Bureau of Local Government Finance Opinion

October 19, 2012 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Engr. Roderick R. Milana, RME, RREA Provincial Assessor Mati, Digos City, Davao del Sur Sir : This refers to your letter dated May 15, 2012, requesting this Bureau to issue a local assessment regulations pertaining to the "basic requirements for the issuance of tax declaration of transferred real property" which will serve as the basis in requiring the taxpayer to submit a copy of the deed of conveyance duly registered with the Registry of Deeds, especially for untitled property together with the other basic requirements. The said request was made in view of your contention that the said requirements were not included in the final version of the Manual on Real Property Appraisal and Assessment Operations (MRPAAO). A perusal of your submitted copy of the draft MRPAAO reveals that the said topic was actually included in its final version under Chapter IV, Section 5, which is quoted below: "Section 5. Requirements for the Appraisal of Land Declared for the First Time. "A. For Untitled Property: "1. A survey plan prepared by a duly licensed Geodetic Engineer duly approved by the Land Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR); "2. A certification from the Community Environment and Natural Resources Office (CENRO), stating among others, that the land is within the alienable and disposable area; "3. An affidavit of ownership and/or Sworn Statement declaring the Market Value of Real Property filed by the owner/administrator; Affidavit that the applicant is in long, continuous and notorious possession of the property. aSAHCE "4. A certification from the barangay captain that the declarant is the present possessor and occupant of the land and the certification of the adjoining owners duly sworn to by the barangay captain and/or the municipal mayor; "5. An ocular inspection/investigation report by the assessor or his authorized representative; "In cases of newly discovered lands wherein the possessor/occupant whose rights can not be established, the foregoing requirements under (1) to (5) hereof, shall likewise apply; "In case of lands of the public domain occupied and possessed by National Cultural Communities prior to July 4, 1955, a certification from National Commission for Indigenous Peoples (NCIP) shall be submitted. "In case of an untitled property being claimed by two or more persons whether natural or juridical a tax declaration shall be issued for each claimants. "B. For Titled Property: "1. A certified true copy of free patent, homestead or miscellaneous sales application must be submitted; "2. A certified true copy of the title issued by the Registrar of Deeds, certifying among others, that the original copy of which is intact and existing in the said registry; and "3. Approved survey plan." Further, attention is invited to the ruling issued by this Bureau as embodied under its letter dated October 27, 2004, copy enclosed, which similarly treats on a similar subject matter, which provides in part, to wit: "xxx xxx xxx. " Evidently, after the sale of real estate, depending on the agreement between the buyer and the seller, it is necessary to pay the corresponding capital gains tax to the BIR for the issuance of the Certificate Authorizing Registration (CAR) for presentation to and as a requirement of the Register of Deeds for the transfer of the title of the subject property from the former owner to the new owner. "Relatedly, the BLGF under the 2nd Indorsement dated May 26, 1993, . . ., treating on a similar subject matter, made the following clarification: SHCaEA 'Accordingly, unless the Deed of Sale executed. . . conveying the . . . real properties . . . is finally registered with the Register of Deeds . . . that Office could not effect the cancellation and transfer of the . . . tax declarations . 'It is understood that the. . . requirements should likewise be complied with, viz.: '1. That the real property taxes due on the subject lot be fully paid; '2. That the corresponding tax on the transfer of ownership has been paid; '3. That the certification of payment of the capital gains tax issued by the Bureau of Internal Revenue (BIR) is presented to that Office. ' (Underscoring ours) " Clearly, therefore, the issuance/transfer of tax declarations of real properties conveyed, whether previously registered or unregistered would require the payment of the capital gains tax ." (Underlining Supplied) Evidently, certified true copy of title issued by the Registrar of Deeds is among the basic requirements as provided for under the abovequoted provision of the Manual. It is worth to note further, that this Bureau believes that the issuance of tax declarations on the basis of deeds of conveyance not registered with the Registry of Deeds and without prior payment of the capital gains tax is bereft of any legal basis. Thus, in view of the above discussion, your abovementioned request for the issuance of a local assessment regulations is deemed no longer necessary. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director