The Real Cost of Buying Property in the Philippines: Taxes, Closing Costs & Who Pays What (2026)

The price on the listing is never the price you pay. By the time a Philippine property changes hands, taxes, registration, and professional fees have added a layer on top — and a separate, larger layer onto what the seller nets. Buyers who budget only for the down payment and the loan get an unpleasant surprise at closing; sellers who forget the capital gains tax watch a chunk of their proceeds vanish.

This guide lays out every closing cost on a Philippine home purchase, the current rates, who customarily pays each, and a full worked example on a ₱5,000,000 condo so you can see the real numbers. Treat the customary split as the market default, not a legal rule — almost all of it is negotiable and the deed of sale is what actually decides.

The one rule behind every tax: highest of three values

Before any percentage, know how the base is set. The transfer taxes — capital gains tax, documentary stamp tax, transfer tax, registration — are not calculated on the contract price alone. They are computed on the highest of three figures:

1. the actual selling price in the deed,
2. the BIR zonal value for that location, and
3. the local assessor's fair market value.

So even if you negotiate a low headline price, the tax floor is whatever the BIR and the LGU say the property is worth. You can check zonal values before you compute anything, and sanity-check the price itself against the price per square metre by city tool.

Who customarily pays what

There is a market convention, and there is the contract. By custom the split looks like this — but every line is negotiable, and on some items even the law is ambiguous about who is the default payer:

The seller carries the two biggest items — capital gains tax and the broker's commission — so the seller's total runs much higher than the buyer's. As a rough guide, the buyer pays about 2.5%–4% of the price and the seller about 9%–11% (6% CGT plus a 3%–5% commission), for an all-in transaction cost of roughly 12%–15% across both sides.

The seller's side

Capital Gains Tax — 6%. On a resale (a property held as a capital asset), the seller pays a 6% final tax on the highest of the three values. It is called a capital gains tax but it is charged on the gross value, not the profit. It is due within 30 days of notarization. The seller is the statutory taxpayer, though buyers often insist on withholding it from the proceeds and paying the BIR directly, because the eCAR — the BIR clearance that proves the transfer taxes are paid — cannot be issued until it is settled, and without the eCAR the Registry of Deeds will not transfer the title.

Broker's commission — 3% to 5%. Customarily the seller's cost, typically 3%–5% of the price (up to 5% for raw or agricultural land), plus 12% VAT if the broker is VAT-registered. Not fixed by law; set by agreement.

Unpaid amilyar. Any Real Property Tax in arrears up to the transfer date is the seller's to clear.

The buyer's side

Documentary Stamp Tax — 1.5%. On the higher of price or fair market value, due by the 5th day of the month after notarization. By market custom the buyer pays it, although both parties are legally liable and some law firms read the tax code's default as the seller's — so pin it down in the contract.

Transfer Tax — 0.5% to 0.75%. A local government tax: up to 0.5% in provinces, up to 0.75% in cities and Metro Manila, on the higher of price or FMV. Usually the buyer's, typically due within about 60 days of the deed.

Registration fee. Paid to the Registry of Deeds to register the new title, on the Land Registration Authority's sliding scale — roughly 0.25% to 1% of value depending on the bracket. On a multi-million-peso property it lands in the low tens of thousands.

Notarial fee. Custom cites 1%–2% of the price, but it is routinely negotiated down to around 0.5%–1%, and many deals settle far lower. Worth haggling.

Processing and miscellaneous. Condo or developer transfer / IT fees, title-processing service charges, and the cost of certified documents. Budget a buffer.

VAT: the cost that can dwarf the transfer taxes

There is one threshold that changes the entire picture on a new unit bought from a developer. The sale of a residential dwelling priced at or below ₱3,600,000 is VAT-exempt (the ceiling was raised from ₱3.199M effective 1 January 2024). Above that threshold, a developer sale carries 12% VAT — which is far larger than all the transfer taxes combined.

There is also a structural difference between buying resale and buying new:

• Resale (capital asset): the 6% capital gains tax applies (the seller's). No VAT.
• Developer / new (ordinary asset): no capital gains tax, but a creditable withholding tax of 1.5% / 3% / 5% (by price band) plus 12% VAT if the unit is over the ₱3.6M exemption.

So a ₱6,000,000 brand-new condo can carry roughly ₱720,000 in VAT on top of the price — a line item that simply does not exist on a resale of the same unit. Always ask whether a quoted price is VAT-inclusive.

A worked example: a ₱5,000,000 resale condo

Assume a resale condo (capital asset) with a ₱5,000,000 selling price that is also the highest of the three values. Here is how the costs fall:

The buyer walks in expecting to add roughly ₱140,000–₱150,000 (about 3%) to the purchase price. The seller quietly loses ₱450,000–₱550,000 off the top. Knowing this before you negotiate lets you price it in — a buyer can ask the seller to absorb the DST, a seller can build the commission into the asking price.

Deadlines that cost money if you miss them

Late filing triggers surcharges, interest, and penalties, so calendar these from the notarization date:

• Capital Gains Tax: within 30 days (BIR).
• Documentary Stamp Tax: by the 5th day of the following month (BIR).
• Transfer Tax: typically within 60 days (LGU — confirm the exact deadline locally).

Miss a BIR deadline and you face a 25% surcharge plus interest; a late transfer tax triggers separate penalties set by the LGU. Either way it is an avoidable, pure-loss cost.

Budget for the total, not the sticker

The honest way to shop is to add your side of the closing costs to every price you consider, and — if you are the seller — to subtract yours before you celebrate the headline number. For a clearer split of the taxes themselves, see our guide to Philippine property taxes; to gauge whether the price is fair before you even reach closing, run it through the instant property valuation and the price per square metre tools. This is general information, not tax or legal advice — confirm the current rates with the BIR and your LGU, and have a licensed broker or lawyer handle the actual filing.