BIR Ruling No. 187-15

June 8, 2015 BIR RULING NO. 187-15 PD 1529; 000-00 Maximo N. Delute Jr. Km. 26 Francisco Subdivision Calinan Davao City Gentlemen : This refers to your letter dated August 1, 2012 requesting on behalf of your minor daughter, Cristina V. Delute, for Certificate of Tax Exemption relative to your plan to execute a Deed of Exchange of Title. It is represented that on May 12, 2007, Cristina V. Delute, minor, represented by her father Maximo N. Delute Jr. bought a parcel of land from Lourdes A. Ali-Estilles as evidenced by the Deed of Absolute Sale; that on June 27, 2007, a Certificate Authorizing Registration was issued relative to the said transaction; that as a result, the Register of Deeds issued Transfer Certificate of Title Nos. T-420320 in the name of Lourdes A. Ali-Estilles and T-420321 in the name of Cristina V. Delute; that you discovered that the Technical Description of Lot 456-C-4-G-1, Psd-11-100072 was erroneously recorded as Lot 456-C-4G-2, Psd-11-100072 wherein both lots have the same area; and that Maximo N. Delute Jr. whose name appeared in the Title No. T-420321 requested to swap from T-420321 to T-420320. In connection with the foregoing, you are requesting for a Certificate of Tax Exemption relative to your plan to execute a Deed of Exchange of Title. In reply, please be informed that Section 2 of Presidential Decree (PD) 1529 1 partly provides: Sec. 2. Nature of registration proceedings; jurisdiction of courts . Judicial proceedings for the registration of lands throughout the Philippines shall be in rem, and shall be based on the generally accepted principles underlying the Torrens System. Courts of First Instance shall have exclusive jurisdiction over all applications for original registration of title to lands, including improvements and interests therein, and over all petitions filed after original registration of title, with power to hear and determine all questions arising upon such applications or petitions. ... Pursuant to the above provision, the Regional Trial Court (formerly Court of First Instance) has the authority to act, not only on applications for original registration of title to land, but also on all petitions filed after the original registration of title. Thus, it has the authority and power to hear and determine all questions arising from such applications or petitions. For purposes of securing a Certificate Authorizing Registration (CAR) before the Register of Deeds issues new titles, the parties, in order to correct the mistake or inadvertence in their respective titles, have to go first to the regular court and present, in the process, the Deed of Exchange wherein they agreed to exchange their respective properties with that of the other without any monetary consideration. Thus, any change or amendment thereto should be done by seeking judicial relief, since the properties involved are titled in the name of respective individuals, only then, the parties may apply from the BIR to determine if the transaction is exempted from Capital Gains Tax (CGT) and Documentary Stamp Tax. ISHCcT Accordingly, this Office finds no factual and legal basis to grant your request. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue Footnotes 1. AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR OTHER PURPOSES.