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Philippines Real Estate Sale Tax Calculator

Calculates Capital Gains Tax, Documentary Stamp Tax, and Local Transfer Tax for the sale of real property in the Philippines based on sale price, BIR zonal value, and location.

Your details

The actual selling price agreed upon between buyer and seller.

The Bureau of Internal Revenue's official zonal value for the property location. You can check this with the BIR Revenue District Office (RDO).

The fair market value of the property as determined by the local City/Municipal Assessor's Office. This is one of the bases for comparison for tax purposes.

Select the type of local government unit where the property is located. This determines the maximum local transfer tax rate. The actual rate may be slightly lower depending on the specific city or municipal ordinance.

If you know the exact transfer tax rate for your specific city or municipality, enter it here (as a percentage, e.g., 0.5 for 0.5%). Otherwise, leave blank to use the standard maximum rate for the location type selected above.

Select the party responsible for paying the taxes. This affects the total cost for that party. Payment responsibility is negotiable.

Result

Total Taxes Payable ₱412,500.00

Sum of all three taxes. Check who is responsible for paying each tax based on your agreement.

How it is calculated

Taxable Base (Highest Value) For CGT and DST, the tax base is the highest among the Sale Price, BIR Zonal Value, or Assessor's Fair Market Value.
₱5,000,000.00
Capital Gains Tax (CGT) 6% of the Taxable Base. Generally paid by the seller.
₱300,000.00
Documentary Stamp Tax (DST) 1.5% of the Taxable Base. Paid on the deed of sale.
₱75,000.00
Applicable Local Transfer Tax Rate The rate used for calculation. If a custom rate is provided, it is used. Otherwise, the standard maximum rate for the selected location type is applied.
0.75 %
Local Transfer Tax Local tax on the transfer of ownership, based on the Taxable Base.
₱37,500.00
Total Cost for Seller Estimated tax amount the seller needs to pay based on the selected payment responsibility.
₱412,500.00
Total Cost for Buyer Estimated tax amount the buyer needs to pay based on the selected payment responsibility.
₱0.00
Keep in mind
  • This calculator provides an estimate based on standard national tax rates and the maximum local transfer tax rates allowed by law. The actual local transfer tax rate may be lower than the maximum, depending on the specific city or municipal ordinance. Always verify the exact rate with the local Treasurer's Office.
  • Tax payment responsibility (seller, buyer, or split) is subject to negotiation between the parties and should be clearly stated in the Deed of Sale. The options provided reflect common practices but other arrangements are possible.
  • Other fees (e.g., registration fees with the Registry of Deeds, notarial fees, tax clearance fees) are not included in this calculation.

Indicative result, calculated from the details and the rules listed below. It does not replace an official calculation or advice from a professional.

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Deed of Sale of Real Property
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Philippines Real Estate Sale Taxes: A Guide

Selling or buying real property in the Philippines involves several government taxes that significantly impact the total transaction cost. The three primary taxes are the Capital Gains Tax (CGT), the Documentary Stamp Tax (DST), and the Local Transfer Tax. Understanding how these are calculated is crucial for budgeting and negotiation.

How the Taxes are Calculated

The core principle for CGT and DST is that they are levied on the highest value among three figures: the actual Sale Price, the BIR Zonal Value, and the Assessor's Fair Market Value. The government uses this rule to prevent under-declaration of sale prices.

  • Capital Gains Tax (CGT): A national tax imposed on the presumed gain from the sale of a capital asset. The rate is 6% of the taxable base. By tradition and common practice, this tax is borne by the seller.
  • Documentary Stamp Tax (DST): A national tax on documents, instruments, and agreements. For a Deed of Sale, the rate is 1.5% of the taxable base. This is typically paid by the buyer.
  • Local Transfer Tax: A tax imposed by the city or municipality where the property is located. The Local Government Code sets maximum rates:
    • Metro Manila: Up to 0.75% of the taxable base.
    • Cities within a Province and Municipalities: Up to 0.5% of the taxable base.
    Each Local Government Unit (LGU) can set its own rate via ordinance, up to these maximums. Payment responsibility is often negotiated, but it is frequently shouldered by the buyer.

Step-by-Step Example

Let's assume a property in Quezon City, Metro Manila, is sold for PHP 5,000,000. The BIR Zonal Value is PHP 4,800,000, and the Assessor's Fair Market Value is PHP 4,500,000. The seller agrees to pay all taxes, and we use the maximum Metro Manila rate of 0.75%.

  1. Determine Taxable Base: The highest value is the Sale Price of PHP 5,000,000.
  2. Calculate CGT: 6% of PHP 5,000,000 = PHP 300,000.
  3. Calculate DST: 1.5% of PHP 5,000,000 = PHP 75,000.
  4. Calculate Local Transfer Tax: 0.75% of PHP 5,000,000 = PHP 37,500.
  5. Total Taxes: PHP 300,000 + PHP 75,000 + PHP 37,500 = PHP 412,500.

This amount represents a significant cost that the seller must account for in the transaction.

Common Scenarios and Negotiations

While common practice is for the seller to pay CGT and the buyer to pay DST and Transfer Tax, everything is negotiable. In a seller's market, buyers may offer to pay all taxes to make their offer more attractive. Conversely, in a buyer's market, sellers might agree to split costs or even cover a larger share to close the deal. A frequent negotiated arrangement is for the seller to pay CGT and the buyer to pay DST and Transfer Tax. The chosen arrangement must be explicitly written into the Deed of Sale to avoid disputes.

Verifying Local Rates and Next Steps

Always confirm the exact local transfer tax rate with the Treasurer's Office of the city or municipality where the property is located. Their ordinance may set a rate lower than the legal maximum. Once the financials are settled, the key document to execute is the Deed of Sale of Real Property. This legal contract formalizes the transfer of ownership. It should accurately state the final sale price, the property details, the parties involved, and crucially, a clause specifying which party is responsible for paying each of the taxes (CGT, DST, Transfer Tax) and other registration fees. Having this clarity protects both the buyer and the seller.

Frequently asked questions

Who usually pays the Capital Gains Tax in the Philippines?

By established common practice and often by contractual agreement, the Capital Gains Tax (CGT) is paid by the seller of the property. However, this can be negotiated, and the buyer may agree to pay it.

What if the BIR Zonal Value is higher than my selling price?

You will still be taxed on the higher BIR Zonal Value. For both CGT and DST, the tax base is the highest amount among the selling price, BIR zonal value, or assessor's fair market value. This rule is designed to prevent tax evasion through under-declaration.

Is the local transfer tax rate the same everywhere?

No. The Local Government Code sets maximum rates (0.75% for Metro Manila, 0.5% for other cities and municipalities), but each Local Government Unit (LGU) can enact its own ordinance setting the exact rate, which may be lower than the maximum. Always check with the local Treasurer's Office for the current applicable rate.

Are there other fees besides these three taxes?

Yes. Additional costs include registration fees with the Registry of Deeds, notarial fees for the Deed of Sale, and fees for securing tax clearances (Certificates Authorizing Registration). These are not included in this calculator's estimate.

Can I use this calculator for a property inheritance or donation?

No. This calculator is specifically for a sale or transfer for valuable consideration. Inheritance and donation are subject to different taxes like Estate Tax and Donor's Tax, which have different rules and rates.

Where do I find the BIR Zonal Value and local transfer tax rate?

The BIR Zonal Value can be inquired at the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) that has jurisdiction over the property's location. The exact local transfer tax rate must be verified with the City or Municipal Treasurer's Office where the property is situated.

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