Philippines Property Tax Guide 2026

Overview — Property Taxation in the Philippines

Property taxes in the Philippines are administered at both the national and local levels. The national government imposes capital gains tax (CGT) and documentary stamp tax (DST) on property transactions, while local government units (LGUs) — provinces, cities, and municipalities — levy the annual Real Property Tax (RPT) and the transfer tax. The system is governed by the Local Government Code (Republic Act No. 7160) and the National Internal Revenue Code. The Philippines does not impose an annual wealth tax or net worth tax on property holdings.

Real Property Tax (RPT) — 0.25% to 1% of Assessed Value

The Real Property Tax (RPT) is an annual tax levied by provinces, cities, and municipalities on the assessed value of real property (land, buildings, improvements). Key features:

• Rate: 0.25% to 1% of the assessed value, depending on the LGU classification (province, city, municipality within Metro Manila)
• Basic rate: Generally 1% for provinces and 0.5% for cities (Metro Manila cities may have additional rates)
• Assessed value: A percentage of the fair market value determined by the provincial/city assessor, based on the property classification (residential, commercial, industrial, agricultural)
• Residential properties typically have a lower assessment level (e.g., 20% of market value) compared to commercial (50%)
• RPT is payable quarterly (on or before 31 January, April, July, October) or annually in full by 31 January
• Senior citizens may be eligible for a 5% discount on RPT for their primary residence

The RPT is deductible against the gross income of the property owner for income tax purposes.

Local Transfer Tax — 0.5% to 0.75%

Upon the sale or transfer of real property, the province or city levies a local transfer tax (also called conveyance tax or deed of sale tax):

• Rate: 0.50% (in most provinces) up to 0.75% (in some cities, e.g., Metro Manila) of the selling price or fair market value, whichever is higher
• This tax is payable by the buyer, typically within 60 days of the sale
• The tax is in addition to the national CGT (6%) and DST (1.5%) discussed below

Capital Gains Tax (CGT) on Property — 6%

The sale or disposition of real property classified as a capital asset (not held as inventory in the ordinary course of business) is subject to a final withholding tax of 6%:

• Rate: 6% of the gross selling price or the BIR zonal value, whichever is higher
• The tax is paid by the seller (or withholding by the buyer if the seller is a non-resident)
• The 6% CGT applies to the sale of residential and commercial real estate
• Primary residence may be exempt from CGT under certain conditions (see below)
• The CGT on property is a final tax — it is not reported as part of the regular income tax return

Primary Residence Exemption from CGT

The sale of a principal residence (primary family home) may be exempt from the 6% CGT if the following conditions are met:

• The proceeds are fully utilised in acquiring or constructing a new principal residence within 18 months
• The seller notifies the BIR of the intent to avail of the exemption and provides documentation
• The exemption can be availed only once every 10 years
• The property must have been the seller's principal residence as declared for tax purposes
• If the full proceeds are not reinvested within 18 months, the exemption is forfeited and the CGT plus penalties become due

Documentary Stamp Tax (DST) — 1.5% to 3%

The Documentary Stamp Tax (DST) is a national tax imposed on documents, instruments, and papers evidencing the transfer of real property:

• Rate: 1.5% on the sale or transfer of real property (3% on shares of stock, 1.5% on loans/mortgages)
• Computed on the selling price or zonal value, whichever is higher
• Paid by the seller (or as agreed between the parties)
• DST is paid at the BIR before the deed of sale is notarised

Property Tax Summary Table

• Annual RPT: 0.25–1% of assessed value (local government, quarterly/annual)
• Transfer Tax: 0.50–0.75% of selling price/zonal value (local, one-time)
• CGT on Sale: 6% of gross selling price or zonal value (national, one-time)
• DST: 1.5% of selling price or zonal value (national, one-time)
• Annual Wealth Tax: 0% (none)

FAQs

What is the difference between assessed value and market value?

Market value is the property's fair market price as determined by the provincial/city assessor (updated periodically). Assessed value is a percentage of market value based on property classification (e.g., 20% for residential, 50% for commercial). RPT is computed on the assessed value, while CGT and DST are computed on the higher of the selling price or the BIR zonal value.

How do I pay RPT?

RPT is paid at the city or municipal treasurer's office where the property is located. Payment can be made quarterly (on or before 31 Jan, Apr, Jul, Oct) or annually in full by 31 January. Some LGUs offer discounts for early or annual payment.

What is the BIR zonal value?

The zonal value is the estimated fair market value of real property per square metre in a specific zone or area, determined by the BIR. It is used as the minimum basis for computing CGT, DST, and other transaction taxes. Zonal values are published in Revenue Memorandum Orders (RMOs) and updated periodically.

Is there a wealth tax on property in the Philippines?

No. There is no annual wealth tax, net worth tax, or property holding tax beyond the RPT. The RPT is a local tax on property, not a wealth tax. The Philippines abolished its wealth tax long ago and has no plans to reintroduce one.

Disclaimer

This guide provides general information about Philippine property taxes for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Philippine tax professional or the BIR directly for advice specific to your situation. InvestmentKit does not provide tax advice.