Unwritten Rule #6

Unwritten Rule #6: You can't pay the Registration Fee or the Transfer Tax until the BIR Certificate Authorizing Registration (CAR) is released.

When transferring ownership documents, new owners pay three different taxes/fees to three government agencies: BIR, the Registration of Deeds (or Land Registration Authority; "LRA"), and the City Assessor.

But unlike the BIR, where people could pay any time (a.k.a. "voluntary payments"), the LRA or the City Assessor don't allow this. They require the BIR CAR to be issued first before accepting any payment.

Usually, this doesn't pose a problem because the 60-day deadline from the date of execution of the Deed of Absolute Sale is more than sufficient. It usually takes the BIR to issue the CAR within a month (conservatively). However, certain instances could delay the issuance of the BIR CAR (e.g., claiming Capital Gains Tax exemption; unforeseen system outages).

For example, the BIR's system outage last October prevented CARs from syncing with the LRA's system. So, when taxpayers presented the CAR to the LRA, they didn't have it in their system. Imagine the scare this caused since this was the same notification the LRA gets whenever a fake CAR is submitted. Taxpayers had to reprocess the CAR and wait a few weeks for a new one to be issued.

Even if the delays were out of the taxpayer's control, the City Assessor/LRA would continue to penalize the transaction for late payment.

I hope the LRA and the City Assessor change their policies and allow voluntary payments.