Property ownership and property transactions in the Philippines involve two distinct categories of tax: recurring taxes paid annually by the property owner, and transactional taxes triggered when property changes hands. Understanding both categories — what they are, who pays them, and when they are due — is essential for anyone who owns, buys, or sells real property in the Philippines.

Real Property Tax (RPT) — commonly referred to as amilyar — is an annual tax assessed and collected by the local government unit (LGU) where the property is located. It is the primary ongoing tax obligation of every property owner in the Philippines. The tax is based on the assessed value of the property, which is determined by the local assessor’s office and may differ significantly from the property’s market value.

RPT is typically paid annually, though LGUs allow payment in quarterly installments in most jurisdictions. Prompt payment is important because unpaid RPT accumulates as a lien on the property — meaning it must be settled before a clear title can be transferred. Property with years of unpaid RPT, including penalties, can carry a substantial outstanding balance that affects a sale transaction. Verify your RPT standing with the local treasurer’s office if you are considering selling, and verify the property’s RPT clearance before purchasing any resale property.

Special Education Fund (SEF) levy is an additional annual levy assessed alongside RPT in most jurisdictions. It is computed separately but collected together with RPT by the LGU. Its amount is determined by local ordinance.

When real property is transferred — whether through sale, donation, or inheritance — a set of taxes must be filed and paid before the title can be transferred at the Registry of Deeds. These taxes are processed through the Bureau of Internal Revenue (BIR) and the relevant local government unit.

Capital Gains Tax (CGT) applies to the sale of real property held as a capital asset — which covers most residential and investment property. It is computed on the higher of the gross selling price or the BIR zonal value of the property. CGT is generally the seller’s obligation and must be filed with the BIR within 30 days of the date of the Deed of Sale. Late filing incurs penalties and interest.

Documentary Stamp Tax (DST) applies to the Deed of Sale and is computed on the same basis as CGT. It is generally associated with the buyer’s obligations but is frequently subject to negotiation between buyer and seller. DST must also be filed within 30 days of the Deed of Sale date.

Transfer Tax is assessed by the local government unit where the property is located and is paid after the BIR has issued the Certificate Authorizing Registration (CAR). It is based on the selling price or fair market value as determined by the local assessor, whichever is higher.

For a detailed explanation of each tax — including how they are computed conceptually and which party bears each obligation — see the Capital Gains Tax, Documentary Stamp Tax, and Other Transfer Taxes guide in this series.

When property passes through inheritance, estate tax applies to the estate of the deceased. Estate tax is filed and paid by the heirs or estate administrator before the property can be transferred to the beneficiaries’ names. The TRAIN Law (Republic Act 10963) simplified estate tax in 2018, establishing a flat rate on the net estate. Estate settlement and estate tax compliance are prerequisites to any subsequent sale or mortgage of inherited property. For more detail, see the guide on Estate, Inherited, and Donated Properties.

Tax rates, thresholds, and assessment methodologies change with legislation and administrative orders. This guide describes the categories and obligations as they generally operate — not specific rates, which should be verified with the relevant agency (BIR or LGU) before any transaction is finalized. Always confirm current applicable rates with the relevant BIR Revenue District Office or local treasurer’s office for your specific property and transaction.