Real Estate 101: Key Terms Simplified
When you're dealing with property in the Philippines, you'll encounter three core documents more than any others. Understanding what they are and why they matter is the first step in taking control of your investment.
What is Real Estate?
“Real estate" refers to property, which includes the land and any structures permanently attached to it. The common types you’ll own or invest in are:
- House and Lot: A residential structure built on a specific piece of land.
- Condominium (Condo Unit): An exclusive space within a multi-unit building, where you own the unit itself but share ownership of the common areas.
- Land: Raw, undeveloped property, often agricultural or commercial.
The "Big Three" Documents Explained Simply
Forget the complicated legal names. When managing your property, you only need to focus on these three things. They are the keys to your ownership and compliance.
| Document Name | What It Is | Why You Need It |
|---|---|---|
| Title (or Certificate of Title) | The definitive, legal Proof of Ownership. | It proves you are the true owner. You cannot sell, mortgage, or transfer property without this. |
| Deed (e.g., Deed of Sale) | The Contract that transferred ownership to you. | It serves as the legal record of the transaction (buy, inheritance, donation). It’s needed for title transfer. |
| Tax Declaration (TD) | The Proof of Payment used by the local government. | It proves that you are updated on your Real Property Tax (RPT) and is required for all transactions. |
Other Essential Terms You Will Encounter
- Registry of Deeds (RD): The national government office responsible for keeping the official copies and issuing all Titles. This is where your new title is finally released.
- Bureau of Internal Revenue (BIR): The national tax authority. You must secure a Certificate Authorizing Registration (CAR) from the BIR before you can transfer a title.
- LGU (Local Government Unit): This is your city or municipal hall. They handle the Tax Declaration updates and collection of the annual Real Property Tax (RPT).
- Capital Gains Tax (CGT): The tax paid by the seller on the profit gained from the sale of the property.
- Documentary Stamp Tax (DST): A national tax applied to the documents that transfer property ownership.
Understanding these simple terms will empower you to communicate confidently with your family, your representative, or any Real estate professional.
