Taxes and Fees when Buying Property in the Philippines


When buying and selling real estate properties in the Philippines, the final purchase price is not and should not only be the relevant amount.

Other taxes and fees charged on the transaction must be considered by both the buyer and seller because these costs affect the total transaction price.

Although the costs are usually associated with the buyer or seller, some of these can actually be passed on to the other party subject to mutual agreement. The Sales Contract or the Deed of Sale, however, must explicitly mention the parties in charge of shouldering the costs in order to avoid problems in the future.

In the Philippines, the following fees and taxes are charged on real estate transactions.

Real Estate Taxes and Fees in the Philippines

For the account of the Seller (to be paid by the Seller):

  • 1. Capital Gains Tax

6% of the Selling Price or Zonal Value or Fair Market Value, whichever is higher

  • 2. Business Tax

Paid only if applicable; rate depends on local government unit where property is located

For the account of the Buyer (to be paid by the Buyer):

  • 1. Documentary Stamps Tax

1.5% of Selling Price or Zonal Value, whichever is higher

  • 2. Transfer Tax

Rate depends on location of property (ranging from 0.25% to 0.75% of Selling Price or Zonal Value, whichever is higher)

  • 3. Registration Fee

Graduated rate based on Selling Price

  • 4. Real Estate Taxes (Amilyar)

For the remaining months of the year based on the date of full payment

In the case of Manny Pacquiao’s Forbes Park house that he bought supposedly for P388 million ($9 million), the relevant taxes and fees paid are shown in the table below.

The computation assumes that the purchase price was P388 million and this Selling Price (SP) was the highest value compared to the Zonal Value or Fair Market Value of the property.

It also assumes that there were no business taxes or realty taxes paid, that the registration fee was negligible, and that the transfer tax rate was 0.75%.

Sample Computation: Real estate fees paid by Manny Pacquiao 

[TABLE=86]

Assuming the above assumptions are correct, the purchase of the Forbes Park property resulted in the following payment of taxes and fees:

  • The seller (rumored to be Roque Tordesillas of Marsh Philippines) paid total Capital Gains Tax of P23.28 million
  • Manny Pacquiao, as buyer, paid a total of P8.73 million for documentary stamps tax and transfer tax

That’s a lot of taxes in one single real estate transaction!


29 thoughts on “Taxes and Fees when Buying Property in the Philippines”

  1. Hi, I recently bought house and lot from a developer in Baguio City. As per the signed “Lot Purchase and House Construction Agreement”, it was indicated that

    “All taxes pertaining to the transfer of title under the name of the Second Party (Buyer) specifically but not limited to Capital Gains Tax, Documentary Stamps, and other fees imposed by the BIR; … shall be shouldered by the Second Party (Buyer).”

    Question is, since capital gains tax must be borne by the seller, should I really pay the capital gains tax as a buyer since it is indicated in the signed agreement?
    Also, how is a capital gains tax actually computed?
    Thank you!

  2. My wife wishes to sell our house in Timog Park, Angeles City. We paid P2,800,000 and we are offering it at the same price.
    In the UK [where I am from] that would mean that there was no capital gain, so no CGT would be due.
    Is it different here in the Philippines?

    The house is in my wife’s name of course, as I am a foreigner (though a resident on a 13A [probationary] visa.)

    My wife has no income as she is not employed.

    Would we have to pay CGT on the sale?

  3. I think your explanation on capital gains tax is a bit off. Capital gains tax is not computed against the entire selling price but only against the gain by the seller in selling the real property. So in the case mentioned above, to compute the capital gains tax, the acquisition amount by the seller must be considered and then less from his selling price. Assuming that he acquired the property for $15M and he sells to Manny for $19M, the difference of $4M is the gain subject to capital gains tax. 6% of $4M is $240k – enough to last me a lifetime, lol.

  4. Johngie Manuel

    Hi! There .just want to inquire .i bought a condo unit in Santa Ana Manila .do I need to pay the property tax and other charges although I don’t have the key yet for the condo? I will really appreciate your reply.thank you!
    REPLY

  5. Johngie Manuel

    Hi! There .just want to inquire .i brought a condo unit in Santa Ana.do I need to pay the property tax and other charges although I don’t have the key yet for the condo? I will really appreciate your reply.thank you!

  6. Hi we just bought a 3 BR condo unit in BGC. The seller added to the SP as amount to be paid by us of almost 1M representing Documentary Stamp tax, Transfer tax and registration fees.
    Question…these taxes and fees are based on Selling Price or Zonal value whichever is higher. The selling price which is the basis, is it price plus VAT or just the price not including VAT?
    Also is the seller bound to provide the buyer the amount of these individual taxes and fees separately and also can the buyer request for government receipts for these payments from the seller?
    Appreciate your response.

  7. If i am a foreigner who owns a condo in the Philippines and paying my taxes in the country where I currently reside. Will I still be expected to pay capital gains tax in the Philippines if I evently sold my unit?

  8. Hi, Since your property is conjugal, when your husband passed away, the portion he owned (50%) will be subjected to Estate tax. But taking into account the TRAIN law, there is an automatic deduction of Php 5M from the Estate and the rate is no longer progressive as before. Net estate will only be taxed at 6%. Hope this helps.

    1. Hello! I’m a Property Specialist. So if you’re looking for condo investment in the Philippines, you may refer to me. We have a project yet to be launched with more than 200 units sold, located at Fort Bonifacio. With this best investment choice, I can offer you the best deal! Please message me on fb, or you can call me at 0906 370 7486 or send me an email at darylljpua@gmail.com

  9. We bought a condo in Taguig City, Philippines , both named to me & my husband. We live in Florida USA, my husband passed away April 2013, I am told I have to pay inheritance tax ?
    Why do I need to pay when Im a co owner of the property? What are the laws in this. Thank you.

    1. You need to pay inheritance tax because you will inherit your husbands property. All property purchased while being married is conjugal. Even if only one’s name is declared by law it is conjugal so 50/50 ownership. Now that he passed away you are the legitimate heirs of his 50% so you have to pay inheritance tax for the 50% inherited from hubby. Hope this answers your question.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top