Transferring Land Titles from Individuals to a Corporation in the Philippines

Fees, taxes, requirements, and the exact steps—Philippine law & practice

Quick note: This is practical legal information, not a substitute for tailored advice. Tax rates and forms are relatively stable, but procedures can vary by Revenue District Office (RDO), Registry of Deeds (RD), and local government (LGU).

1) Can a corporation hold land in the Philippines?

Nationality rule: A corporation may own private land only if at least 60% of its outstanding capital is owned by Filipino citizens. Foreign equity cannot exceed 40%.
Condominiums: Corporations may own condominium units, but foreign ownership across the project is capped at 40%.
Public domain lands: Private corporations generally cannot acquire alienable lands of the public domain (only lease is allowed).
Practical check: The RD will not register a deed in favor of a corporation that fails the nationality test. Keep corporate ownership records (SEC GIS, Articles, stock and transfer book) handy to prove compliance.

2) Common ways to transfer from an individual to a corporation

Sale (onerous transfer)
- Most common route.
- Taxes depend on how the property is classified in the hands of the seller (capital vs. ordinary asset).
Donation (gratuitous transfer)
- Triggers donor’s tax (for the individual donor).
Property-for-shares / tax-free exchange (Section 40(C)(2), NIRC)
- Individual transfers the property to a corporation solely in exchange for shares, and as a result the transferor(s) gain “control” of the corporation (generally understood as ≥51% of voting power immediately after the exchange).
- Properly structured, no capital gains or ordinary income tax is recognized on the transfer itself. Other taxes/fees still apply (see below).
Dación en pago / settlement of subscription
- Property used to settle a debt or subscription to shares; tax treatment follows what the transfer is in substance (sale or exchange).

3) Taxes and fees: what you’ll actually pay (and who pays)

A. National taxes (BIR)

Scenario	Main tax	Rate / Base	Who pays
*Sale of real property classified as a capital asset* by an individual**	Capital Gains Tax (CGT)	6% of the higher of: (i) gross selling price; (ii) BIR zonal value; (iii) assessor’s fair market value	Seller (individual)
	Documentary Stamp Tax (DST) on deed	₱15 per ₱1,000 (≈1.5%) of the higher of consideration or FMV	Typically buyer shoulders in practice, but legally on the party making the document
*Sale of property classified as an ordinary asset* by the seller (e.g., used in business / held for sale by a dealer)**	Income Tax (regular graduated tax if individual) and possibly VAT (if seller is VAT-registered and sale is VATable)	Income tax on net income; VAT 12% on the gross selling price or FMV, if applicable	Seller; buyer may have creditable withholding obligations
	Creditable Withholding Tax (CWT) by the corporate buyer	Commonly 1.5% / 3% / 5% tiers based on price brackets for ordinary assets (under withholding rules)	Buyer withholds; creditable to seller
	DST on deed	≈1.5%	Usually buyer shoulders
Donation (individual → corporation)	Donor’s Tax	6% on net gift in excess of the annual exemption	Donor (individual)
	DST on deed of donation	≈1.5% of value	Usually donee or per agreement
Property-for-shares (tax-free exchange)	No CGT / income tax if requirements strictly met	—	—
	DST on deed (many RDOs still assess)	≈1.5%	Usually corporation
	DST on original issuance of shares	₱2 for every ₱200 of par/issue price (1%)	Corporation

Important classification point:

Capital asset (for individuals): generally property not used in trade or business.
Ordinary asset: property used in business (e.g., office, factory) or held by real estate developers/brokers as inventory. Classification drives whether the 6% CGT applies (capital asset) or regular income tax & possible VAT (ordinary asset).

Key BIR filing forms (typical):

CGT: BIR Form 1706 (file within 30 days from notarization).
DST (deeds): BIR Form 2000-OT (generally on or before the 5th day after the month when the taxable document was made).
Donor’s tax: BIR Form 1800.
Withholding on ordinary-asset sales: Buyer remits via 0619-E (monthly) and 1601-EQ (quarterly).

B. Local taxes (Province/City/Municipality)

Levy	Typical rate / base	Timing	Where
Transfer Tax	Up to 0.5% of value (provinces & most cities); up to 0.75% in Metro Manila	Within 60 days from date of deed	City/Provincial Treasurer
Real Property Tax (RPT) clearance	Must be fully paid before transfer	Before BIR issues eCAR or LGU accepts transfer tax	City/municipal assessor/treasurer

C. Registration & other fees

Registry of Deeds registration fee: per LRA schedule (graduated).
IT service fee / annotation fees: minimal, but present.
Notarial fees: market-based.
Certified true copies (CTCs) of title/tax declarations: small per-doc costs.

4) The end-to-end process (what to do, in order)

Phase 1 — Due diligence & structuring

Verify corporate eligibility to own land (≥60% Filipino).
Check the title (get a CTC of TCT/OCT/CCT), latest tax declarations, and a RPT clearance; confirm no adverse claims, liens, or free patent restrictions.
Confirm property classification in seller’s hands (capital vs. ordinary), as this dictates taxes.
Pick the mode: sale, donation, or property-for-shares (tax-free exchange).
If tax-free exchange: ensure “control” (≥51%) will be held by transferor(s) immediately after; prepare board approvals and share issuance mechanics.

Phase 2 — Documentation

Board approvals / Secretary’s Certificate (corporate buyer).
Draft and notarize the proper instrument:
- Deed of Absolute Sale, Deed of Donation, or Deed of Assignment (for exchange).
- Attach SPA if a representative signs; spousal consent if the seller is married and the property is conjugal/community.
Collect standard annexes:
- CTC of title; latest Tax Declarations (land and improvements).
- RPT clearance; Certificate of No Improvement (if selling land only).
- Valid IDs & TINs of parties; Lot plan / vicinity map if requested.
- For exchange: Subscription documents, share valuation, and board approvals.

Phase 3 — BIR (ONETT) taxes & eCAR

Compute and pay national taxes (CGT / DST / donor’s / VAT / withholding, as applicable) within deadlines.
Submit to BIR ONETT (RDO where the property is situated): deed, IDs/TINs, title/TDs, RPT clearance, proof of tax payments, and other required attachments.
Secure the BIR electronic Certificate Authorizing Registration (eCAR).

Phase 4 — LGU transfer tax

Pay transfer tax at the City/Provincial Treasurer within 60 days of the deed date (bring eCAR, deed, title, TDs, and receipts).

Phase 5 — Registry of Deeds (LRA)

File for registration at the RD: original deed, eCAR, proof of DST and transfer tax payments, RPT clearance, title, TDs, and IDs.
RD cancels the seller’s title and issues a new title in the corporation’s name (plus annotations, if any).
Claim the new TCT/CCT and request CTCs as needed.

Phase 6 — Assessor & corporate follow-through

Update the Assessor for new Tax Declarations in the corporation’s name.
If property-for-shares: issue the share certificates, record in the stock and transfer book, assess DST on original issuance, and update SEC filings as needed.

5) How to compute: practical examples

Assume: Selling price = ₱10,000,000; BIR zonal value = ₱12,000,000; Assessor’s FMV = ₱8,000,000. The tax base is the highest (₱12,000,000).

A) Sale of a capital asset (individual seller) → corporation

CGT: 6% × ₱12,000,000 = ₱720,000 (seller pays).
DST (deed): ≈1.5% × ₱12,000,000 = ₱180,000.
Transfer tax (NCR): up to 0.75% × ₱12,000,000 = up to ₱90,000 (LGU).
RD/LRA fees: per schedule (graduated).
RPT clearance: settle arrears if any.

B) Sale of an ordinary asset (seller is a developer or uses property in business)

Income tax on the seller’s net income from the sale.
VAT (if VATable): 12% × ₱12,000,000 = ₱1,440,000 (collected by seller; buyer gets input VAT if VAT-registered).
CWT by corporate buyer: typically 1.5% / 3% / 5% of the higher of price or FMV (creditable to seller; buyer remits).
DST / transfer tax / RD fees: as above.

C) Property-for-shares (tax-free exchange)

No CGT / no income tax if the control test and “solely for shares” requirement are met.
DST (deed): ≈1.5% of value (commonly assessed).
DST (share issuance): 1% of issue price/par.
Transfer tax / RD fees: still due.
Carry-over basis: Corporation generally takes the transferor’s basis (relevant for future tax).

6) Deadlines & penalties (one-time transfers)

CGT (1706): within 30 days from notarization.
DST on deeds (2000-OT): generally on or before the 5th day following the end of the month of notarization.
Transfer tax (LGU): within 60 days from deed date.
Late filings draw surcharge and interest, and the RD will not register without the eCAR and receipts.

7) Checklists you can use

Seller (individual)

Government ID and TIN
Original TCT/OCT/CCT and CTCs
Latest Tax Declarations (land & improvements)
RPT clearance; Certificate of No Improvement (if applicable)
Marital consent (if conjugal/community); SPA if represented
If mortgaged: Release or mortgagee consent

Buyer (corporation)

Board Resolution authorizing purchase & signatories
Secretary’s Certificate
SEC documents (Articles/By-laws, GIS or equivalent) to evidence ≥60% Filipino ownership
TIN and IDs
If exchange: subscription docs, share valuation, certificates (post-registration)

BIR ONETT dossier

Notarized deed (sale/donation/assignment)
IDs/TINs of all parties
Title, TDs, RPT clearance, CNI (if needed)
Payment forms and receipts (CGT/DST/donor’s/CWT/VAT as applicable)
Supporting docs (zonal value printout, SPA, marriage cert if needed)

RD filing bundle

eCAR
Deed + proof of DST payment
Transfer tax OR
Owner’s duplicate title
CTCs and IDs

8) Special situations & pitfalls (don’t ignore)

Estate issues: If the registered owner is deceased, complete estate settlement and pay estate tax first.
Free patent & similar restrictions: Titles derived from certain patents may carry non-alienation periods—check annotations.
Agricultural land & agrarian reform: Watch for tenancy and CARP/CARPER restrictions; conversion orders may be necessary.
Installment sales: CGT may be paid proportionately as collections fall due (special rules apply; coordinate with the RDO).
Undervaluation risks: BIR will use the highest of price, zonal value, or assessor’s FMV. Under-declarations lead to deficiency taxes & penalties.
VAT traps: A seller treated as ordinary (e.g., developer/lessor) may trigger VAT even if the buyer is a corporation.
Foreign-owned corporations: If foreign equity exceeds 40%, do not use a direct land transfer; consider long-term lease alternatives instead.
Married vendors: Lack of spousal consent can invalidate the sale of conjugal/community property.

9) Who usually shoulders what?

By practice (negotiable):
- Seller: CGT (if capital asset), income tax/VAT (ordinary asset).
- Buyer (corporation): DST on deed, transfer tax, RD fees, and incidental costs.
- Tax-free exchange: corporation typically shoulders DST on deed and DST on share issuance.

10) Frequently asked questions

Q: Can we do a straight “swap for shares” and avoid taxes entirely? A: A properly structured tax-free exchange can avoid CGT/ordinary income tax, but DST, transfer tax, and RD fees still typically apply. Documentation must prove solely shares were received and control (≥51%) was achieved immediately after.

Q: Is withholding required when the seller pays CGT? A: For capital asset sales subject to CGT, the buyer generally does not withhold. For ordinary asset sales, the corporate buyer must withhold CWT and remit.

Q: Which value do we use for taxes? A: Always compare selling price, BIR zonal value, and assessor’s FMV and use the highest as the tax base (unless a tax uses a different base by rule).

Q: How long does registration take? A: Varies by RDO/RD/LGU workload and document completeness. Delays commonly arise from missing annexes or unpaid RPT.

11) Clean, compliant playbook (copy/paste)

Confirm ≥60% Filipino ownership of the corporation.
Pull CTC of title, TDs, and RPT clearance; scan for annotations/restrictions.
Decide sale vs. donation vs. exchange (and asset classification).
Prepare board approvals and deed; get spousal consent/SPA if needed; notarize.
Pay BIR taxes (CGT/DST/donor’s/VAT/CWT) on time; file with ONETT and obtain eCAR.
Pay transfer tax (within 60 days) at the LGU.
Register at the RD (deed + eCAR + receipts + title/TDs) and receive the new title.
Update Assessor (new TDs).
If exchange, issue shares and pay DST on share issuance; update SEC filings/books.

Final practical tips

Bring 2–3 sets of photocopies of everything.
Use names exactly as on TIN & IDs; mismatches cause rework.
If there’s a building, expect separate TDs and values for land and improvements.
For loans/mortgages, budget for separate DST and RD fees on the mortgage.
Keep a timeline checklist tied to deadlines (CGT 30 days; DST by 5th day after month-end; LGU transfer tax 60 days).

If you want, I can turn this into a printable checklist or a one-page calculator for the taxes using your numbers.