What are the legal documents needed in selling land of a deceased owner?

In the Philippines, selling land owned by a deceased person involves a legal process that requires specific documents to be presented and processed. The legal documents needed for selling land of a deceased owner are as follows:

1. Death Certificate: The death certificate of the landowner is a crucial document that confirms their passing. It is required to establish the fact that the owner is deceased and cannot execute any transactions.

2. Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT): These are the primary documents proving ownership of the land. The TCT or OCT should be presented to verify the land's legal owner and to initiate the transfer of ownership to the buyer.

3. Extrajudicial Settlement of Estate (EJSE) or Affidavit of Self-Adjudication (ASA): If the deceased owner left a will, the heirs can execute an EJSE. If there is no will, they can execute an ASA. These documents outline the distribution of the deceased's estate among the legal heirs, including the land being sold.

4. Deed of Sale: This is a written agreement between the seller's heirs and the buyer, stating the terms and conditions of the sale. It must be notarized.

5. Tax Identification Number (TIN): The TIN of both the seller's heirs and the buyer should be included in the documents.

6. Certificate Authorizing Registration (CAR): This document authorizes the transfer of the property's title to the buyer.

7. Barangay Clearance: A clearance issued by the local barangay (village) where the property is located.

8. Real Property Tax Clearance: A certificate indicating that the property taxes have been paid up to date.

9. Notarized Affidavit of the Buyer: This affidavit states that the buyer is not related to the seller within the fourth degree of consanguinity or affinity, as mandated by the law.

10. Other documentary requirements: Depending on the specific circumstances, additional documents may be required, such as the seller's heirs' valid IDs, proof of relationship, and other supporting papers.

Please note that the legal process of selling land owned by a deceased owner can be complex and time-consuming. It is highly recommended to seek the assistance of a lawyer or a qualified real estate professional to ensure that all legal requirements are met and the transaction is conducted smoothly and legally.

Source: Ziggurat Real Estate Corp.

BIR finalizes 1 percent tax for online sellers

The Bureau of Internal Revenue (BIR) is in the final phase of its plan to impose a one percent withholding tax on online platform providers that people use to sell goods and services amid the continued surge in digital transactions.

Based on the final draft of the revenue regulation posted on its website over the weekend, the BIR will impose a creditable withholding tax on income payments made by electronic marketplace operators to online merchants.

The BIR sought comments from stakeholders on the new revenue measure last April.

Withholding tax is a kind of tax on the salary earned by a certain employee.

Based on the current framework, employers are required to deduct a certain percentage of their employee’s salary which, in turn, is remitted to the BIR.

As online sales transactions continue to increase, further expedited by the pandemic, the BIR has been looking at ways to tax online sellers.

The final draft of the revenue regulation, which is subject to final comments until Oct. 27, imposes a creditable withholding tax of one percent on one-half of the gross remittances of the online platform providers to the sellers of the goods and services.

The withholding tax imposed, however, will not apply if the annual total gross remittances to an online merchant for the past taxable year has not exceeded P250,000.

Also excluded are online sellers with cumulative gross remittances to an online merchant in a taxable year that have not yet exceeded P250,000, as well as those cooperatives duly registered with the BIR with a valid certificate of tax exemption.

According to BIR, electronic marketplace refers to a digital platform whose business is to connect online consumers with online merchants, facilitate and conclude the sales, process the payment of the products, goods or services through the platform.

It also facilitates the shipment of goods or provides logistics services and post-purchase support within such platforms, and otherwise retains oversight over the consummation of the transaction.

This includes the marketplace for online shopping, food delivery platforms, platforms for booking of resort, hotel, motel, inn, house, condominium unit, bed space, room for rent, and other similar lodging accommodations, and other service or product marketplaces.

The BIR said the withholding tax imposed shall be in addition to the existing withholding tax obligations being imposed to the e-marketplace operators.

These are withholding taxes on payment to transportation contractors for the carriage of goods and merchandise and commissions on the goods and services actually sold, aside from the consideration for the use of the digital platform.

“The e-marketplace operator shall not allow the sale of goods or services in the e-marketplace by online sellers who are not duly registered with the BIR, whether or not the online sellers whose remittances do not exceed P250,000 or are members of a duly registered cooperative,” the BIR said.

Since tax involved and being withheld is income tax, the burden of the tax is upon the seller although the mode of payment of the tax is through withholding by the buyer, or by the e-marketplace operator, in case the payment for the sale of goods or services were made therein.

Source: Philstar

How does the owner of a subdivision project acquire a license to sell

And when is he exempted from same?

The National Housing Authority upon proper application therefor, shall issue to such owner or dealer of a registered project a license to sell the project if, after an examination of the registration statement filed by said owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or dealer is of good repute, that his business is financially stable, and that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent. A license to sell and performance bond shall not be required if:

(a) Sale of a subdivision lot resulted from the partition of land among co-owners and co-heirs.

(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona fide debt.

(Section 5 and 7, P.D. 957)

Before an owner of a subdivision or condominium project may sell, he or she is required to secure a license to sell. Presidential Decree No. 957 or the Subdivision And Condominium Buyers’ Protective Decree is instructive.

The law provides that –

License to sell. Such owner or dealer to whom has been issued a registration certificate shall not, however, be authorized to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project within two weeks from the registration of such project.

The Authority, upon proper application therefor, shall issue to such owner or dealer of a registered project a license to sell the project if, after an examination of the registration statement filed by said owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or dealer is of good repute, that his business is financially stable, and that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent.

(Section 5, P.D. 957)

Aside from license to sell, are there any other requirements before an owner of subdivision/condominium project can sell?

Yes. He/she must have filed a performance bond.

Section 6 of P.D. 957 provides that, “No license to sell subdivision lots or condominium units shall be issued by the Authority under Section 5 of this Decree unless the owner or dealer shall have filed an adequate performance bond approved by said Authority to guarantee the construction and maintenance of the roads, gutters, drainage, sewerage, water system, lighting systems, and full development of the subdivision project or the condominium project and the compliance by the owner or dealer with the applicable laws and rules and regulations.

The performance bond shall be executed in favor of the Republic of the Philippines and shall authorize the Authority to use the proceeds thereof for the purposes of its undertaking in case of forfeiture as provided in this Decree.

Are there any instances where an owner is exempted from securing a license to sell and performance bond?

Yes. Section 7 of P.D. 957 provides that, a license to sell and performance bond shall not be required in any of the following transactions:

(a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs.

(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona fide debt.

When can license to sell be suspended?

Section 8 of P.D. 957 provides that, upon verified complaint by a buyer of a subdivision lot or a condominium unit in any interested party, the Authority may, in its discretion, immediately suspend the owner’s or dealer’s license to sell pending investigation and hearing of the case as provided in Section 13 hereof.

The Authority may motu proprio suspend the license to sell if, in its opinion, any information in the registration statement filed by the owner or dealer is or has become misleading, incorrect, inadequate or incomplete or the sale or offering for a sale of the subdivision or condominium project may work or tend to work a fraud upon prospective buyers.

The suspension order may be lifted if, after notice and hearing, the Authority is convinced that the registration statement is accurate or that any deficiency therein has been corrected or supplemented or that the sale to the public of the subdivision or condominium project will neither be fraudulent not result in fraud. It shall also be lifted upon dismissal of the complaint for lack of legal basis.

Until the final entry of an order of suspension, the suspension of the right to sell the project, though binding upon all persons notified thereof, shall be deemed confidential unless it shall appear that the order of suspension has in the meantime been violated.

(Sections 5-8 of the Presidential Decree No. 957 or the Subdivision and Condominium Buyers’ Protective Decree)

Source: Alburolaw