Can we change the date of Deed of Sale of real property?

Question

The sold property has not yet been transferred by the buyer to his name using the Tax Dec. The original owner has already died. Can we execute the EJS this year and then execute another DOAS using this year's date? The original FOAS was executed in 2016. The consequences: the seller will pay a higher estate tax. From 2004 to 2025, the seller will pay lower capital gains tax. But this document will be legal

A A Abdullahi Law Firm · Accepted Answer

You can do that by following due process of law.

Recososa Law Firm · Answer

Hello. Attorney from from Cebu, Philippines. Thank you for your message and for raising a very practical yet complex question involving both documentary strategy and tax consequences.

Firstly, on changing the date of the Deed of Absolute Sale (DOAS):

Legally speaking, the date on a Deed of Sale should reflect the actual date of sale, that is, the moment when both parties agreed on the object and the price, and when the property was delivered or constructive delivery occurred. Backdating or post-dating a DOAS for convenience or tax strategy, especially when it alters the factual truth,may expose the parties to legal and tax risks, including falsification under the Revised Penal Code, or misdeclaration under the Tax Code.

That said, if the DOAS executed in 2016 reflects a completed sale, any new deed with a later date would not only be unnecessary but also potentially unlawful. What matters is whether the 2016 DOAS was a true and completed transaction. If it was, then re-executing another one now, bearing a 2025 date, may be construed as a simulated contract or an attempt to evade taxes.

Secondly, on executing an Extrajudicial Settlement (EJS) now:

You may validly execute an EJS this year involving the heirs of the deceased registered owner, assuming the estate has not yet been settled judicially. The EJS can acknowledge the 2016 DOAS as the basis of the sale, and you may attach it as an annex. This aligns with the principle that heirs inherit not just rights but obligations including obligations arising from valid contracts of the decedent.

Thirdly, on tax consequences:

You are correct that the date of the DOAS will materially affect the computation of taxes, especially:

a.) Capital Gains Tax (CGT): If the property was sold in 2016, the BIR will compute CGT based on rates and zonal values applicable that year.

b.) Estate Tax: Since the registered owner is deceased, the transfer to the buyer must go through the estate—either formally or through the EJS. Estate tax will be assessed based on the value of the property at the time of death, not the year the EJS or DOAS is executed.

Trying to use a 2025 DOAS could trigger red flags at the BIR, especially if they uncover that the transfer should have been processed years earlier. Worse, it might appear as an attempt to conceal succession or avoid estate tax.

My recommendations are:

Do not execute a new DOAS with a fabricated date. Instead, proceed with an EJS this year that acknowledges the 2016 sale. Include all heirs and treat the DOAS as valid and effective. Then settle both estate tax and CGT accordingly. Yes, the seller may incur higher estate tax, but this route is cleaner, legally defensible, and less likely to result in costly penalties or criminal exposure down the line.

You mentioned you may need legal assistance. I’d be happy to assist you further and ensure your documents are compliant and tax-optimized.

Feel free to schedule by clicking below link:

https://calendar.app.google/MuALV3nLqedy9FCx6

Warm regards,

ATTY. JOFRE B. RECOSOSA

recososalawfirm@gmail.com

Mobile: +63-917-504-6510

Can we change the date of Deed of Sale of real property?

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