Question 1

What is Capital Gains Tax (CGT)?

Accepted Answer

Capital Gains Tax is 6% of the gross selling price or fair market value (zonal value), whichever is higher. It's paid by the seller within 30 days of sale. For properties held as capital assets (not for business), CGT applies. Properties used in business are subject to regular income tax instead.

Question 2

What is Documentary Stamp Tax (DST)?

Accepted Answer

DST is 1.5% of the selling price or zonal value (whichever is higher) for sale transactions. For loans/mortgages, it's ₱1.50 for every ₱200 of loan amount. DST is typically shouldered by the buyer but can be negotiated. It's paid to the BIR.

Question 3

What is Transfer Tax?

Accepted Answer

Transfer Tax is paid to the local government (city/municipality) when transferring property ownership. Rate varies by location: Metro Manila cities typically charge 0.5-0.75% of selling price or zonal value. It's usually shouldered by the buyer.

Question 4

What is BIR Zonal Value?

Accepted Answer

BIR Zonal Value is the minimum property value set by the Bureau of Internal Revenue for tax computation purposes. It varies by location and property classification (residential, commercial, agricultural). Even if you sell below zonal value, taxes are computed based on zonal value. Check our zonal value lookup tool.

Question 5

What is Real Property Tax (Amilyar)?

Accepted Answer

Real Property Tax (RPT), locally called "amilyar," is an annual tax on property ownership. Rate is typically 1-2% of assessed value (not market value). Assessed value = Fair Market Value × Assessment Level (varies by property type). Pay quarterly or annually to avoid penalties.

Question 6

Is there VAT on real estate?

Accepted Answer

VAT (12%) applies to: Sale of real property by VAT-registered sellers in the ordinary course of business, and sale of residential units exceeding ₱3.199 million. Exempt from VAT: Sale of residential lot not exceeding ₱1.919 million, residential house not exceeding ₱3.199 million, and low-cost housing.

Taxes & Fees FAQ

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Taxes & Fees FAQ

1What is Capital Gains Tax (CGT)?

2What is Documentary Stamp Tax (DST)?

3What is Transfer Tax?

4What is BIR Zonal Value?

5What is Real Property Tax (Amilyar)?

6Is there VAT on real estate?

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