Clarification on the Provision of Section 135, in Relation to Section 151, Both of the Local Government Code (LGC) of 1991, and Its Implementing Rules and Regulations (IRR)

October 5, 2012 BLGF MEMORANDUM CIRCULAR NO. 076-12 TO : All Regional Directors for Local Government Finance; Provincial, City and Municipal Assessors and Treasurers; and Others Concerned SUBJECT : Clarification on the Provision of Section 135, in Relation to Section 151, Both of the Local Government Code (LGC) of 1991, and Its Implementing Rules and Regulations (IRR) For the information and proper guidance of all concerned, reiterated hereunder is Section 135, in relation to Section 151, both of the LGC of 1991, and its IRR, to wit: " SEC. 135. Tax on Transfer of Real Property Ownership . (a) The province may impose a tax on the sale, donation, barter, or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. The sale, transfer or other disposition of real property pursuant to R.A. 6657 shall be exempt from this tax. " (b) For this purpose, the Registrar of Deeds of the province concerned shall, before registering any deed, require the presentation of the evidence of payment of this tax. The provincial assessor shall likewise make the same requirement before cancelling an old tax declaration and issuing a new one in place thereof. Notaries public shall furnish the provincial treasurer with a copy of any deed transferring ownership or title to any real property within thirty (30) days from the date of notarization. " It shall be the duty of the seller, donor, transferor, executor or administrator to pay the tax herein imposed within sixty (60) days from the date of the execution of the deed or from the date of the property owner's death ." (Emphasis supplied) acSECT Evidently, the seller, donor, transferor, executor or administrator of the real property shall be liable to pay the transfer tax within sixty (60) days from the date of the execution of the deed. However, this does not preclude the buyer, donee or transferee to pay the transfer tax especially when there is a stipulation in the said deed. Hence, it should be understood that if the deed is silent as to who shall pay the transfer tax, it is the seller/donor/transferor shall pay the said tax. Accordingly, the concerned assessor shall require the presentation of the evidence of payment of transfer tax before cancelling an old tax declaration and issuing a new one in place thereof. On the other hand, the treasurer concerned is hereby advised to require the presentation of the deed of conveyance of real property in case there is an issue as to who shall rightfully assume the responsibility. The Provincial Assessors and Treasurers are hereby instructed to disseminate the contents of this Circular, to the Municipal Assessors and Treasurers within their respective jurisdictions, as well as to inform the respective Sanggunians in the preparation of their Ordinance pertaining to the subject matter. Be guided accordingly. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director