Processing of CAR on Sale of Real Property
Documents Required:
Taxpayer Identification
Number (TIN) of Seller/s and Buyer/s
Photocopy of ID of seller
& buyer (take note of the birthdates)
Notarized Deed of Sale
Certified True Copy of Tax
Declaration
Certified True Copy of TCT
Certificate of No
Improvement
Official Receipt or
Acknowledgement Receipt (whichever is applicable) issued by the seller
Certified true copy of
previous CAR for TCT issued starting 2007
Proof of payment of taxes
(Capital Gains Tax or CWT and DST)
Cancellation of mortgage,
if applicable
Board Resolution showing
authority to sell and authorized signatories to the Deed of Sale (if Seller is
a corporation)
Notarized Original Special
Power of Attorney (SPA) of authorized representative transacting with BIR
Rjb 9/28/2019
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Capital
Gains Tax is a tax imposed on the gains presumed to have been realized by the
seller from the sale, exchange, or other disposition of capital assets located
in the Philippines, including pacto de retro sales and other forms of
conditional sale.
CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF REAL
PROPERTY CLASSIFIED AS CAPITAL ASSETS (TAXABLE AND EXEMPT)
Tax Form
BIR Form 1706
– Final Capital Gains Tax Return (For Onerous Transfer of Real Property
Classified as Capital Assets -Taxable and Exempt)
Documentary Requirements
Mandatory Requirements [additional two (2) photocopies of each document]:
Taxpayer Identification
Number (TIN) of Seller/s and Buyer/s;
Duly Notarized Original
Deed of Absolute Sale/Deed of Transfer;
Certified True Copy/ies of
the Tax Declaration at the time or nearest to the date of the transaction
issued by the Local Assessor’s Office for land and improvement;
Certified True Copy/ies of
Original/Transfer/Condominium Certificate/s of Title (OCT/TCT/CCT);
Sworn Declaration of No
Improvement by at least one (1) of the transferees or Certificate of No
Improvement issued by the Assessor’s Office, if applicable;
Validated return and
Original Official Receipt/Deposit Slip as proof of payment; for no payment
return, copy of Acknowledgment Receipt of return filed thru eBlRForms;
Acknowledgment receipt of
proceeds of sale from the seller;
Secretary’s Certificate or
Board Resolution, approving the sale/transfer of the real property and
indicating the name and position of the authorized signatory to the Deed of
Sale/Assignment, if the seller/transferor is a corporation;
Duly Notarized Original
Special Power of Attorney (SPA) from the transacting party/ies if the person
signing is not one of the parties to the Deed of Transfer;
For sales made in prior
years [additional two (2) photocopies of each document]
Certified True Copy of
Deed of Sale/Assignment/Exchange or certification of notarization issued by the
Clerk of Court of City/Municipality or Regional Trial Court (RTC) or the Office
of the Executive Judge of the City/Municipality where the Notary Public is
registered or certification of notarization from the National Archives Office
Other Additional Requirements, if applicable [additional two (2) photocopies of
each document]:
Duly Notarized Original
Special Power of Attorney (SPA), if the person transacting/processing the
transfer is not a party to the transaction
Certification from the
Philippine Consulate if document is executed abroad
Location Plan/Vicinity map
issued by the Local Assessor’s Office if zonal value cannot be readily
determined from the documents submitted
Certificate of
Exemption/BIR Ruling issued by the Commissioner of Internal Revenue or his
authorized representative, if tax exempt
Such other documents as
may be required by law/rulings/regulations/etc.
Procedures
Who shall file
The Capital Gains Tax
Return (BIR Form No. 1706) shall be filed in triplicate copies by the
Seller/Transferor who are natural or juridical whether resident or
non-resident, including Estates and Trusts, who sell, exchange, or dispose of a
real property located in the Philippines classified as capital asset as defined
under Sec. 39 (A) (1) of RA No. 8424. The term “sale” includes pacto de retro
sale and other forms of conditional sales. The transaction may be taxable or
exempt.
Taxpayers who are filing
BIR Form No. 1706 are excluded in the mandatory coverage from using the
eBIRForms (Section 2 of RR No. 9-2016)
When and Where to File and Pay
The Capital Gains Tax
Return (BIR Form No. 1706) shall be filed and paid within thirty (30) days
following the sale, exchange or disposition of real property, with any
Authorized Agent Bank (AAB) or Revenue Collection Officer (RCO) of the Revenue
District Office (RDO) having jurisdiction over the place where the property
being transferred is located.
When the return is filed with
an AAB, taxpayer must accomplish and submit BIR-prescribed deposit slip, which
the bank teller shall machine validate as evidence that payment was received by
the AAB. The AAB receiving the tax return shall stamp mark the word “Received”
on the return and also machine validate the return as proof of filing the
return and payment of the tax by the taxpayer, respectively. The machine
validation shall reflect the date of payment, amount paid and transactions
code, the name of the bank, branch code, teller’s code and teller’s initial.
Bank debit memo number and date should be indicated in the return for taxpayers
paying under the bank debit system.
Filing and payment may
also be made using the electronic filing and payment facilities of the BIR
(i.e., EFPS/eBIRForms and G-cash, credit, debit card/prepaid card)
For transactions covered
by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3)
properties, the taxpayer can avail of the ‘fast lane’ pursuant to Revenue
Memorandum Circular (RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments
amounting to twenty thousand pesos (P 20,000.00) and below shall be paid in
cash while payments above twenty thousand pesos (P 20,000.00) shall be made
through Manager’s Check or Cashier’s Check to the RCO of the RDO having
jurisdiction over the place where the property being transferred is located.
Tax Rate
For real property - 6%.
Personal Note:
GUIDELINES WHEN ASSISTING FOR THE SELLER:
1. Prepare the above documentary requirements
2. Get the notarized Deed of Sale from the Buyer
3. Present the necessary documents to BIR for the ONETT computation and preparation of CWT, DST tax returns and certification fee for payment.
4. The contact person in the ONETT computation sheet should be the representative of the Buyer.
5. Go to BIR Accredited Banks for payment of CWT, DST and certification fee (Let the buyer pay himself or may assist him)
6. After payment, the Seller shall keep for himself the original copy of the CWT payment.
7. Submit all the documentary requirements to the BIR for the processing of CAR/Tax Clearance (BIR will issue a Claim Slip)
8. The contact person shall keep the Claim Slip for him to pick-up the CAR/Tax Clearance
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