Property Taxes

Information on who pays what taxes and why in the event of a property being bought in the Philippines.

Property taxes are administered at two levels: at a national level and a local level.

National Property Taxes

Capital Gains Tax (CGT)

  • Tax rate of 6% based on the gross selling price of a property or current fair market value, whichever is higher
  • Exemption of gains from sale of principal residence under certain conditions

Value-Added Tax (VAT)

  • Tax equivalent to 12% of gross selling price or gross value of money derived from the sale or lease of property in the ordinary course of trade or business
  • VAT Exemption – Residential lot valued at PHP 1,919,500 and below (US$47,000)
  • House and lot and other residential dwellings valued at PHP 3,199,200 and below (US$78,000)

Estate Tax

  • First PHP 200,000 of net estate is exempt, and those exceeding it are subject to tax rates ranging from 5% to 20%

Gift Tax

  • The first PHP 100,000 is exempt; anything exceeding this amount is subject to tax rates ranging from 2% to 15%

Documentary Stamp Tax (DST)

  • The rate of DST is PHP15 per Php1,000, based on the value of the property

Local Property Taxes

Basic Real Property Tax (RPT)

  • Annual tax imposed by cities (or municipalities in Metro Manila), at a maximum rate of 2%, and provinces, at a maximum rate of 1%, based on the assessed value of the property
  • Assessed Value – derived upon the application of the assessment levels (in percentage) based on actual use to the fair market value of the property

Special Education Fund (SEF)

  • An annual tax imposed by the province or city, or a municipality within Metro Manila, at a fixed rate of 1% on the assessed value of the real property
  • This is in addition to real property tax

Transfer Tax

  • Maximum rate of ½ of 1% based on the total consideration involved in the acquisition of the property or its fair market value, whichever is higher
  • The tax is imposed upon the seller, donor, transferor, executor, or administrator and is similar to the transfer taxes (for example CGT and DST imposed the national government)