Registration by Register of Deeds of Documents Transferring Real Property

August 30, 1991 BIR RULING NO. 168-91 49 (a) (4) 000-00 168-91 Gentlemen : This refers to your letter dated April 19, 1991 which was referred to this Office, requesting in effect a ruling as to whether or not your Register of Deeds may proceed with the transfer of government owned lands in the name of the Republic of the Philippines thru DAR, without requiring the presentation of Realty Tax and Capital Gains Tax Clearance. It is represented that as shown in your attached photo copy of the newspaper clipping (Bulletin Today, 15 April, 1991), your Register of Deeds was pinpointed as one of the problem affecting the implementation of agrarian reform because of said Registrar's refusal to register the transfer of government-owned lands in the name of the Republic of the Philippines thru DAR owing to non-payment of capital gains tax and other transfer taxes accruing from the previous sale transfer of such properties; that it is of common knowledge that the payment of realty tax and capital gains tax are essential requirements in the registration of the transfer of real properties (Section 12 PD 464 and Batas Pambansa Bilang 37, respectively); and that you are seeking our opinion to expedite the registration of the CLCA generated by DAR pursuant to E.O. No. 407 and to dispel the notion that your Office (through the Register of Deeds) is the cause of the slow implementation of E.O. No. 407. In reply, please be informed that under Section 49 (a) (4) of the Tax Code, as amended, not registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner of Internal Revenue or his duly authorized representative has certified that such transfer has been reported, and the tax therein imposed, if any, has been paid. It is noted that the abovementioned provision of the Tax Code is mandatory in character directing the Register of Deeds not to effect registration of any document transferring real property unless the Commissioner of Internal Revenue or his duly authorized representative has certified that such transfer has been reported, and the tax imposed as a consequence of such transfer of real property, if any, has been paid. Accordingly, this Office is of the opinion as it hereby holds that your Register of Deeds may not proceed with the transfer of government-owned lands in the name of the Republic of the Philippines thru DAR, without requiring the presentation of Certificate Authorizing Registration from this Office certifying that the taxes due (capital gains tax/creditable withholding tax and documentary stamp tax) on the previous sale-transfer of such real properties has been paid and the said sale transaction has been duly reported to this Office for such purpose or the said sale transaction is exempt from the payment of the aforesaid taxes under the provision(s) of some other laws, as in the case of sale of realty covered by Section 4 of Executive Order No. 228 or by Section 9 of Executive Order No. 229. However, insofar as payment of realty tax on the said real properties is concerned, it is suggested that your request be directed to the local government unit concerned since the enforcement and collection of the said tax pertains to local government units. cdt Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge