05/04/2025
6 Steps Before Buying Land
Step 1: Obtain a Copy of the Title
When a real estate agent or landowner offers a property for sale, the first step is to get a copy of the land title.
Investigate at the Register of Deeds using this copy to ensure the land is free of encumbrances such as mortgages, claims, or other issues. Verify that the copy matches exactly with the records at the Register of Deeds to confirm it is genuine and problem-free.
Step 2: Conduct a Relocation Survey
Hire a Geodetic Engineer to conduct a relocation survey of the land boundaries.
Ensure there are no structures or fences from adjacent lots encroaching on the property you intend to buy.
Step 3: Execute a Deed of Sale
If the land is problem-free, proceed to execute a Deed of Sale or "Contract of Sale".
Both the seller and buyer must sign the contract, and it must be notarized.
Step 4: Pay Documentary Stamps
Within one month from the notarization of the Deed of Sale, pay the Documentary Stamps.
This is a crucial payment that must be made promptly to avoid complications.
Step 5: Pay Capital Gains Tax
The seller must pay the Capital Gains Tax to the BIR (Bureau of Internal Revenue) because they earned from the sale.
The BIR will issue a Certificate of Authority to Register, certifying that all taxes have been paid and authorizing the transfer of the title to the buyer.
Step 6: Transfer Fees and Title Transfer
Once you have the Certificate of Authority to Register, take it to the Register of Deeds.
Pay the Transfer Fees, which are relatively inexpensive.
The Register of Deeds will surrender the Ownerโs Copy of the title, and you will need to wait for the title transfer process to be completed. Continuous follow-up is necessary because the process at the Register of Deeds can take some time.
Following these steps ensures that the land purchase process is smooth and free from legal issues.
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