Taxes to be paid when Buying Real Estate in the Philippines
The SELLER pays for the:
- Capital Gains Tax equivalent to 6% of the selling price on the Deed of Sale or the zonal value, whichever is higher. (Withholding Tax if the seller is a corporation)
- Unpaid real estate taxes due (if any).
- Agent / Broker’s commission.
The BUYER pays for the cost of Registration:
- Documentary Stamp Tax – 1.5% of the selling price or zonal value or fair market value, whichever is higher.
- Transfer Tax – 0.5% of the selling price, or zonal value or fair market value, whichever is higher.
- Registration Fee – 0.25% of the selling price, or zonal value or fair market value, whichever is higher.
- Incidental and miscellaneous expenses incurred during the registration process.
The above sharing of expenses is the standard practice in the Philippines. However, buyers and sellers can mutually agree on other terms as long as it is done during the negotiation period (before the signing of the “Deed of Sale”).
1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange
2) Photocopy of the Transfer Certificate of Title; Original Certificate of Title; or Condominium Certificate of Title
3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale
4) “Certificate of No Improvement” issued by the Assessor’s office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees
5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable
6) Duly approved Tax Debit Memo, if applicable
7) “Sworn Declaration of Interest” as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt
8) Documents supporting the exemption
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the property is located. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
For real property – 6% Capital Gains Tax.
Within 30 days after each sale, exchange, transfer or other disposition of real property.