Capital Gains Tax and Other Fees You Need to Pay for Title Transfer in the Philippines

Transferring ownership of real property in the Philippines involves complying with several mandatory taxes and fees. Whether buying or selling, it is essential to understand which party is responsible for each tax and when these payments are due. The most prominent of these taxes is the Capital Gains Tax (CGT), which is imposed on the seller and is computed based on the presumed gain from the sale, exchange, or disposition of real property classified as a capital asset. In addition to CGT, other fees such as Documentary Stamp Tax, Transfer Tax, and Registration Fees are required. Being aware of these costs, their applicable rates, and deadlines ensures a smooth, efficient, and legally compliant transfer of ownership.

Before proceeding with the transaction, here is a concise summary of the taxes and fees involved in transferring real property titles in the Philippines, detailing the responsible party, computation basis, and where payments should be made.

Summary Table of Taxes and Fees

Tax/Fee	Rate/Amount	Paid By	Notes
Capital Gains Tax	6% of the gross selling price (GSP) or Fair Market Value (FMV), whichever is higher	Seller (usually)	Applies to capital assets only
Documentary Stamp Tax	Varies by document and transaction. For real property, it's PHP 15.00 for every PHP 1,000 of the consideration value.	Buyer	Required for registration
Transfer Tax	0.5% to 0.75% local rate	Buyer	Paid to LGU treasurer’s office
Registration Fees	Variable, based on property value	Buyer	Paid to Registry of Deeds

Among them, Capital Gains Tax (CGT) is one of the most significant charges, but there are others you need to account for as well.

Below is a detailed breakdown of the taxes and fees involved in a title transfer—who pays what, how much, and the applicable deadlines.

What Is Capital Gains Tax (CGT)?

Capital Gains Tax is a tax imposed on the presumed profit from the sale, exchange, or disposition of real property classified as a capital asset. Capital assets refer to properties not used in trade or business nor held for sale in the ordinary course of business (e.g., residential homes, vacant lots).

• Rate: 6% of the gross selling price (GSP) or Fair Market Value (FMV), whichever is higher.

• Fair Market Value: Determined using the higher of:

  • The BIR zonal value, or

  • The assessed value from the local government (Assessor’s Office).

    
    

Example: If the selling price is ₱2,000,000 but the BIR zonal value is ₱2,500,000, the CGT will be computed based on ₱2,500,000.

Who Pays the Capital Gains Tax?

Legally, the seller is liable. However, parties may negotiate payment terms. Regardless of the agreement, the BIR holds the seller accountable.

Other Taxes and Fees Related to Title Transfer

1. Documentary Stamp Tax (DST)Rate: The Documentary Stamp Tax is a variable tax on documents and transactions, such as a PHP 15.00 charge per PHP 1,000 of real property value. 

Who Pays: Usually the buyer.

Purpose: Required for the execution and registration of the sale.

2. Transfer Tax

Rate: 0.5% in most provinces & 0.75% in Metro Manila and certain highly urbanized cities

Who Pays: Buyer

Where Paid: Local Government Unit (LGU) Treasurer’s Office

3. Registration Fee

Rate: Based on the contract price or the FMV, whichever is higher, as determined by the Registry of Deeds (or Land Registration Authority for some cases).

Who Pays: Buyer

Where Paid: Registry of Deeds, for the issuance of a new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)

Practical Tips

• Confirm Property Classification: Determine whether the property is a capital asset or an ordinary asset to apply the correct tax treatment.

• Use Official Valuations: When computing taxes, use the highest value among the gross selling price, the fair market value as determined by the Provincial or City Assessor, and the Zonal Value as determined by the Commissioner of Internal Revenue.

• File and Pay on Time: Submit the correct tax returns and pay the corresponding tax liabilities within the prescribed deadlines to avoid penalties.

• Keep All Receipts: Retain copies of official receipts and all other proof of tax payments for the title transfer process and for future reference.

References

• Multilaw, Real Estate Guide Philippines: https://multilaw.com/Multilaw/Multilaw/RealEstate/Real_Estate_Guide_Philippines.aspx

• Bureau of Internal Revenue (BIR), Capital Gains Tax: https://www.bir.gov.ph/capitalgainstax

• Lawyer Philippines, Transferring Title and Capital Gains Tax Liability: https://www.lawyer-philippines.com/articles/transferring-title-and-capital-gains-tax-liability-for-real-estate-purchase-in-the-philippines

• Respicio & Co., How to Calculate Land Transfer Taxes in the Philippines: https://www.respicio.ph/commentaries/how-to-calculate-land-transfer-taxes-in-the-philippines