REGULATORY UNCERTAINTY

Not too long ago, one document could quietly make a property almost impossible to sell: the previous BIR Certificate Authorizing Registration (CAR).

See, before June 2016, sellers were required to present the CAR from when they originally acquired the property. So if you bought a condo from a developer years earlier, you were expected to keep that CAR indefinitely. When you eventually sold the unit, the BIR will require you to present it as proof that the proper taxes had been paid during your acquisition.

And this is where the horror story begins.

Several condominium projects in BGC reportedly had unresolved issues involving their developers and the BIR. Because of this, CARs were not released and, in certain cases, titles were not fully transferred from the developers to the buyers.

As a result, subsequent owners encountered difficulties selling or transferring their units because the previous CAR could not be produced. Thus, some owners became trapped holding otherwise legitimate properties.

So what changed?

When Cesar Dulay became BIR Commissioner, the BIR eventually relaxed the requirement to present the previous CAR. This helped unblock numerous transactions that had been stuck for years.

But here’s the problem...

Regulatory requirements can change depending on policy direction and leadership. If stricter interpretations are revived in the future, properties with unresolved historical tax documentation issues could once again face transfer complications.

And this issue wasn’t limited to previous CARs.

At one point, the BIR also scrutinized the declared source of funds used to acquire properties. This sometimes became an issue when parents purchased properties but wanted the titles placed partly or entirely under their children’s names. Questions could arise regarding the child’s financial capacity to acquire the asset.

We’re now roughly two years away from another change in administration.

Will some of these stricter interpretations eventually return?