The Costs of Buying & Selling Property in the Philippines

The price on the listing is never the real price. Whether you are buying or selling property in the Philippines, a layer of taxes and fees sits on top of the sale figure, and together they can add anywhere from a few percent to well over ten percent of the property’s value to the cost of the deal. The trouble is that these costs are scattered across different government agencies, called by unfamiliar names, and split between buyer and seller in a way that is partly fixed by law and partly up for negotiation. This guide untangles all of it, organised the way it actually matters: by who pays what.

Before the breakdown, one rule that governs almost every figure below. The Bureau of Internal Revenue does not necessarily tax your agreed selling price. It taxes the highest of three numbers: your selling price, the BIR zonal value for the area, or the assessor’s fair market value. If the zonal value is higher than what you actually sold for, your taxes are computed on the zonal value. Always check the zonal value before you estimate any cost.

What the Seller Pays

By custom and by law, the seller carries the largest single cost in a Philippine property sale. Here is the seller’s side of the ledger.

The Capital Gains Tax is the headline number. At a flat 6% of the gross selling price or fair market value, whichever is higher, it is the biggest line item in most sales, and broker commissions and selling expenses cannot be deducted from the base before it is calculated. It is technically a final tax, settled with BIR Form 1706 within 30 days of the deed of sale being notarised, after which the gain need not be reported again on your income tax return.

One important nuance on CGT: the 6% rate applies when the property is a capital asset, broadly, a home or land held by an individual not in the real estate business. If the seller is a developer or dealer holding the property as an ordinary asset, the transaction is taxed differently, through creditable withholding tax and potentially 12% VAT, rather than the flat 6% CGT. There is also a narrow principal-residence exemption: sell your main home and fully reinvest the proceeds in a new principal residence within 18 months, and the CGT can be exempted, subject to strict conditions and a once-in-a-lifetime-style limit.

What the Buyer Pays

The buyer’s costs are smaller individually but add up, and they are mostly the charges tied to transferring and registering the title. Here is the buyer’s side.

The Documentary Stamp Tax is the buyer’s largest cost at 1.5% of the taxable base, and like CGT it falls due quickly after the sale is notarised. The local transfer tax goes to the city or provincial government and varies by location within that 0.5% to 0.75% band. The registration fee, paid to the Registry of Deeds to record the new title, follows a sliding schedule set by the Land Registration Authority. None of these rates can be negotiated, they are fixed by government, but as you will see, who actually shoulders them can be.

The Costs That Are Actually Negotiable

Here is where local custom diverges from the letter of the law, and where money is won or lost. Philippine law makes both parties technically liable for some of these taxes, but custom assigns them as above. What custom assigns, negotiation can reassign. The rates themselves are fixed; who pays them is not.

In practice, that means a few things are on the table in most deals: which party absorbs the DST and the local transfer tax, how the broker’s commission is split, and the scope and rate of legal and notarial fees. A buyer in a soft market can push the seller to cover DST and transfer tax, shaving roughly two percent off their own costs. A seller can sometimes negotiate the buyer into sharing fees that custom would otherwise place on the seller. The single most important protective step is to spell out exactly who pays what in the Deed of Absolute Sale, because anything left vague tends to land on whoever is more eager to close.

A Worked Example: A ₱5 Million Sale

Numbers make the split concrete. Take a straightforward resale of a ₱5,000,000 condo by an individual owner, assuming the selling price is at or above the zonal value, and a standard cost allocation.

On this deal the seller parts with roughly ₱500,000 in CGT and commission, around 10% of the sale, while the buyer adds about ₱112,500 in transfer-related costs, a little over 2% on top of the purchase price. That is the typical shape: the seller’s burden is dominated by the 6% CGT and the broker, while the buyer’s sits in the 2% to 7% range depending on location and what the seller agrees to absorb. Roughly three-quarters of the buyer’s add-on is government-imposed tax rather than professional fees.

The Two Deadlines That Cost You If You Miss Them

Two clocks start the moment the Deed of Absolute Sale is notarised, and both carry penalties for lateness. Capital Gains Tax must be filed and paid to the BIR within 30 days. Documentary Stamp Tax is due on a similar short timeline, generally within the same window. Miss them and you face surcharges and interest on top of the original amount, which can turn an orderly transaction into an expensive scramble. The practical discipline is to have the funds for these taxes ready before you notarise, not after, because the notarisation date, not the date you get around to it, is what starts the count.

A Note on Holding Costs

One cost sits outside the transaction itself but is worth flagging because it can surface at sale. Real Property Tax, known locally as amilyar, is the annual tax every property owner pays to the local government for as long as they hold the property. It is not a buying or selling cost as such, but unpaid amilyar must be settled before a clean title transfer can proceed, so it often resurfaces at the point of sale as something the seller has to clear. If you are buying, confirm the amilyar is fully paid up before you take ownership; if you are selling, settle it before you reach the closing table.