Law Summary
Requirement of Payment of Transfer Taxes and Issuance of Certificate Authorizing Registration (CAR)
- The Tax Reform Act of 1997 mandates payment of transfer taxes before property registration.
- Payment is evidenced by a Certificate Authorizing Registration (CAR) issued by the Bureau of Internal Revenue (BIR).
- The CAR carries a unique serial number, serving as proof of tax payment.
Legal Basis for Annotation of Incidents and Burdens on Registered Land
- Presidential Decree No. 1529 (Property Registration Decree) provides for registered land to be subject to legal burdens such as transfer taxes.
- The decree also permits annotation of such burdens on the Transfer Certificate of Title (TCT).
Purpose of Annotation of CAR Details in the Transfer Certificate of Title
- Annotation enables the verification and back-checking of transfer tax payments by the Register of Deeds.
- It ensures compliance with tax payment requirements before issuance of the TCT, preventing registration without tax compliance.
Directive for Annotation of CAR Details by the Land Registration Authority
- The Land Registration Authority, via the Register of Deeds, must annotate the following on the TCT:
- Serial number of the CAR
- Date of issuance of the CAR
- Revenue District Office Number that issued the CAR
- Name of the Revenue District Officer who signed the CAR
- The taxes paid as indicated in the CAR
- This annotation is mandatory prior to the issuance of the Transfer Certificate of Title.
Objectives of the Annotation Requirement
- To facilitate verification and ensure the payment of transfer taxes.
- To establish tax payment as a precondition for the issuance of transfer titles.
Scope of the Annotation Requirement
- Applies to transfers involving Original Certificates of Title, Condominium Certificates of Title, and Transfer Certificates of Title.
- Covers all real property transfers registered with the Register of Deeds.
Repealing Clause
- All prior executive issuances, rules, and regulations inconsistent with this memorandum are repealed or modified accordingly.
Effectivity Clause
- The memorandum order takes effect fifteen (15) days after publication in a national newspaper of general circulation.