Capital Gains Tax on a ₱3 Million Condominium Sale in the Philippines (Comprehensive Legal Guide, 2025 Edition)

1. Executive Snapshot

Item	Quick Figure (₱3 M selling price)*	Statutory Basis
Capital Gains Tax (CGT)	6 % → ₱180,000	NIRC¹ §24(D)(1) [individuals]; §27(D)(5) [corporations]
Documentary Stamp Tax (DST)	1.5 % → ₱45,000	NIRC¹ §196
Local Transfer Tax	up to 0.50 % → ₱15,000 (city/municipality-dependent)	Local Government Code² §135
Registration Fee	0.25 % → ₱7,500 + minor surcharges	LRA-Deeds Reg’n Schedule
Value-Added Tax (VAT)	None – below 2025 threshold of ₱4,200,000	NIRC¹ §109(P) as indexed
Real Property Tax Arrears / HOA	Case-to-case	Local ordinances / HOA bylaws

*Computations use the higher of: (a) Selling price; (b) BIR zonal value; or (c) Assessor’s fair market value (FMV). Replace ₱3 M above if zonal/FMV is higher.

2. Legal Framework & Key References

Law / Issuance	Relevance	Latest Key Amendment
National Internal Revenue Code (NIRC) – Republic Act 8424, as amended	CGT (6 %), DST (1.5 %), VAT exemptions, filing deadlines, penalties	TRAIN Law (RA 10963, 2018); CREATE Law (RA 11534, 2021)
Revenue Regulations (RRs)	Detailed mechanics (forms, valuation, deadlines)	RR 1-2018, RR 7-2021, RR 4-2022
Revenue Memorandum Circulars (RMCs)	FAQs & procedural clarifications	RMC 60-2020 (principal residence exemption); RMC 24-2024 (digital CAR)
Local Government Code (LGC) – RA 7160	Transfer tax rate caps and collection	City/Municipal tax ordinances
Condominium Act – RA 4726	Defines real property interest & condo certificates	No CGT-specific amendment
Land Registration Authority (LRA) Schedules	Registration fees & annotation charges	LRA Circular 35-2023

3. When Does the 6 % Capital Gains Tax Apply?

Property Type — Land, buildings and condominium units located in the Philippines that are capital assets.
Seller — Individuals, estates, trusts and domestic corporations (for land/buildings only). Foreign corporations apply graduated income tax rules instead.
Trigger Event — Execution & notarization of the Deed of Absolute Sale (or conditional sale, pacto de retro, dacion en pago, etc.).
Tax Base — 6 % of the gross higher value among Selling Price, Zonal Value, and Assessor’s FMV. No deductions for broker’s fee, mortgage payoff, or repairs.

Capital vs. Ordinary Asset: For individuals, residential property not used in trade/business is automatically a capital asset. For corporations, property held for lease or as inventory is an ordinary asset (subject to 25 % / 20 % corporate income tax + 2 %/6 % CWT instead of CGT).

4. Detailed Computation (Illustrative)**

Basis	Amount (₱)	Which is Higher?
Deed of Sale price	3,000,000	← assume lowest
BIR zonal value	3,400,000	Highest
Provincial FMV	3,200,000

Using zonal value 3.4 M:

Tax	Rate	Computation	Payable
CGT	6 %	3,400,000 × 6 %	₱204,000
DST	1.5 %	3,400,000 × 1.5 %	51,000
Transfer Tax (LGU, say 0.5 %)	0.5 %	3,400,000 × 0.5 %	17,000
Registration Fee (0.25 %)	0.25 %	3,400,000 × 0.25 %	8,500

** Numbers round to nearest peso; verify exact local rates.

5. Compliance Timeline & Workflow

Step	Responsible Party	Deadline / Form
1. Notarize Deed of Sale	Seller/Buyer	Day 0
2. Secure Tax Clearance for Real Property Tax	Seller	Before BIR filing
3. File BIR Form 1706 (CGT) & pay	Seller	Within 30 days from notarization
4. File BIR Form 2000-OT (DST) & pay	Buyer (usually)	Same day (practical) – legally 5th day after month-end
5. Submit documentary requirements to BIR ONETT-CAR Office	Whoever files	Within CGT deadline
6. Obtain CAR (Certificate Authorizing Registration)	Claimant	≈ 5-20 business days after complete docs
7. Pay Transfer Tax at City/Municipal Treasurer	Buyer	Within 60 days (default LGC)
8. Present CAR + Treasury receipt to Registry of Deeds; pay registration fees	Buyer	As soon as CAR issued
9. Secure new Condo Certificate of Title (CCT) & Tax Declaration	Buyer	Registry releases 2-4 weeks

BIR now accepts electronic appointments & issues eCAR with QR codes (RMC 24-2024).

6. Exemptions, Special Rates, and Planning Notes

Scenario	Tax Treatment	Key Conditions
Sale of Principal Residence	CGT exemption (0 %)	➊ Seller is natural person; ➋ Dwelling is principal residence; ➌ Full proceeds reinvested in new principal residence within 18 months; ➍ File BIR 1706-PR and Sworn Declaration; ➎ Availment only once every 10 years (NIRC §24(D)(2); RR 14-2000).
Installment Sales	CGT still 6 % on full FMV upfront	Seller may post surety bond if payment staggered.
Expropriation Sales to Government	Seller may opt for 6 % CGT or normal income tax rates	Election is irrevocable (NIRC §24(D)(3)).
Corporate Seller – Non-Land/Building	Ordinary asset rules; no CGT	Condo units count as “buildings”, hence 6 % CGT still applies.
VAT on Residential Dwellings	Exempt if ₱4,200,000 or below (indexed 2025 threshold)	Price tested against every unit; excess subject to 12 % VAT.
Donation instead of Sale	Donor’s Tax (6 %) replaces CGT; still DST	FMV basis; exemptions for legitimate heirs under certain thresholds.
Estate Transfer	Estate Tax (6 %) replaces CGT	Applies on death; heirs file BIR 1801 within 1 year.

7. Penalties for Late or Erroneous Filing

Violation	Surcharge	Interest	Compromise / Criminal
Late CGT or DST filing	25 % of basic tax	12 % p.a. (or rate per TRAIN)	₱1,000–₱50,000 compromise; criminal under NIRC §255
Undervaluation / false zonal disclosure	50 % (fraud)	12 % p.a.	Criminal, plus possible tax evasion case
Failure to pay LGU transfer tax	25 % surcharge	2 % per month	Annotated lien on CCT

BIR computer systems now cross-match deeds with RESPER (Land Registration Authority) and refuse CAR issuance if arrears exist.

8. Practical Checklist for Sellers & Buyers

Check Zonal Values — Download the latest schedule (ask BIR RDO).
Clear Real Property Taxes & Condo Dues before signing.
Draft Deed Carefully — Specify who pays which tax; but note seller remains primarily liable for CGT.
Compute Using the Highest Value to avoid later deficiency assessments.
File Within 30 Days to stop interest clock. Secure BIR e-appointment early.
Keep Originals of: notarized deed (3 copies), tax clearance, IDs, CAR, Official Receipts.
Record the Sale with HOA/Admin to update condo records; some require transfer fees.
Scan Everything—BIR now permits eCAR re-print with QR verification.

9. Frequently Asked Questions

Question	Short Answer
Who physically pays at the bank?	Either party—payment acknowledged in CAR, but legal burden for CGT is on seller, DST on buyer unless contract says otherwise.
Is mortgage balance deductible from CGT?	No. CGT is on gross, not net proceeds.
Can I credit CGT against my income tax?	No; CGT is a final tax.
What if the condo is less than 2 years old?	Holding period is irrelevant; usage classification (capital vs ordinary asset) controls.
Does a foreigner seller get taxed differently?	Same 6 % CGT if property is land/building/condo; ownership restrictions affect acquisition, not disposition.
Can I donate the condo then buyer reimburses me?	BIR characterizes substance over form; likely still a sale—expect CGT and DST.

10. Recent & Upcoming Developments (as of July 7 2025)

Update	Effect
Indexation of VAT-exempt threshold (RR 4-2024)	Threshold for VAT-exempt sale of residential dwellings adjusted from ₱3,199,200 to ₱4,200,000 effective Jan 1 2025.
Digital CAR portal nationwide rollout (RMC 24-2024)	End-to-end e-CAR issuance; physical green CAR no longer printed after Dec 2025.
LGU Electronic Transfer Tax System pilots (QC, Cebu City)	Pay transfer tax via e-wallets; bring QR receipt to Registry of Deeds.
Pending bill (House Bill 9962)	Proposes lowering CGT to 5 % on affordable housing < ₱4 M; still at committee level—no effect yet.

11. Conclusion

Selling a ₱3 million condominium today remains squarely within the Philippine capital gains tax regime: a final 6 % levy computed on the BIR-determined highest value. While the tax appears straightforward, hidden trip-ups—zonal values, tight 30-day deadlines, DST coordination, LGU transfer taxes, and new digital processes—can stall a transfer and rack up penalties. Careful advance computation, document gathering, and on-time filings are essential. Where the unit is a principal residence, consider the once-every-10-years CGT exemption; if priced under ₱4.2 M, enjoy the VAT exemption too.

For high-stakes transactions, obtain a tax clearance opinion or engage a Philippine-licensed tax lawyer or CPA—particularly when corporate structures, inheritance issues, or cross-border elements complicate the analysis.

Disclaimer: This article is for general information only and does not constitute legal or tax advice. Consult the Bureau of Internal Revenue regulations and professional counsel for transaction-specific guidance.