There is a lot to worry about when buying a condo, house or any other type of property in the Philippines. And once you find that dream home, the process of completing the deal involves several additional steps. That includes paying all the taxes in order to register the property under your name.
Simply paying the seller is not enough to have a house be recognized as your own. You also need to pay the government mandated taxes in order to make the purchase official. Today, we are going to go over some of the taxes property buyers are required to pay in the Philippines.
(Editor’s note: Sellers must pay different taxes. We will publish these at a later date.)
Property taxes buyers must pay in the Philippines
Documentary Stamp Tax
Property buyers are obligated to pay the Documentary Stamp Tax. This 1.5 percent tax is based on the selling price, fair market value or zonal value. The highest total of these three is used to calculate the tax responsibility.
Transfer Tax
In order to have the title of a property transferred, the buyer will first need to pay the transfer tax. This tax is calculated based upon the selling price, fair market value or zonal value and varies from location to location. In most places, the transfer tax rate is 0.5 percent, but be sure to check this before agreeing to buy.
Registration Fee
The final tax you will need to pay before buying a property is the registration fee, which is usually 0.25 percent of the original selling price of the property. This is paid at the Registry of Deeds, and you will need to show proof of payment of all other taxes at this time. Once this is completed, the transaction is done, and the home is officially yours.
Don’t forget the Real Property Tax
While the property is yours once those taxes have been paid, you aren’t entirely in the clear. Some local governments in the Philippines have a Real Property Tax that is imposed on all types of real estate property, including landed houses and condo units. The Real Property Tax isn’t more than two percent of the property value in most areas of the country.
