Taxes and Fees When Buying a House in the Philippines

Who pays what, which deadlines apply and what a purchase really costs

“What else do I have to pay on top of the price?” It’s one of the first questions buyers ask us – and sellers want to know just as much. The good news: the costs are clearly defined by law. The tricky part: who pays what is partly law and partly custom, and everything is negotiable.

The short version

All rates are calculated on the highest of three values: the selling price, the BIR zonal value or the fair market value in the tax declaration. Writing a lower price in the deed doesn’t lower the taxes – and it’s illegal.

The seller’s costs

Capital Gains Tax – 6%

The biggest single item. It’s a tax on the seller’s presumed gain, so by law the seller owes it. It must be filed and paid at the BIR within 30 days after the Deed of Absolute Sale is notarised. Late payment costs a 25% surcharge plus 12% interest per year.

Buyer and seller can agree that the buyer pays it – but the BIR still holds the seller responsible. In practice, many sellers simply build the CGT into their asking price.

Broker’s commission – usually 3–5%

Paid by whoever hired the broker, normally the seller.

Real property tax arrears

Before the sale, the seller should pay all outstanding real property tax and get a tax clearance from the municipal or city treasurer. Without it, the transfer gets stuck.

The buyer’s costs

Documentary Stamp Tax – 1.5%

A tax on the Deed of Sale itself. By law either party can pay it; by custom it’s the buyer. It’s filed at the BIR together with the CGT papers.

Local transfer tax – 0.5% to 0.75%

Paid to the provincial or city treasurer. Provinces may charge up to 0.5%; cities may charge up to 50% more, so up to 0.75%. Here in Negros Oriental that means: a house in Bacong, Dauin, Valencia or Sibulan pays the provincial rate, a house in Dumaguete City pays the city rate. Ask the treasurer’s office for the current rate. It must be paid within 60 days of signing the deed.

Registration fee – roughly 0.25–0.5%

The Registry of Deeds charges a fee on a sliding scale set by the Land Registration Authority (LRA), plus small fees for entry, annotation and copies.

Notary and lawyer

The Deed of Absolute Sale must be notarised by a lawyer. Notarial fees for property sales are often quoted at around 1% of the price, but they’re negotiable – always ask for the fee in advance. If you hire your own lawyer to check the title and the documents (which we strongly recommend), that’s a separate fee.

Real property tax from now on

Once the property is yours, you pay the annual real property tax (locally called “amilyar”): about 1% of the assessed value in provinces and up to 2% in cities, plus 1% for the Special Education Fund. The assessed value is only a fraction of the market value, so the yearly amount is usually modest.

Buying from a developer

• VAT: If the seller is in the real estate business, 12% VAT can apply. Residential house-and-lot sales up to ₱3,600,000 are exempt (threshold since 2024, adjusted every three years).
• “Miscellaneous fees”: Developers usually handle the title transfer themselves and charge a lump sum for it, often several percent of the price. Ask exactly what’s included.

Paying with a bank loan

A bank loan adds its own costs: appraisal fee, mortgage registration, documentary stamp tax on the loan and insurance. Ask the bank for a full list before you sign.

Example: a ₱10,000,000 house

Assumption: the selling price is higher than the zonal value and the fair market value.

As a buyer, plan roughly 3–4% on top of the price. As a seller, plan about 9–11% of the price for tax and commission.

How the transfer works

1. Due diligence: get a certified true copy of the title from the Registry of Deeds and check the owner, liens and tax declaration. More in our guide Land Titles in the Philippines.
2. Sign and notarise the Deed of Absolute Sale.
3. BIR: file and pay CGT and DST at the Revenue District Office where the property is located. The BIR then issues the eCAR (Certificate Authorizing Registration).
4. Treasurer: pay the transfer tax and get the tax clearance.
5. Registry of Deeds: submit everything. The old title is cancelled and a new one is issued in the buyer’s name – usually within a few weeks.
6. Assessor’s office: transfer the tax declaration to the new owner.

Common pitfalls

• Title still in a deceased parent’s name: the estate has to be settled first, including estate tax. That can take months.
• Lower price in the deed: some sellers suggest a “lower declared price” to save tax. It doesn’t work – the BIR uses the zonal value anyway – and it’s tax fraud.
• Missed deadlines: penalties start right after the 30 or 60 days.
• Unclear agreements: write into the contract who pays which tax and fee. That avoids arguments at the end.

For foreign buyers

Foreigners can’t own land in the Philippines, but they can own a condo unit or a house on leased land. The taxes above apply to condo purchases in the same way; for a lease, different rules apply. Our guide Buying a House in the Philippines explains all the options, from leasing the land to buying through a Filipino spouse.

Matching listings

Current houses can be found under House & Lot, lots by the sea under Beach Lots and condominium units under Condo.

Sources

• National Internal Revenue Code (RA 8424), Sec. 24(D) Capital Gains Tax, Sec. 196 Documentary Stamp Tax, as amended
• Local Government Code (RA 7160), Sec. 135 transfer tax, Sec. 151 city rates
• Revenue Regulations No. 1-2024: VAT exemption threshold ₱3,600,000 (summary by Grant Thornton)
• Bureau of Internal Revenue: Capital Gains Tax, Documentary Stamp Tax, eCAR
• Land Registration Authority: registration fees, Registry of Deeds

As of October 2026. This guide is not legal or tax advice. Rates and procedures can change – confirm current figures with the BIR, the treasurer’s office and your lawyer.

❓ Common Questions