Transfer of National Housing Authority (NHA) Titles to a Second Owner in the Philippines
A comprehensive legal-procedural guide
1. Nature of an NHA Award
| Instrument | What it conveys | Typical status before transfer |
|---|---|---|
| Notice of Award / Certificate of Award (CA) | A contractual right to acquire title once conditions are met | Title still in NHA’s name; beneficiary occupies unit under a Contract to Sell (CTS) or Lease-Purchase Agreement |
| Deed of Sale with Mortgage | Beneficiary becomes registered owner but title is mortgaged to NHA/Housing Guaranty Corp. | TCT already issued in beneficiary’s name, annotated with a mortgage lien |
| TCT/ OCT fully released | Beneficiary holds unencumbered title | Transfer governed only by the Civil Code, Property Registration Decree and local tax ordinances |
Understanding which document you hold determines when and how you may legally convey the unit to a second owner.
2. Statutory & Regulatory Framework
Presidential Decree No. 757 (1975) – created the NHA and vests it with authority to set transfer conditions for socialized housing it develops.
Urban Development & Housing Act (UDHA), R.A. 7279 (1992) –
- §3(k) defines “beneficiary;”
- §18, §29 impose a five-year non-transferability rule: an awardee may neither sell nor mortgage the property within five (5) years from award except to legal heirs or back to the government.
Civil Code & Property Registration Decree (P.D. 1529) – govern the form and registration of deeds, mortgages and liens once the five-year ban lapses or if an exemption is granted.
NHA Memorandum Circulars / Estate Management Guidelines – spell out documentary checklists, fees, and internal clearances (varies by project year; latest compilation 2023).
Local Government Code (R.A. 7160) – imposes transfer tax; provinces/cities fix the rate (max 0.50 % for socialized housing).
National Internal Revenue Code – 6 % Capital Gains Tax (CGT) and 1.5 % Documentary Stamp Tax (DST) apply to voluntary sales unless exempt (e.g., under the Community Mortgage Program).
3. Core Restrictions on a Sale/Transfer
| Rule | Practical effect |
|---|---|
| Five-Year Lock-In (UDHA §29) | Clock starts on date of award, not on date of first occupancy. Transfer within 5 years = void, except to heirs or to the NHA. |
| Full Settlement of NHA Obligation | No transfer clearance until: (a) all amortizations, interest & penalties are paid, or (b) buyer assumes the outstanding balance via NHA-approved Transfer of Rights with Assumption of Mortgage. |
| Occupancy & Compliance | Awardee must have (i) physical possession, (ii) no pending ejectment/anti-social case, (iii) real-property taxes up-to-date. |
| NHA Prior Consent | Even after 5 years, the Deed of Restriction on the TCT normally requires written NHA approval before any sale or mortgage is registered. |
Failure to meet these conditions can result in denial of clearance, refusal of the Registry of Deeds (ROD) to register, or cancellation of the award.
4. Pathways for Transfer
A. Scenario 1 – Awardee still under Contract to Sell (title in NHA’s name)
- Apply for “Transfer of Rights (TOR)” with NHA estate management office.
- Submit: TOR application form; original CTS; buyer’s and seller’s IDs; community tax certificates; proof of occupancy; notarized deed of assignment; latest Statement of Account.
- Pay: TOR processing fee (₱2 000–₱5 000 typical), arrears, at least three (3) months advance amortization.
- Execute new CTS between NHA and buyer; seller is released. No BIR taxes yet because ownership remains with NHA.
B. Scenario 2 – Title already issued to Awardee but still mortgaged to NHA / NHMFC
NHA Clearance: same documentary set, plus owner’s duplicate title and updated tax declaration.
Deed of Sale with Assumption of Mortgage signed by seller, buyer, and NHA.
BIR Taxes:
- CGT – 6 % of higher between selling price & zonal value; exemptions: (1) direct sale to a legitimate tenant under Sec. 32(B)(7)(b) NIRC, or (2) dwellings not exceeding ₱2 M if proceeds used to acquire a new principal residence within 18 months.
- DST – 1.5 % of selling price or zonal value.
Register deed and updated mortgage with ROD; lien annotation amended to show buyer as new mortgagor.
C. Scenario 3 – Title fully released (no NHA encumbrance)
- Secure NHA “Certificate of No Outstanding Obligation / Non-Encumbrance” (still required under most Deeds of Restriction).
- Proceed exactly like an ordinary land sale: notarized Deed of Absolute Sale → BIR → LGU transfer tax → ROD issuance of new TCT in buyer’s name.
5. Step-by-Step Timetable (Scenario 3 illustration)
| Stage | Typical timeframe | Key output |
|---|---|---|
| 1. Draft & notarize Deed of Sale | Day 1 | Signed deed, IDs, tax declarations |
| 2. NHA clearance | 1–2 weeks | Certificate of Approval of Sale |
| 3. BIR One-Time Transactions (OTC) | 2–3 weeks | CAR (Certificate Authorizing Reg.) + stamped deed |
| 4. City/Provincial Treasurer | 1–2 days | Transfer-tax receipt |
| 5. Registry of Deeds | 3–10 working days | New TCT issued & released |
| 6. Assessor’s Office | Same day | Tax Declaration in buyer’s name |
6. Taxes, Fees & Typical Costs*
| Item | Base | Rate / Amount |
|---|---|---|
| Capital Gains Tax (CGT) | higher of SP or zonal | 6 % |
| Documentary Stamp Tax (DST) | same base | 1.5 % |
| Transfer Tax (LGU) | SP or zonal | up to 0.5 % (socialized) |
| Registration Fee (ROD) | graduated | ~0.25 % + ₱30 entry |
| NHA Clearance / TOR fee | fixed | ₱2 000–₱5 000 |
| Misc. (notary, certifications) | — | ₱2 000+ |
*Figures vary by locality; always verify current schedules.
7. Special Modes of Succession & Donation
- Succession – Death of awardee within 5-year ban: heirs may file Affidavit of Self-Adjudication or Extrajudicial Settlement and apply for NHA transfer clearance. Estate tax is computed, but CGT is not due on transfer by inheritance.
- Donation – Allowed only after 5 years and with NHA consent. Donor’s Tax (graduated) and DST (0.5 %) apply; CGT is not imposed on donations.
8. Common Pitfalls & How to Avoid Them
- Sale via “Deed of Assignment” within 5 years – looks convenient but void under UDHA; NHA can eject both parties.
- Skipping NHA clearance – ROD examiners routinely return documents when the title bears “Subject to NHA approval” annotation.
- Unpaid real-property taxes – BIR will withhold CAR issuance until certified paid.
- Using a “waiver of rights” in lieu of a notarized deed – non-registrable; exposes both parties to double sale issues.
- Mismatched marital status – Titles issued under conjugal regime require signature (or SPA) of spouse; otherwise sale is voidable.
9. Best-Practice Checklist for a Smooth Transfer
- Calendar the 5-year maturity date from award before marketing the unit.
- Secure a payoff statement and settle arrears well in advance.
- Get a certified true copy of title to confirm encumbrances and restrictions.
- Draft a deed that mirrors NHA’s preferred template (available at project management office).
- Always attach two (2) government-issued IDs per signatory and a barangay certification of actual residence.
- File for CAR electronically where e-CAR system is implemented to shorten BIR processing.
- Photocopy every stamped page before submission to each office to avoid re-notarization hurdles.
10. Conclusion
Transferring an NHA housing unit to a second owner is neither prohibited nor unduly complicated after the statutory five-year lock-in and full settlement of obligations—provided every clearance, tax and registry step is observed in order. The key is to treat the unit as publicly assisted housing with lingering state oversight, not as an ordinary private subdivision lot. By front-loading compliance—especially NHA approval and tax clearances—both seller and buyer can expect the Registry of Deeds to issue a new TCT within a month, giving the second owner clean and marketable title.
(This article is for general guidance only and is not a substitute for personalized legal counsel. Laws and fees change; consult the NHA estate management office and a Philippine property lawyer for case-specific advice.)