Four charges on the purchase, none of them the price
A Philippine property purchase carries a national tax on the sale itself, a national stamp tax on the deed, a local transfer tax collected by the province or city, and registration fees at the Register of Deeds. Everything below is described as it is commonly assessed in practice; the exact figures for your purchase come from the deed, the Bureau of Internal Revenue's zonal schedule and the local ordinance that apply to that specific property. One boundary worth stating plainly: Philippine taxes are separate from any Chinese tax exposure — whether the purchase, or a later sale, has consequences on the China side is a matter of Chinese law, and worth advice there.
Capital gains tax — the seller's tax, until the contract moves it
On a sale of real property held as a capital asset, capital gains tax is commonly assessed at six percent of the higher of the gross selling price or the fair market value, with the zonal valuation for the location usually supplying that value. It is a tax on value, not on profit: a seller who breaks even still pays. By custom it is the seller's tax — but in practice it is often shifted, and developer contracts and “net of tax” pricing push it to the buyer more often than buyers notice. The allocation is negotiable; what matters is that the deed or contract to sell says in words who pays it and by when, because the deadlines run from notarisation.
Stamp tax, transfer tax, registration and notarial fees
The documentary stamp tax on a conveyance of realty is collected under Section 196 of the National Internal Revenue Code at fifteen pesos for the first one thousand pesos of the consideration or value and fifteen pesos for each additional one thousand pesos or fraction of it — and the same provision lets the revenue officer reassess at true market value where the deed understates the price, which is why writing a smaller number in the deed is not a saving. The local transfer tax is collected by the provincial or city treasurer under the local government's own ordinance, computed against the consideration or the fair market value, commonly with a short payment window after notarisation. Registration fees follow the Register of Deeds' published schedule, rising with the value, alongside smaller annotation and certified-copy charges. Notarial fees on the deed are negotiated and customarily fall to the buyer. The customary split — seller: capital gains tax and broker's commission; buyer: stamp tax, transfer tax, registration and notarial fees — is custom, not law, and mis-assumed allocations are among the most common closing disputes we see.
The eCAR — the clearance that unlocks the title
Once the national taxes on the transaction are paid, the Bureau of Internal Revenue issues an electronic Certificate Authorizing Registration, the eCAR. It is not a formality: the Register of Deeds will not issue a new title in your name without it, so a buyer can be fully paid, notarised and in possession and still not be the registered owner. This is why payments should be sequenced against tax milestones rather than calendar dates, and why the tax arithmetic belongs inside the due diligence rather than after it. What happens from eCAR to new title is the transfer process itself, mapped on our land title transfer page.
After you own: real property tax and condominium dues
Ownership has running costs. Real property tax is assessed yearly by the city or municipality against the property's assessed value, commonly with discounts for early payment and surcharges for delay under the local ordinance; unpaid years follow the property, not the person, which is why arrears are checked before you buy. A condominium unit adds the condominium corporation: your unit comes with membership or shares in it, and with monthly dues that fund the upkeep of the common areas, plus occasional special assessments for larger works. Unpaid dues are typically enforceable against the unit under the project's master deed, so a seller's unpaid dues become the buyer's problem exactly the way tax arrears do.
Getting the real number before you sign
Ask for the computation in writing before the deed is signed: each tax, its base, who pays it, and the deadline. A serious seller or developer will produce it; reluctance to produce it is itself information. The fuller treatment of each charge sits on our purchase taxes page, and the arithmetic is part of every due diligence engagement. If you are budgeting a purchase now, book a consultation.
Frequently asked questions
Who pays the capital gains tax, the buyer or the seller?
By custom the seller carries the capital gains tax and the buyer carries documentary stamp tax, transfer tax and registration fees. That allocation is custom, not law: developers commonly shift items to the buyer, and contracts reallocate them constantly. The deed should say who pays each item and by when, in words.
How much tax will the purchase add on top of the price?
Expect capital gains tax, commonly assessed at six percent of the higher of the selling price or the fair market value, plus documentary stamp tax, a local transfer tax and registration fees. Together they routinely add a meaningful single-digit percentage to the purchase, with the exact figures set by the deed, the zonal schedule and the local ordinance.
What is the eCAR and why does it matter?
The electronic Certificate Authorizing Registration is the Bureau of Internal Revenue's clearance confirming the national taxes on the transaction have been paid. The Register of Deeds will not issue a new title without it, so you can be fully paid and in possession yet still not be the registered owner until it issues.
What do I keep paying after I own the property?
Real property tax, assessed yearly by the city or municipality, and, for a condominium unit, the dues the condominium corporation collects for the upkeep of the common areas. Unpaid amounts of either follow the property, which is why arrears are part of what due diligence checks before you buy.