Land properties are also a form of investment; it is a significant investment. Getting into real estate can be tricky, especially if you’re just new. But think of the brighter side; you can build your dream home, an apartment, a business, or a location to raise livestock that will pay off in the long term by owning a piece of land. Having land allows you the freedom to choose.
If you’re a land buyer, make sure a lawyer notarizes the transaction and that you have copies of the contract of sale. After all, this is your money at stake, so don’t skimp on the documentation. There are a few legal documents you should be aware of in order to buy land and secure your hard-earned money.
Deed of Absolute Sale
After receiving the entire payment, a Deed of Absolute Sale will be prepared and filed with the Registry of Deeds before being delivered to you. This is a notarized document stating officially that you purchased the property from the seller and are now the owner.
Deed of Adjudication with Sale
The Deed of Adjudication with Sale declares that all surviving heirs have agreed to sell the land, protecting this contract from future disputes on the sale.
Certificate of Titles
This is the best and most legitimate proof of land ownership. You will receive a copy of this from the Registry of Deeds. If you purchased a house or lot, you would receive a Transfer of Certificate of Title (if it was issued after the first title). Still, if you purchased a condominium unit, you will receive a Condominium Certificate of Title.
You must verify that the seller is current on property tax payments. After transferring the title to your name, you must request a Tax Declaration from your municipality’s Assessor’s office. Submit the property’s new title and a photograph. Once completed, you will be free of tax responsibilities.
Contract to Sell
Contract to Sell will act as a reserve agreement, with the seller agreeing to remove the property from the market. However, until the outstanding debt is settled, the seller retains possession of the property. If the buyer must make a down payment first and then pay the entire balance over time, a contract to sell is issued (depends on what they agreed on).
This is a written agreement between the property owner and the land buyer.
Steps in Buying A Land
Owning a land process isn’t as easy as you think, but it will be totally worth it. It would also be best to consult with a professional to avoid getting scammed. Professional assistance from real estate specialists or legal advisers will also make you have an informed decision. Here are the following steps when you buy land in the Philippines.
Step 1: Confirm Ownership
The first thing you should do is to find out who owns the land. Get a copy of the title from the Register of Deeds to see if it’s true. The title will show the name of the person who owns it and other essential things. Remember to get a copy of the title from the seller to be able to answer questions that the Register of Deeds will ask you when you buy a home.
Step 2: Double check possible issues
Land acquisition involves a lot of money, so make sure to check for possible issues that may arise in the future.
- Check the land description
- Make sure you get a copy of the Tax Declaration from them.
- Do not forget about the right of way.
- Make sure the seller is legitimate.
Step 3: Obtain a Notarized and Signed Deed of Sale.
A notarized and signed deed of sale is necessary. Make sure to keep in mind that this document identifies which party will bear the burden of taxation on the sale of the property.
Step 4: Sort out BIR Fees
To avoid inconveniences and delays, make sure to check with the BIR website first before going to their branch. Within 30 days of signing the Deed of Sale, the assigned party must be able to pay the BIR any outstanding fees. In addition to the money, some paperwork is required. You may need the following:
- Deed of Absolute Sale (original and photocopy)
- Transfer Certificate of Title (original and photocopy)
- Tax Declaration for Land and Improvement
- Buyer and Seller’s Tax ID Number
Step 5: Process transfer taxes
A BIR representative will figure out your Capital Gains Tax and Documentary Stamp Tax. The BIR Form 1706 and BIR Form 2000 will also need to be signed. Submission of these documents to the Municipal or City Treasurer’s office or an agent bank will be completed and filed once finished.
Step 6: File CGT and DST Documents
You must submit the CGT and DST documents to the BIR in order to receive the Certificate of Authorization to Register.
Step 7: Get a copy of the new tax declaration.
Get a copy of the new Tax Declaration paperwork from the Assessor’s office, whether it’s municipal or provincial. Five days after the following documents are presented, it is usually made public.
Frequently Asked Questions
What documents are needed when buying land?
You will need the following documents as proof that you have purchased the land. These sample documents attest to the fact that you purchased the property from the seller and are now the legal owner of the land or property in question.
- Contract to sell
- Deed of absolute sale
- Deed of adjudication with sale
- Certification of titles
- Tax declaration
What to do before buying a lot in the Philippines?
Here’s a checklist you can refer to so you’d have an informed decision when buying your first lot investment.
If you are buying from an individual:
- Check the authenticity of the Transfer of Certificate of Title.
- The property should not be mortgaged.
- Ascertain that the land described on the title is, in fact, the land you are purchasing.
- Do background checks on the owner. If you are purchasing from an individual property owner, get identification documents such as a passport or driver’s license. It is also good to speak with the sellers’ neighbors to verify their identity.
- To ensure that real estate tax payments are current, request a copy of the Tax Declaration and Tax Receipts.
If you’re buying from a developer:
- Verify the mother title’s availability.
- Trust a trustworthy developer with a proven track record.
- Examine each clause of the contract to sell that you intend to sign, including the annexes. Hire a lawyer if possible.
- Negotiate as much as you can.
Get in Touch with Bilkenn For More Information About Owning Land in The Philippines
If you are interested in owning a property in the Philippines, or would just like to know more about the process and what is involved, please do not hesitate to get in touch with Bilkenn. They will help you make an informed decision and help you throughout the steps!