In purchasing a property, there are “hidden charges” which a buyer needs to be aware of. One of this is Registration Fees. In this post, I will discuss how one can compute for registration fees and more.
What are registration fees?
Registration Fees are paid for the registration of:
- A deed of sale, conveyance, transfer, exchange, partition, or donation;
- A deed of sale with pacto de retro, conditional sale, sheriff’s sale at public auction, sale for nonpayment of taxes, or any sale subject to redemption, or the repurchase or redemption of the property so sold;
- Any instrument, order, judgement or decree divesting the title of the registered owner, except in favor of a trustee, executor, administrator, or receiver;
- Option to purchase or promise to sell;
- Any mortgage, surety, bond, lease, easement, right-of-way, or other real right or lien created or constituted by virtue of a district contract or agreement, and not as an incidental condition of sale, transfer or conveyance; and
- The assignment, enlargement, extension or novation of mortgage or of any other real right, or release or mortgage, termination of lease, or consolidation of ownership over a property sold with pacto de retro.
Other Taxes and fees to consider
You also need to check if Value Added Tax (VAT) is applicable.
The Documentary Stamps Tax (DST) on the sale of real property, Transfer Tax, registration fees, Information Technology (I.T.) fees, and all other expenses required to transfer the property from the name of the seller to the buyer are for the account of the buyer.
In order to avoid surprises, I suggest that you request for a computation of the expenses which are for the buyer’s account from your real estate broker (if you have one), or from the seller, including registration fees.
Where to pay
Registration fees are paid to the Register of Deeds or Land Registration Authority (LRA) where the real property is located.
When to pay
This is paid after the taxes on the sale of the property have been paid and the Certificate Authorizing Registration (CAR) and Tax Clearance (TCL) has been secured from the Bureau of Internal Revenue.
Take note that a CAR and TCL, once issued, should be presented to the Register of Deeds within two (2) years from issuance, otherwise it shall be deemed to have no effect and you will need to request for the issuance of a new CAR, following the requirements of Revenue Memorandum Order (RMO) No. 23-2010 dated March 15, 2010.
How to compute for the registration fee
To compute for the registration fee, you may refer to the registration fee table below, if the selling price does not exceed P1,700.00.00
If the selling price exceeds P1,700,000.00, You need to add P90 for every P20,000.00 or fraction thereof; In excess of P1,700,000.00, in addition to the fee of 8,796.00.
Registration Fee Table
|Value of Consideration or Selling Price|
|More Than||Not Exceeding||Registration Fee|
1. With selling price not exceeding P1,700,000.00. What is the registration fee if the selling price is P1,000,000.00?
If the selling price is 1,000,000.00, the registration fee would be P5,546, based on the Registration Fee table.
2. With selling price exceeding P1,700,000.00. What is the registration fee if the selling price is P2,000,000.00?
Since the selling price is greater than 1,700,000.00, we need to add P90.00 for everyP20,000.00 or fraction thereof; in excess of P1,700,000.00, in addition to the fee of 8,796.00
Registration Fee = ((P2,000,000.00 – P1,700,000.00)/P20,000.00)xP90.00 + P8,796.00
Registration Fee Calculator
Here’s our Registration Fee Calculator which is based on the table above from the LRA. Simply enter the selling price and click the “Calculate” button to compute for the Registration Fee.
Note: This calculator is new and is still undergoing testing. I would appreciate any feedback. Thanks! ~ Jay Castillo
What to bring
Bring the following:
- Owner’s duplicate copy of the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
- Deed Of Absolute Sale
- Certificate Authorizing Registration or CAR
- Tax clearance from the Office of the City/Municipal Treasurer’s office or assessor’s office
- Transfer Tax Receipt and other supporting documents (In Quezon City for example, you also need to bring a Certification that transfer tax has been paid, and it has to have a security seal)
- If the property is a condominium unit, you also need to submit a Certificate Of Management.
- If you are If you are transacting on behalf of the owner, bring an authorization letter duly signed by the owner (if you have a notarized Special Power of Attorney (SPA), much better), plus a photocopy of the owner’s valid government-issued ID
- Certified true copy of the Secretary’s certificate if the seller is a corporation
Other transfer fees to consider
Let me reiterate what I said earlier, there are other transfer fees you need to know, and these are as follows:
- Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT) whichever is applicable
- Value Added Tax or VAT (if applicable)
- Documentary Stamps Tax for the purchase and the loan
- Transfer Tax
- Business Tax (if applicable)
Who shoulders transfer fees?
Usually, the major taxes like CGT, CWT, and VAT are shouldered by the seller, and all the rest (including the registration fee) are shouldered by the buyer.
However, it really depends on what is currently in place and/or what all parties have agreed upon. For example, all taxes and fees are shouldered by the buyer when buying foreclosed properties from Unionbank.
Cherry Vi M. Saldua-Castillo
Text by Jay Castillo and Cherry Castillo. Copyright © 2008 – 2021 All rights reserved.
Full disclosure: Nothing to disclose.