MODES OF ACQUIRING LAND TITLES:

1. Title by public grant conveyance of public land by government to a private

individual
2. Title by acquisitive prescription open, continuous, exclusive, notorious
possession of a property
3. Title by accretion alluvion
4. Title by reclamation filling of submerged land by deliberate act and reclaiming
title thereto; government
5. Title by voluntary transfer private grant; voluntary execution of deed of
conveyance
6. Title by involuntary alienation no consent from owner of land; forcible
acquisition by state
7. Title by descent or devise hereditary succession to the estate of deceased
owner
8. Title by emancipation patent or grant for purpose of ameliorating sad plight of
tenant-farmers; not transferable except by hereditary succession
Chapter 2: TORRENS SYSTEM ORIGIN, NATURE & GENERAL
CHARACTERISTICS
ADVANTAGES:
1. Abolishes endless fees
2. Eliminates repeated examination of titles
3. Reduces records enormously
4. Instantly reveals ownership
5. Protects against encumbrances not noted on the Torrens certificate
6. Makes fraud almost impossible
7. .It assures
8. Keeps up the system without adding to burden of taxation; beneficiaries of the
system pay the fees
9. Eliminates tax titles
10. Gives eternal title as state ensures perpetuity
11. Furnishes state title insurance rather than private title insurance
12. Makes possible the transfer of titles or of loans within the compass of hours
instead of a matter of days
PURPOSE OF TORRENS LAW:
quiet title to land once registered, owner might rest secure
PERSONS BOUND WHEN TITLE NOT REGISTERED
1. Grantor
2. Heirs & devisees
3. Persons with actual notice

PROCEDURE IN LAND REGISTRATION CASE:

1.
2.
3.
4.

Survey of land by Bureau of lands or duly licensed private surveyor

Filing of application for registration by applicant
Setting of date of initial hearing of application by RTC
Clerk of court to transmit to Land Registration Authority the application, date of
initial hearing & other pertinent docs
5. Publication of notice of filing of application, date & place of hearing in OG and
in newspaper of general circulation
6. Service of notice contiguous owners, occupants & those who have interest in
property
7. Filing of answer or opposition to application
8. Hearing of case by RTC
9. Promulgation of judgment by court
10. Issuance of decree by RTC decision; Instruct land registration authority to issue
decree of confirmation & registration
11. Entry of decree of registration in Land Titles Administration
12. Send copy of decree to Register of Deeds
13. Transcription of decree of registration in registration book & issuance of the
owners duplicate original certificate of title of the applicant by the Land
registration Authority - upon payment of prescribed fees
VAT Taxpayer
The VAT taxpayer in this case is a person who is engaged in the real estate business and is the seller of a real property
classified as an ordinary asset.
Taxpayers engaged in the real estate business shall refer collectively to real estate dealers, real estate developers, and/or real
estate lessors.
A taxpayer whose primary purpose of engaging in business, or whose Articles of Incorporation states that its primary
purpose is to engage in the real estate business shall also be deemed to be engaged in the real estate business.

How about those not in the above list?

Registration with the HLURB or HUDCC as a real estate dealer or developer shall be sufficient for a taxpayer to be
considered as habitually engaged in the sale of real estate.
If the taxpayer is not registered with the HLURB or HUDCC as a real estate dealer or developer, he/it may nevertheless be
deemed to be engaged in the real estate business through the establishment of substantial relevant evidence (such as
consummation during the preceding year of at least six (6) taxable real estate sale transactions, regardless of amount;
registration as habitually engaged in real estate business with the Local Government Unit or the Bureau of Internal Revenue
(BIR), etc.).
A person who is not engaged in the real estate business but who is selling real property which is classified as its ordinary asset is
also subject to VAT.
This is pursuant to RR No. 4-07 which provides:
However, even if the real property is not primarily held for Sale to customers or held for lease in the ordinary course of
trade or business but the same is used in the trade or business of the seller, the sale thereof shall be subject to VAT being a
transaction incidental to the taxpayers main business.
Thus, if a taxpayer is engaged in the restaurant business and sells his restaurant building which he used in his restaurant business,
the said sale shall be subject to VAT, notwithstanding that the taxpayer is not engaged in the real estate business.
Banks are not considered as VAT taxpayers. Thus, their sale of foreclosed properties are not subject to VAT. They are subject
instead to Creditable Withholding tax (CWT). Their foreclosed assets, when sold, are considered as ordinary assets but banks are
not considered as engaged in the real estate business.
VAT rate

The sale of properties which may be considered as ordinary assets would be subject to the 12%] VAT effective February 1, 2006.
Tax base of output VAT
The tax base of the 12% output VAT is the selling price (SP) or the fair market value (FMV) of the property whichever is higher.
If VAT is not billed separately in the document of sale, the selling price stated in the deed is deemed inclusive of VAT. Thus, to
get the selling price without VAT, divide the selling price in the deed by 1.12. To get the VAT, multiply the selling price without
VAT by .12.
What if the gross selling price in the document of sale is equal to the zonal value or market value of the property? Will the selling
price without VAT be effectively lower than the zonal or market value of the property?
No, the zonal/market value shall be considered as net of the output VAT.
***the VAT should be separately indicated in the document of sale and official receipt as there are penalties for noncompliance.
VAT payable
The amount of VAT payable is the difference between the output VAT and input VAT. Keep the VAT-registered official receipts
(for services purchased) and invoices (for goods purchased) supporting your business expenses so you can claim input VAT
which can reduce your output VAT payable.