Complete Guide to Property Transfer Taxes and Legal Fees in the Philippines

Photo: Tara Winstead, Pexels

This guide is general information, not legal, tax or financial advice. Rules, rates and fees change, so confirm the details with the relevant agency, your lender or a licensed professional before you decide.

The price on a listing is never the full cost of buying property in the Philippines. Between the BIR, the local government, the Registry of Deeds and the notary public, transferring a title usually adds several percent on top of the selling price, and the bill is split between buyer and seller. Knowing who pays what, and when, avoids the most common argument at closing.

This guide covers every tax and fee in a typical resale of titled property, who customarily pays it, the deadlines, and a worked example on a ₱3 million lot.

First: what the taxes are based on

Most transfer taxes aren’t computed on the price alone. The BIR uses the highest of:

• the selling price in the Deed of Absolute Sale;
• the zonal value set by the BIR for that street or area; and
• the fair market value in the property’s tax declaration, set by the local Assessor.

So writing a lower price in the deed doesn’t lower the tax if the zonal value is higher. It only creates a false document. The Real Property Valuation and Assessment Reform Act (RA 12001) is gradually replacing these separate values with a single schedule of market values per locality. Ask the Revenue District Office (RDO) which values apply to your property.

The taxes and fees, one by one

1. Capital Gains Tax (CGT): 6%

Rate: 6% of the highest of the selling price, zonal value or fair market value.
Applies to: the sale of real property held as a capital asset, meaning property not used in a business, such as a family home or a lot bought as an investment by an individual.
Deadline: within 30 days of the deed being notarized.
Customarily paid by: the seller.

When the seller is a developer or someone in the business of selling real estate, the property is an ordinary asset instead. CGT doesn’t apply; the sale is covered by income tax, creditable withholding tax and, above certain thresholds, 12% VAT. For new homes, ask the developer whether VAT is already included in the price quoted to you.

2. Documentary Stamp Tax (DST): 1.5%

Rate: ₱15 for every ₱1,000 (1.5%) of the highest of the selling price, zonal value or fair market value.
Deadline: within 5 days after the end of the month the deed was notarized.
Customarily paid by: the buyer, though this is often negotiated.

3. Local Transfer Tax: up to 0.5% (up to 0.75% in Metro Manila)

Rate: set by each province or city, up to 0.5% of the selling price or fair market value, whichever is higher. In Metro Manila cities and municipalities the cap is 0.75%.
Paid at: the Provincial or City Treasurer’s Office where the property is located.
Deadline: within 60 days of the deed being signed.
Customarily paid by: the buyer.

4. Registration fees: roughly 0.25%

The Registry of Deeds charges fees to cancel the seller’s title and issue a new one in your name, based on a graduated schedule set by the Land Registration Authority, plus small entry and IT fees. For most residential sales it works out to roughly 0.25% of the property value.
Customarily paid by: the buyer.

5. Notarial fees: commonly around 1%

The Deed of Absolute Sale must be notarized to be registered. Notaries often quote around 1% of the selling price, but fees vary widely and are negotiable, especially for higher-value properties.
Customarily paid by: the buyer, or split.

6. Other costs to plan for

• Broker’s commission: commonly 3% to 5% of the price, customarily paid by the seller.
• Unpaid real property tax: any arrears must be cleared before transfer. Customarily the seller’s responsibility up to the date of sale.
• Certified true copies, certifications and tax clearances: small fees each, but they add up.
• Estate tax: if the registered owner has died, the heirs must settle the estate and pay estate tax before the property can be sold and transferred.
• Loan-related fees if you’re borrowing: appraisal, processing, mortgage registration and insurance. See our Pag-IBIG housing loan guide.

Who pays what: the usual split

Under the Civil Code, the seller bears the costs of executing and registering the sale unless the parties agree otherwise, and in practice they almost always agree otherwise. The customary split is:

None of this is fixed by law, so write the agreed split into the Contract to Sell or the Deed of Sale. With developers, most of the buyer-side costs are bundled into “miscellaneous” or “transfer” fees, often quoted as 5% to 8% of the price. Ask for the breakdown.

Worked example: a ₱3,000,000 lot

A titled residential lot in a province sells for ₱3,000,000. The BIR zonal value works out to ₱2,500,000 and the Assessor’s fair market value to ₱1,800,000. The selling price is the highest, so it’s the tax base.

In this example the buyer should budget about ₱97,500, or roughly 3.3% on top of the price, plus certifications and any loan fees. The seller pays ₱180,000 in CGT, plus a broker’s commission if there is one.

The transfer process, in order

1. Sign and notarize the Deed of Absolute Sale.
2. File and pay CGT and DST at the BIR’s Revenue District Office where the property is located, with the deed, title, tax declaration, IDs and other required documents.
3. Receive the eCAR (electronic Certificate Authorizing Registration) from the BIR. The Registry of Deeds won’t transfer the title without it.
4. Pay the local transfer tax at the Treasurer’s Office and get the tax clearance.
5. Submit everything to the Registry of Deeds, pay the registration fees and receive the new title in your name.
6. Bring the new title to the Assessor’s Office to transfer the tax declaration to your name, so future real property tax bills come to you.

Missing a deadline adds surcharges, interest and penalties, which can quickly exceed the original tax. If a seller wants to “hold” a notarized deed and file later, be wary. The deadlines run from notarization, not from filing.

Before you sign

Budget for transfer costs from the start, alongside your downpayment. Verify the title before any money changes hands (our title verification checklist shows how), and agree the cost split in writing. When you’re ready, browse properties for sale or lots for sale and ask sellers up front how they handle transfer taxes.