Deed of Absolute Sale (Philippines) — Free Sample and Generator

DEED OF ABSOLUTE SALE

KNOW ALL MEN BY THESE PRESENTS:

That I, [JUAN M. DELA CRUZ], of legal age, Filipino, married to [ANA S. DELA CRUZ], and a resident of [123 Mabini Street, Barangay Santo Niño, Quezon City], hereinafter referred to as the VENDOR,

                              — and —

[MARIA D. SANTOS], of legal age, Filipino, single, and a resident of [45 Rizal Avenue, Barangay Poblacion, Antipolo City], hereinafter referred to as the VENDEE,

WITNESSETH: That —

WHEREAS, the VENDOR is the absolute and registered owner of a parcel of land, together with the improvements thereon, situated in [Barangay San Roque, Antipolo City], more particularly described as follows:

     "A PARCEL OF LAND (Lot 5, Block 3 of the consolidation-subdivision plan Pcs-13-000123),
     situated in the Barangay of San Roque, City of Antipolo, Province of Rizal, containing
     an area of TWO HUNDRED FIFTY (250) SQUARE METERS, more or less, covered by Transfer
     Certificate of Title No. 123456 of the Registry of Deeds for the Province of Rizal."

WHEREAS, the VENDOR has offered to sell, and the VENDEE has agreed to buy, the said property under the terms and conditions hereinafter set forth;

NOW THEREFORE, for and in consideration of the sum of TWO MILLION FIVE HUNDRED THOUSAND PESOS ([P2,500,000.00]), Philippine currency, receipt of which in full is hereby acknowledged by the VENDOR to their entire satisfaction, the VENDOR does hereby SELL, TRANSFER and CONVEY, absolutely and unconditionally, unto the VENDEE, their heirs, successors and assigns, the above-described parcel of land together with all the improvements thereon, free from all liens and encumbrances.

1. The VENDOR warrants that they are the absolute owner of the property, that they have full right and authority to sell and convey the same, and that the property is free from all liens, encumbrances, claims and adverse interests of whatever nature.

2. The VENDOR further warrants the peaceful possession and enjoyment of the property by the VENDEE, and binds themselves to defend the title thereto against any and all claims of third persons.

3. The VENDOR warrants that all real property taxes due on the property up to and including the year [2026] have been fully paid, and undertakes to deliver the corresponding tax clearance and the owner's duplicate certificate of title to the VENDEE upon the signing hereof.

4. The capital gains tax due on this sale under Section 24(D) of the National Internal Revenue Code, or where the property is an ordinary asset the creditable withholding tax and income tax due on this sale, shall be for the account of the [VENDOR]. The documentary stamp tax, the local transfer tax, the registration fees and all other expenses of transfer shall be for the account of the [VENDEE]. This allocation governs as between the parties only and does not affect the liability of the taxpayer designated by law.

5. The VENDOR undertakes to execute and deliver any and all further documents, and to appear before any office or agency, as may be necessary to effect the registration of this sale and the issuance of a new certificate of title in the name of the VENDEE.

6. Possession of the property shall be delivered to the VENDEE upon the signing of this instrument.

IN WITNESS WHEREOF, the parties have hereunto set their hands this ____ day of __________, 20____, at [Quezon City], Philippines.

______________________________          ______________________________
[JUAN M. DELA CRUZ]                      [MARIA D. SANTOS]
Vendor                                   Vendee
TIN: [123-456-789]                       TIN: [987-654-321]

WITH MY MARITAL CONSENT:

______________________________
[ANA S. DELA CRUZ]

SIGNED IN THE PRESENCE OF:

______________________________          ______________________________
Witness                                  Witness

REPUBLIC OF THE PHILIPPINES )
CITY OF [QUEZON CITY] ) S.S.
x----------------------------------------x

ACKNOWLEDGMENT

BEFORE ME, a Notary Public for and in [Quezon City], this ____ day of __________, 20____, personally appeared the above-named parties, exhibiting to me their competent evidence of identity, known to me and to me known to be the same persons who executed the foregoing Deed of Absolute Sale, and they acknowledged to me that the same is their free and voluntary act and deed.

This instrument, consisting of ____ page(s), including this page on which this acknowledgment is written, has been signed by the parties and their instrumental witnesses on each and every page hereof.

WITNESS MY HAND AND SEAL on the date and at the place first above written.

                                        ______________________________
                                        Notary Public

Doc. No. ______;
Page No. ______;
Book No. ______;
Series of 20____.

What the deed does, and what it does not

A deed of absolute sale transfers ownership between the parties from the moment it is executed and the property delivered. What it does not do, by itself, is make that ownership good against the rest of the world. For registered land, that requires registration with the Register of Deeds and the issuance of a new Transfer Certificate of Title in the buyer's name. Until then a second buyer who registers first can defeat you.

This is why the deed is the start of the process, not the end of it. Signing and paying, then leaving the title in the seller's name for years, is the single most expensive mistake in Philippine property transactions — penalties accumulate on the unpaid taxes, the seller may die or sell again, and what should have been a routine transfer becomes litigation.

Check these before you pay anything

1. 1

   Get a certified true copy of the title from the Register of Deeds

   Not from the seller — from the registry. Compare it against the owner's duplicate the seller shows you. Check the back page for annotations: mortgages, adverse claims, notices of lis pendens, section 4 Rule 74 annotations from an estate settlement.

2. 2

   Match the name on the title to the seller's ID

   Middle names, married names, spelling. A mismatch means an affidavit of discrepancy at best, and a different person at worst.

3. 3

   Check the civil status on the title

   If it says 'married to', you need the spouse's written consent. If the seller is now a widow or widower, you need the death certificate and, if the property was conjugal, the estate has to be settled before it can be sold.

4. 4

   Get the latest tax declaration and RPT clearance

   From the assessor and the treasurer. Unpaid real property tax follows the property, and the registry will not transfer without clearance.

5. 5

   Verify the property on the ground

   A relocation survey by a licensed geodetic engineer confirms that the lot on the title is the lot you are standing on. Overlapping titles and encroachments are common.

6. 6

   Check for occupants and tenants

   Agricultural tenants have security of tenure and rights of pre-emption and redemption under agrarian law. Informal settlers are a separate and slow problem.

First question: is the property a capital asset or an ordinary asset?

Nothing about the tax on a Philippine property sale can be worked out until this is settled, and it is the step most guides skip. The 6% final tax on BIR Form 1706 is imposed by section 24(D)(1) of the National Internal Revenue Code on gains presumed realised from the sale or other disposition of real property located in the Philippines and classified as a CAPITAL asset. If the property is an ordinary asset, section 24(D)(1) does not apply at all and there is no Form 1706 — the sale falls under the ordinary income-tax rules, with creditable withholding tax collected on the transaction and the gain reported in the seller's income tax return, and value-added tax may arise as well.

Taxes and deadlines after you sign

How to fill in the deed, clause by clause

1. 1

   The parties

   Full name, age, citizenship, civil status (and the spouse's name if married), and complete address. Add the TIN of both parties — the BIR requires it and it saves a trip.

2. 2

   The property description

   Copy the technical description from the title verbatim, including the lot and block numbers, the survey plan number, the area, and the title number and registry. Do not paraphrase. This is the clause the registry examiner checks first.

3. 3

   The consideration

   The price in words and figures. Understating the price to save on tax is tax evasion, and it also caps what you can prove you paid if the sale is later contested. The BIR values the property independently using its zonal valuation, so the saving is often illusory anyway.

4. 4

   The warranties

   Ownership, authority to sell, freedom from liens, peaceful possession, and the undertaking to defend the title. These are the buyer's protection and should not be struck out.

5. 5

   The tax allocation clause

   Custom is seller pays the tax on the transfer — the 6% capital gains tax where the property is a capital asset, the creditable withholding tax where it is an ordinary asset — and buyer pays DST, transfer tax and registration. But custom is not law, and neither is your clause. Section 135 of the Local Government Code puts the duty to pay the transfer tax on the seller, donor, transferor, executor or administrator, and the Tax Code names the seller for the 6% final tax. What the deed does is allocate the economic cost between you; the government still collects from whoever it made liable. Say who bears what, and say it in terms that also work if the property turns out to be an ordinary asset.

6. 6

   Marital consent

   If the seller is married and the property is conjugal or community property, the spouse signs. An absent spouse executes an SPA — consularised or apostillised if abroad.

7. 7

   Signatures on every page

   Both parties and both instrumental witnesses sign on each and every page, and the acknowledgment says so. Registries reject deeds where only the last page is signed.

Legal basis: Civil Code of the Philippines, arts. 1458 (contract of sale), 1477–1478 (transfer of ownership on delivery), 1495–1548 (obligations of the vendor and warranty against eviction); PD 1529 (Property Registration Decree), secs. 51–53 (registration as the operative act); National Internal Revenue Code secs. 24(D)(1), 39(A)(1) and 196 as amended by RA 10963, with Revenue Regulations No. 7-2003 on the capital-asset/ordinary-asset classification; RA 7160 secs. 135 and 151 on the local transfer tax; RA 11976 (Ease of Paying Taxes Act) and Revenue Regulations No. 6-2024 on filing, payment and reduced penalties for micro and small taxpayers.

What if…

1. 1

   …the land has no title, only a tax declaration

   A tax declaration is evidence of a claim and of tax payment — it is not proof of ownership. The land may be untitled private land, or it may still be public land. Take advice before buying, and expect a judicial or administrative titling process before you can ever register a transfer.

2. 2

   …the seller has died

   You cannot buy from a dead person. The heirs must first settle the estate — an extrajudicial settlement if there is no will and no debts — pay the estate tax, and get the title in their names or execute a settlement with sale.

3. 3

   …the title is mortgaged

   The mortgage is annotated on the title and follows the property. The mortgage must be released and the release annotated, or the buyer takes subject to it. Arrange for the buyer's payment to go first to the lender.

4. 4

   …the owner's duplicate title is lost

   Section 109 of PD 1529 applies: sworn notice of the loss to the Register of Deeds, then a petition in the Regional Trial Court, after notice and hearing, for the issuance of a new owner's duplicate. An affidavit of loss alone is not enough, and this is not “reconstitution under RA 26” — reconstitution under RA 26 and section 110 is for a lost or destroyed original certificate on file at the registry. Either way it adds months; factor it in.

5. 5

   …the price was already paid but the deed was never notarised

   The sale is still valid between the parties, but it cannot be registered. Either party can compel the other to execute the deed in the proper form — but that is a court case, so it is far cheaper to get it notarised now.