The first step to consider when investing in real estate is to know the taxes to pay when buying a property in the Philippines. Since 2021, foreigners have been increasing interest in properties for sale in the Philippines, and more have been asking if foreigners pay taxes in the Philippines on the purchase of property. Understanding the taxes to pay when buying a lot in the Philippines and the property price is essential in ensuring compliance and getting your money’s worth. This article aims to assist you in navigating the property purchase tax in the Philippines.
What taxes to pay when buying a property in the Philippines?
The Philippines has one fee and three taxes on the purchase of property. These are the fees and three taxes to pay when buying a property in the Philippines:
- Transfer Tax
- Documentary Stamp Tax (DST)
- Registration Fee
- Real Property Tax (RPT)
1. Transfer Tax
The Treasurer’s Office collects a Transfer Tax. The kinds of Transfer Tax in the Philippines depend on the ownership mode, whether through sale, donation, or inheritance. Generally, the term ‘Transfer Tax’ refers to a sale of property. On the other hand, donating is known as a donor’s tax; if through inheritance, it is an estate tax.
When a property title, such as a building or land, is transferred to another, one must pay a Transfer Tax before effecting the change in ownership. For this article, what is involved in the purchase of a property, so we will be using the term ‘Transfer Tax’ in its general meaning.
Rates vary depending on the location since the computation is 0.5% of the selling price, zonal value, or Fair Market Value, whichever is higher. Zonal value is the price of the land per square meter that the Bureau of Internal Revenue declares. Fair Market Value is the price of the land as indicated in previous tax declarations.
2. Documentary Stamp Tax (DST)
When you buy real property in the Philippines, you need to execute a Deed of Sale, and this is where the Documentary Stamp Tax is necessary. The DST on the Deed of Sale is typically imposed at a rate of 1.5% of the property’s selling price or fair market value, whichever is higher. It is the buyer who is usually responsible for paying this tax.
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3. Registration Fee
The Registration Fee is paid when you transfer a land title at the purchase of a property. This fee is paid to the Register of Deeds or Land Registration Authority (LRA) in the city or area where the property is located. The table below shows an overview of the Registration Fee buyers must pay based on the property’s value or selling price, whichever is higher.
Registration Fee in the Philippines table
| More than (in PHP) | Not exceeding (in PHP) | Registration Fee (in PHP) |
|---|---|---|
| 0 | 500 | 21 |
| 500 | 1,000 | 30 |
| 1,000.00 | 1,500.00 | 39 |
| 1,500.00 | 2,000.00 | 48 |
| 2,000.00 | 2,500.00 | 57 |
| 2,500.00 | 3,000.00 | 66 |
| 3,000.00 | 3,500.00 | 75 |
| 3,500.00 | 4,000.00 | 84 |
| 4,000.00 | 4,500.00 | 93 |
| 4,500.00 | 5,000.00 | 102 |
| 5,000.00 | 5,500.00 | 111 |
| 5,500.00 | 6,000.00 | 120 |
| 6,000.00 | 8,000.00 | 144 |
| 8,000.00 | 10,000.00 | 168 |
| 10,000.00 | 12,000.00 | 192 |
| 12,000.00 | 14,000.00 | 216 |
| 14,000.00 | 16,000.00 | 240 |
| 16,000.00 | 18,000.00 | 264 |
| 18,000.00 | 20,000.00 | 288 |
| 20,000.00 | 22,000.00 | 312 |
| 22,000.00 | 24,000.00 | 336 |
| 24,000.00 | 26,000.00 | 360 |
| 26,000.00 | 28,000.00 | 384 |
| 28,000.00 | 30,000.00 | 408 |
| 30,000.00 | 35,000.00 | 450 |
| 35,000.00 | 40,000.00 | 492 |
| 40,000.00 | 45,000.00 | 534 |
| 45,000.00 | 50,000.00 | 576 |
| 50,000.00 | 55,000.00 | 618 |
| 55,000.00 | 60,000.00 | 660 |
| 60,000.00 | 65,000.00 | 702 |
| 65,000.00 | 70,000.00 | 744 |
| 70,000.00 | 75,000.00 | 786 |
| 75,000.00 | 80,000.00 | 828 |
| 80,000.00 | 85,000.00 | 870 |
| 85,000.00 | 90,000.00 | 912 |
| 90,000.00 | 95,000.00 | 954 |
| 95,000.00 | 100,000.00 | 996 |
| 100,000.00 | 110,000.00 | 1,056.00 |
| 110,000.00 | 120,000.00 | 1,116.00 |
| 120,000.00 | 130,000.00 | 1,176.00 |
| 130,000.00 | 140,000.00 | 1,236.00 |
| 140,000.00 | 150,000.00 | 1,296.00 |
| 150,000.00 | 160,000.00 | 1,356.00 |
| 160,000.00 | 170,000.00 | 1,416.00 |
| 170,000.00 | 180,000.00 | 1,476.00 |
| 180,000.00 | 190,000.00 | 1,536.00 |
| 190,000.00 | 200,000.00 | 1,596.00 |
| 200,000.00 | 210,000.00 | 1,656.00 |
| 210,000.00 | 220,000.00 | 1,716.00 |
| 220,000.00 | 230,000.00 | 1,776.00 |
| 230,000.00 | 240,000.00 | 1,836.00 |
| 240,000.00 | 250,000.00 | 1,896.00 |
| 250,000.00 | 260,000.00 | 1,956.00 |
| 260,000.00 | 270,000.00 | 2,016.00 |
| 270,000.00 | 280,000.00 | 2,076.00 |
| 280,000.00 | 290,000.00 | 2,136.00 |
| 290,000.00 | 300,000.00 | 2,196.00 |
| 300,000.00 | 310,000.00 | 2,256.00 |
| 310,000.00 | 320,000.00 | 2,316.00 |
| 320,000.00 | 330,000.00 | 2,376.00 |
| 330,000.00 | 340,000.00 | 2,436.00 |
| 340,000.00 | 350,000.00 | 2,496.00 |
| 350,000.00 | 360,000.00 | 2,556.00 |
| 360,000.00 | 370,000.00 | 2,616.00 |
| 370,000.00 | 380,000.00 | 2,676.00 |
| 380,000.00 | 390,000.00 | 2,736.00 |
| 390,000.00 | 400,000.00 | 2,796.00 |
| 400,000.00 | 410,000.00 | 2,856.00 |
| 410,000.00 | 420,000.00 | 2,916.00 |
| 420,000.00 | 430,000.00 | 2,976.00 |
| 430,000.00 | 440,000.00 | 3,036.00 |
| 440,000.00 | 450,000.00 | 3,096.00 |
| 450,000.00 | 460,000.00 | 3,156.00 |
| 460,000.00 | 470,000.00 | 3,216.00 |
| 470,000.00 | 480,000.00 | 3,276.00 |
| 480,000.00 | 490,000.00 | 3,336.00 |
| 490,000.00 | 500,000.00 | 3,396.00 |
| 500,000.00 | 520,000.00 | 3,486.00 |
| 520,000.00 | 540,000.00 | 3,576.00 |
| 540,000.00 | 560,000.00 | 3,666.00 |
| 560,000.00 | 580,000.00 | 3,756.00 |
| 580,000.00 | 600,000.00 | 3,846.00 |
| 600,000.00 | 620,000.00 | 3,936.00 |
| 620,000.00 | 640,000.00 | 4,026.00 |
| 640,000.00 | 660,000.00 | 4,116.00 |
| 660,000.00 | 680,000.00 | 4,206.00 |
| 680,000.00 | 700,000.00 | 4,296.00 |
| 700,000.00 | 720,000.00 | 4,386.00 |
| 720,000.00 | 740,000.00 | 4,476.00 |
| 740,000.00 | 760,000.00 | 4,566.00 |
| 760,000.00 | 780,000.00 | 4,656.00 |
| 780,000.00 | 800,000.00 | 4,746.00 |
| 800,000.00 | 820,000.00 | 4,836.00 |
| 820,000.00 | 840,000.00 | 4,826.00 |
| 840,000.00 | 860,000.00 | 5,016.00 |
| 860,000.00 | 880,000.00 | 5,016.00 |
| 880,000.00 | 900,000.00 | 5,196.00 |
| 900,000.00 | 920,000.00 | 5,286.00 |
| 920,000.00 | 940,000.00 | 5,376.00 |
| 940,000.00 | 960,000.00 | 5,466.00 |
| 960,000.00 | 980,000.00 | 5,556.00 |
| 980,000.00 | 1,000,000.00 | 5,546.00 |
| 1,000,000.00 | 1,020,000.00 | 5,736.00 |
| 1,020,000.00 | 1,040,000.00 | 5,826.00 |
| 1,040,000.00 | 1,060,000.00 | 5,916.00 |
| 1,060,000.00 | 1,080,000.00 | 6,006.00 |
| 1,080,000.00 | 1,100,000.00 | 6,096.00 |
| 1,100,000.00 | 1,120,000.00 | 6,186.00 |
| 1,120,000.00 | 1,140,000.00 | 6,276.00 |
| 1,140,000.00 | 1,160,000.00 | 6,366.00 |
| 1,160,000.00 | 1,180,000.00 | 6,456.00 |
| 1,180,000.00 | 1,200,000.00 | 6,546.00 |
| 1,200,000.00 | 1,220,000.00 | 6,636.00 |
| 1,220,000.00 | 1,240,000.00 | 6,726.00 |
| 1,240,000.00 | 1,260,000.00 | 6,816.00 |
| 1,260,000.00 | 1,280,000.00 | 6,906.00 |
| 1,280,000.00 | 1,300,000.00 | 6,996.00 |
| 1,300,000.00 | 1,320,000.00 | 7,086.00 |
| 1,320,000.00 | 1,340,000.00 | 7,176.00 |
| 1,340,000.00 | 1,360,000.00 | 7,266.00 |
| 1,360,000.00 | 1,380,000.00 | 7,356.00 |
| 1,380,000.00 | 1,400,000.00 | 7,446.00 |
| 1,400,000.00 | 1,420,000.00 | 7,536.00 |
| 1,420,000.00 | 1,440,000.00 | 7,626.00 |
| 1,440,000.00 | 1,460,000.00 | 7,716.00 |
| 1,460,000.00 | 1,480,000.00 | 7,806.00 |
| 1,480,000.00 | 1,500,000.00 | 7,896.00 |
| 1,500,000.00 | 1,520,000.00 | 7,986.00 |
| 1,520,000.00 | 1,540,000.00 | 8,076.00 |
| 1,540,000.00 | 1,560,000.00 | 8,166.00 |
| 1,560,000.00 | 1,580,000.00 | 8,256.00 |
| 1,580,000.00 | 1,600,000.00 | 8,346.00 |
| 1,600,000.00 | 1,620,000.00 | 8,436.00 |
| 1,620,000.00 | 1,640,000.00 | 8,526.00 |
| 1,640,000.00 | 1,660,000.00 | 8,616.00 |
| 1,660,000.00 | 1,680,000.00 | 8,706.00 |
| 1,680,000.00 | 1,700,000.00 | 8,796.00 |
Does the selling price exceed 1,700,000.00 PHP? In that case, for every 20,000.00 PHP, an extra fee of 90.00 PHP is added to the 8,796.00 PHP.
4. Real Property Tax (RPT)
Once you own real properties such as buildings and lands, you must pay an annual tax called a Real Property Tax (RPT) in the Philippines. It’s one of the most important taxes to pay when buying property in the Philippines, even when you don’t own the land.
The amount of Real Property Tax is based on the property’s assessed value. According to the Local Government Code of 1991, the RPT is 1% of the estimated value for properties in the provinces and 2% for cities and municipalities within Metro Manila.
Property owners must pay this tax annually, and non-payment or delinquency may result in penalties and surcharges. You can pay in full in January or four quarterly installments: March 31, June 30, September 30, and December 31.
How to pay tax on purchase of property in the Philippines?
How to pay the tax on purchase of property in the Philippines depends on the type of tax.
- The Documentary Stamp Tax is paid at the Bureau of Internal Revenue (BIR) Revenue District Office (RDO), where the property is located or where the deed of sale was executed. You have to fill out and submit this form. This has to be done within five days after the end of the month when the deed of sale was executed.
- The Transfer Tax is paid at the local treasurer’s office of the municipality or city where the property is located by filling out and submitting this form. This tax must be paid after paying the DST and before registering the sale at the Registry of Deeds.
- The Registration Fee is paid at the Registry of Deeds where the property is located. This tax must be paid after paying both the DST and Transfer Tax before the title is transferred to the buyer’s name.
- The Real Property Tax is paid at the city treasurer’s office or through the online portal. This must be done manually before January 31 of each year. It’s possible to pay quarterly, with the first installment due on or before March 31.
Need help with your property purchase tax in the Philippines?
When purchasing real estate or land in the Philippines as a foreigner, it’s recommended to engage the services of a tax expert or attorney to help you with taxes to pay when buying a house in the Philippines, such as Own Property Abroad. We can provide essential guidance throughout the transaction, ensuring complete legal and tax responsibilities adherence.
With our expert team, you won’t have to navigate the complexities alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected].
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Conclusion
Staying updated with the latest land taxes in the Philippines is crucial as tax legislation evolves. Awareness of the taxes to pay when buying a property in the Philippines will enable you to organize your property investments there strategically. As such, it’s advisable to have a tax specialist, legal counsel, or real estate professional readily available to assist you in managing the taxes to pay when buying land in the Philippines. You can make confident investments in the Philippine real estate market by seeking expert advice.
Frequently Asked Questions (FAQs)
What are the taxes on real estate in the Philippines?
The taxes to pay when buying a lot in the Philippines include the Transfer Tax, Documentary Stamp Tax, and Real Property Tax. The Transfer Tax is a one-time tax on the transfer of property ownership, while the Real Property Tax is an annual tax paid on owning a property. Besides these taxes, a Registration Fee is paid to transfer the land and property title.
What are the taxes to pay when buying a condo in the Philippines?
When purchasing a condo in the Philippines, you should be aware that you must pay the following taxes: Transfer Tax, DST, and association dues. Consulting with real estate professionals and legal experts is recommended to ensure tax compliance when buying a condo in the Philippines.
Do foreigners pay taxes in the Philippines?
Yes, foreigners are subject to various taxes, including income and Real Property Tax. The specific tax obligations may vary based on factors such as residency status and the type of income or transactions involved.
3 Responses
Can I buy a piece of land by paying the delinquent taxes!
Good day Ma’am, i have a DENR (GPPC) Geographic position and plane coordinates of Lots Las Pinas Cadastre. Need to verify the Lot Owner and Location, Thanks.
Hello Bienvenido, to verify the lot owner and location, you can request a Certified True Copy of the title from the Registry of Deeds based on the geographic coordinates you have. This will confirm the current registered owner and the exact location of the property.