charities, or business partners without receiving any purchase price. Although no “sale” occurs, the transfer must still be reflected on the Certificate of Registration (CR) at the Land Transportation Office (LTO); otherwise, the old owner remains legally liable for traffic violations, accidents, or criminal use of the unit under the Land Transportation and Traffic Code (Republic Act 4136).
2. Core legal pillars
| Law / Regulation | Key provisions relevant to non-sale transfers |
|---|---|
| Civil Code of the Philippines (Arts. 712, 748-752, 774-1101) | Defines ownership, donation of movables, barter/exchange, succession, and partition. |
| Republic Act 4136 (LTO law) | §5 & §25: any conveyance must be reported to the LTO within 15 days; failure keeps the registered owner liable. |
| Revenue Regulations 12-2018 & 2-2023 (TRAIN law) | Flat 6 % Donor’s or Estate Tax on fair market value (FMV) of the motorcycle; pay via BIR Form 1800 (donation) or Form 1801 (estate). |
| BIR Documentary Stamp Tax (DST), Sec. 173 NIRC | ₱15 per deed of donation/exchange; waived for transfers by succession. |
| PNP-HPG Clearance Circulars (2022) | Second-hand motor vehicles, including donated units ≥ 50 cc, need PNP-HPG Motor Vehicle Clearance Certificate before LTO acts on change of ownership. |
| RA 11235 (Motorcycle Crime Prevention Act, “Doble Plaka”) | Reinforces the duty to keep LTO records updated; higher penalties if the actual user differs from the registered owner. |
3. Recognised non-sale modes of transfer
| Mode | Legal instrument | Tax exposure | Typical scenario |
|---|---|---|---|
| Pure donation | Deed of Donation of Personal Property (notarised) | 6 % donor’s tax on FMV (exempt if FMV ≤ ₱250 k cumulative per calendar year + spouse) | Parent gives motorcycle to child turning 18. |
| Barter / Exchange | Deed of Exchange (two movables swap) | DST ₱15 each; no VAT or income tax if values equal | Two friends swap different motorcycle models. |
| Dación en pago (payment in kind) | Deed of Dación en Pago | Considered payment of debt → subject to income tax/VAT if original debt arose from trade/business; otherwise exempt; always DST ₱15 | Debtor surrenders motorcycle to settle ₱80 k loan. |
| Succession (inheritance) | Extrajudicial Settlement of Estate (or probate) + Affidavit of Self-Adjudication (sole heir) | 6 % estate tax on net estate; no DST | Motorcycle of deceased father transferred to children. |
| Contribution to partnership / corporation | Deed of Assignment to entity | DST ₱15; no donor’s tax (there is consideration—shares) | Sole proprietor incorporates and contributes fleet. |
| Inter-corporate transfer | Board Resolution + assignment | DST; donor’s tax only if gratuitous | Sister companies realign assets. |
| Government confiscation / award | Disposition Order | N/A | LGU auctions unclaimed impounded bike. |
Tip: In practice the LTO does not examine the tax side, but BIR clearances are now routinely audited during plate releases and PNP-HPG clearances.
4. Step-by-step compliance checklist
Draft and notarise the proper deed (see table above).
Pay taxes and secure clearances
- BIR Form 1800/1801 within 30 days of notarisation or death.
- Documentary Stamp Tax (DST) at any AAB or via eFPS/eBIR.
- Obtain BIR eCAR (Electronic Certificate Authorizing Registration) or manual CAR.
- Secure PNP-HPG Clearance (present deed, OR/CR, engine & chassis stencils, valid IDs).
Have the motorcycle inspected at any LTO District Office (MVIS lane) and obtain a Motor Vehicle Inspection Report (MVIR) with fresh stencils.
File for Change of Ownership at LTO
- Forms: LTO-AD Form 2002-231 (Application for Motor Vehicle Transactions), MVIR, deed, eCAR, HPG clearance, original OR/CR, insurance COC in new owner’s name.
- Pay: ₱50 change-of-ownership fee + ₱50 annotation fee + usual renewal fees if due.
- Processing time: same-day for clean papers; 3–5 days if regional approval is needed (e.g., inherited or corporation transfers).
Update insurance (CTPL and, if any, comprehensive) to reflect the new registered owner.
5. Tax nuances & illustrations
| Situation | FMV | Donor’s/Estate Tax due | Must pay? |
|---|---|---|---|
| Parent donates bike (FMV ₱120 k) → child; parent donated none earlier that year | 120 k | ₱0 (below ₱250 k annual exemption) | Still file Form 1800 to claim exemption |
| Friend A exchanges bike worth ₱90 k for Friend B’s worth ₱95 k | — | ₱0 donor’s tax (there is consideration) but each pays ₱15 DST | Yes DST |
| Heir receives bike worth ₱85 k; net estate totals ₱3 M | 85 k | 6 % of 3 M → ₱180 k total estate tax (the bike’s value already included) | Yes, before LTO |
6. Penalties for non-compliance
| Omission | Legal basis | Consequence |
|---|---|---|
| Fail to report transfer within 15 days | RA 4136 §25 | Fine ₱2 000-₱10 000 and/or imprisonment 6 months; registered owner remains liable for all violations. |
| Use of bike whose registered owner differs from actual owner when used in crime | RA 11235 §5 | Fine up to ₱100 000 + prison 6 mos-6 yrs; presumption of conspiracy if no timely transfer recorded. |
| Non-payment of donor’s/estate tax | NIRC §248-§256 | 25 % surcharge + 12 % p.a. interest + compromise penalty; criminal liability if wilful. |
7. Special scenarios & frequently-missed details
- Company motorcycle to retiring employee – Treated as fringe benefit if for free; employer pays 35 % FBT or executes Deed of Donation and pays donor’s tax.
- Motorcycle still under chattel mortgage – Must secure Mortgagee’s Release or Certification of Full Payment, then execute Deed of Release of Chattel Mortgage before any transfer.
- Transfers within same family home province – Some RDOs waive eCAR for minimal-value motorcycles if below ₱50 k; practice varies—confirm first.
- Motorcycles imported under Carnet/PEZA – Check customs restrictions; ownership transfer may require Bureau of Customs clearance before LTO.
- Transfers to minors (<18 data-preserve-html-node="true" yrs) – Allowed, but registration must name a **legal guardian “for and in behalf of ** minor,” with guardian’s IDs and consent.
- Online deed templates – Acceptable if complete, but still require “SIGNED IN THE PRESENCE OF TWO WITNESSES” clause and notarisation.
- Alternative evidence when CR lost – File Affidavit of Loss + Duplicate CR request before change-ownership.
8. Practical drafting tips
- Describe the motorcycle precisely – Plate number, MV file number, engine & chassis numbers, make, series, year model, color.
- State consideration (or lack thereof) – “This deed is purely gratuitous; no money or other consideration is exchanged.”
- Include tax undertaking clause – Identifies who shoulders taxes and fees.
- Attach photocopies of valid government IDs of both parties; notarising lawyers increasingly require this post-2023 Anti-Fake Notaries campaign.
9. Sample Deed of Donation clause (excerpt)
“I, Juan D. Santos, Filipino, of legal age, single, with address at _____, hereby donate unto Maria L. Santos, my daughter, likewise Filipino, of legal age, single, with address at _____, the following personal property, to wit:
One (1) Honda Click 125i, 2022 model, Plate No. 123ABC, MV File No. 1301-00000012345, Engine No. KF12E-1234567, Chassis No. KF12-9876543, Color: Candy Caribbean Blue. This donation is purely voluntary and gratuitous, and the DONOR affirms that the property is free from any lien or encumbrance…”
10. Key take-aways
- Transfer = paperwork, even if no money changes hands.
- Pay (or prove exemption from) donor’s/estate tax before LTO will tag the new owner.
- HPG clearance is now mandatory for almost all second-hand motorcycles, including donations.
- Report to LTO within 15 days to avoid fines and criminal exposure.
- Keep a complete paper trail—deed, eCAR, clearance, MVIR, OR/CR—to pass future spot inspections or when reselling.
Disclaimer
This article is for general information and does not constitute legal advice. Laws, revenue regulations, and LTO memoranda change; always verify with the latest issuances or consult a Philippine lawyer experienced in transportation and tax law.