Four taxes fall on a land title transfer, and the property’s classification decides which apply

A sale of a capital asset draws capital gains tax at six percent, due thirty days from notarization. A sale by someone in the real estate business draws creditable withholding tax instead. Documentary stamp tax is fifteen pesos per thousand. A local transfer tax and a registration fee follow, on their own deadlines.

First, how the property is classified

Before any rate applies, the property has to be classified. Ordinary assets are stock in trade, property held primarily for sale to customers in the ordinary course of business, depreciable property used in business, and real property used in business.¹ Everything else the taxpayer holds is a capital asset, and that classification decides which tax applies, at what rate, on which form, and by which deadline. Getting it wrong means filing the wrong return.

Capital gains tax, where the property is a capital asset

The rate is a final tax of six percent, imposed “based on the gross selling price or current fair market value... whichever is higher”.² The same provision gives one option: on a sale to the government, its subdivisions or agencies, or a government-owned or controlled corporation, the tax may be determined either at the six percent or under the ordinary income tax rates, at the taxpayer’s option.²

The provision is section 24(B)(4) of the Tax Code, renumbered by the 2025 amending Act.³

The return is filed “within thirty (30) days following each sale or other disposition”,⁴ and the Bureau reckons those thirty days from the notarization of the deed.⁵ The form is BIR Form No. 1706.⁵

Where the buyer agrees to shoulder the capital gains tax, the Bureau’s position is that the amount of the tax “should not be included/added in the selling price indicated in the DOAS for purposes of determining the tax base”.⁶

A principal residence is exempt where the proceeds are fully used to acquire or build a new one within eighteen months, once every ten years, on notice to the Commissioner within thirty days of the sale.⁷

Or creditable withholding tax, where the property is an ordinary asset

Where the property is an ordinary asset rather than a capital asset, there is no capital gains tax at all. A creditable withholding tax applies instead, on the same higher-of base, and the buyer is the withholding agent.⁸ Whether the seller is habitually engaged in the real estate business does not decide which tax applies; it decides the rate.

The rates step with the price: 1.5 percent where the selling price is 500,000 pesos or less, 3 percent above that up to 2,000,000 pesos, and 5 percent above 2,000,000 pesos. Where the seller is not habitually engaged in the business, the rate is 6 percent.⁸

Registration with the housing regulator makes a seller habitually engaged, and someone unregistered may still be shown to be so, for instance by having closed at least six taxable real estate transactions in the preceding year.⁸ The regulation still names the Housing and Land Use Regulatory Board and the Housing and Urban Development Coordinating Council, both of which were reorganized in 2019: the Department of Human Settlements and Urban Development took over the coordinating body’s functions, and the regulatory board’s adjudicatory work moved to the Human Settlements Adjudication Commission.¹⁸

The form is BIR Form No. 1606. On a cash sale, payment falls on the tenth day of the month following the month of notarization, a different deadline again; an installment sale has its own timing, which turns on whether the buyer is engaged in trade or business.⁵ Two practice points from the Bureau: multiple sales may not be lumped into one return, and a lumped return will not be accepted as proof of payment when the certificate is processed; and BIR Form No. 2307 is no longer issued in lieu of Form 1606 with proof of payment.⁹

Documentary stamp tax

The rate is fifteen pesos for the first thousand pesos of consideration or value, and fifteen pesos “[f]or each additional One thousand pesos (P1,000), or fractional part thereof”.¹⁰

Because of the words “or fractional part thereof”, the tax is not exactly 1.5 percent. It rounds up to the next whole thousand, so on 2,500,500 pesos it is 37,515 pesos rather than 37,507.50.

The base is the consideration or the fair market value, whichever is higher, except on a government transaction, where it is the actual consideration.¹⁰

Two provisions state the deadline, and the shorter governs. The Tax Code sets ten days after the close of the month, but it opens with “[e]xcept as provided by rules and regulations promulgated by the Secretary of Finance”, and the regulations prescribe five. The Bureau confirmed in 2024 that the five-day rule stands.¹¹ So the return is due within five days after the close of the month in which the deed was notarized.⁵ The form is BIR Form No. 2000-OT.⁵

The local transfer tax

This is a provincial tax, capped at “fifty percent (50%) of the one percent (1%)” of the consideration or of the fair market value where the monetary consideration is not substantial, whichever is higher.¹² A city may exceed the provincial ceiling by up to half again,¹³ which is why city rates are higher. That uplift is available to every city, not only to those in Metro Manila.

The provision does not refer to the zonal value.

It falls due “within sixty (60) days from the date of the execution of the deed or from the date of the decedent’s death”, and the statutory duty to pay rests on the seller, donor, transferor, executor, or administrator.¹⁴ The provision also exempts a transfer made under the agrarian reform law.¹⁴ In practice the parties often agree that the buyer pays it, which changes who hands over the money but not who the statute charges.

The rate itself is fixed by the local revenue ordinance. Ask the Treasurer of the city or province where the land sits, and rely on a rate only where it is traced to the ordinance.

The registration fee, and the certificate

The registration fee at the Registry is calculated on a value. For the specific transactions dealt with in the Property Registration Decree’s own fee schedule, the Authority stated in October 2025 that the base is “the current assessed value of the property, unless otherwise provided, but never the zonal value”.¹⁵

As published, the Bureau charges a certification fee of 100 pesos and 30 pesos of documentary stamp tax for each electronic Certificate Authorizing Registration.¹⁶

Where the transfer is not a sale

Everything above assumes a sale. A transfer on death and a transfer by donation are taxed under their own provisions, at their own rates and on their own deadlines, and neither follows the rules above. Each is the subject of its own treatment.

The base is in transition

The valuation provision that all of the above cross-refers to has been repealed. The 2024 valuation reform Act repealed section 6(E) of the Tax Code outright,¹⁷ and provides that the Commissioner “shall use the SMV or the actual gross selling price in consideration... whichever is higher, in computing any internal revenue tax”, with the same schedule becoming the basis for local transfer tax as well.¹⁸

Its transitional provision keeps the existing values running in the meantime: where the schedules are not yet available or updated, the Commissioner adopts “the existing SMVs, zonal values or the actual price in consideration... whichever is higher”.¹⁹ The Bureau’s July 2026 guidance still states the base as the higher of the selling price and the fair market value, being the zonal value or the assessor’s schedule, “until repealed, superseded, modified, revised, set aside, or replaced” by the new schedules.⁵

Check whether the locality’s schedule of market values has been approved before assuming which base applies.

Penalties

Late filing or payment, or filing with the wrong office, attracts a surcharge of twenty-five percent, rising to fifty percent for a willful or fraudulent return, plus interest at double the legal interest rate set by the Bangko Sentral ng Pilipinas from the due date until payment.²⁰ Ask for the current rate before computing, because it moves.

Which office each of these is paid at, and in what order, is set out in the order the offices must be visited in. This is real estate work, and the three deadlines start on the same day and end on different days, so the notarization date should be diarized before the deed is signed.