The transfer of property title in the Philippines, whether through sale, donation, inheritance, or other modes of conveyance, involves mandatory taxes and fees imposed by the Bureau of Internal Revenue (BIR), local government units (LGUs), the Land Registration Authority (LRA) through the Register of Deeds, and incidental expenses such as notarial fees. These costs are governed primarily by the National Internal Revenue Code (NIRC) as amended by the TRAIN Law (Republic Act No. 10963), the Local Government Code (Republic Act No. 7160), the Property Registration Decree (Presidential Decree No. 1529), and various LRA circulars and issuances.

The total cost of transferring title typically ranges from 8% to 10% of the higher of the actual selling price/consideration or the fair market value (BIR zonal value or LGU assessed value), divided between seller and buyer according to law and prevailing market practice.

1. Taxes Imposed by the Bureau of Internal Revenue (BIR)

To transfer title, the Register of Deeds will require a Certificate Authorizing Registration (CAR) or Electronic Certificate Authorizing Registration (eCAR) from the BIR as proof that national taxes have been paid.

A. Capital Gains Tax (CGT) – 6%

Legal basis: Section 24(D)(1) of the NIRC, as amended by TRAIN Law
Rate: Final tax of 6% on the gross selling price or the current fair market value (higher of BIR zonal value or LGU assessed value), whichever is higher
Paid by: The seller (imposed on the gain presumed to have been realized)
When to pay: Within 30 days from the date of notarization of the deed
Who files and pays in practice: The seller (or the buyer on behalf of the seller via withholding). The buyer is constitutionally required to withhold the 6% CGT when the seller is an individual or estate and the property is classified as a capital asset.
Exemption: No CGT if the property is the seller’s principal residence and the entire proceeds are used to acquire or construct a new principal residence within 18 months (Section 24(D)(2), NIRC). The seller must apply for exemption with the BIR.

B. Documentary Stamp Tax (DST) – 1.5%

Legal basis: Section 196 of the NIRC
Rate: ₱15.00 for every ₱1,000 (or 1.5%) of the higher of the consideration or fair market value/zonal value
Paid by: Legally, the person executing or availing of the document (usually the seller), but in 95% of transactions, the buyer shoulders this cost pursuant to market practice and contract stipulation
Affixed/paid: At an Authorized Agent Bank (AAB) or Revenue Collection Officer, or online via eDST

C. Value-Added Tax (VAT) – 12% (only in specific cases)

Applies only when the seller is engaged in the real estate business (developer, dealer, or habitual seller) and the property is classified as an ordinary asset.

If VAT-applicable, the seller charges 12% VAT on the gross selling price.
CGT of 6% does NOT apply when VAT applies.
Individual one-time or occasional sellers are subject to CGT, not VAT.

2. Local Government Unit Taxes

Real Property Transfer Tax (commonly called “Local Transfer Tax”)

Legal basis: Sections 135 and 151 of the Local Government Code (RA 7160)
Rate: Not exceeding 75% of 1% of the total consideration or zonal/assessed value, whichever is higher
Actual rates in major cities (as of 2025):
- National Capital Region (Metro Manila) cities: 0.75% (Quezon City, Makati, Manila, Taguig, Pasig, etc.)
- Cebu City: 0.75%
- Davao City: 0.75%
- Some provinces/municipalities: 0.50%
Paid by: Customarily the buyer
Paid to: City or Municipal Treasurer
Required document: Official Receipt as proof of payment (required by Register of Deeds)

3. Land Registration Authority / Register of Deeds Fees

The Register of Deeds will not register the deed and issue a new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) without payment of the following:

Fee Description	Amount / Basis (as of latest LRA issuances)
Registration Fee	0.25% of the fair market value or consideration, whichever is higher (minimum ₱3,000–₱15,000 depending on value)
IT Fee / Computer Fund	₱1,000–₱2,500 (varies by registry)
Legal Research Fund (LRF)	1% of registration fee but not less than ₱100
Annotation Fee (per annotation)	₱100–₱300
Certification Fee	₱150–₱500 per certificate
Issuance of new TCT/CCT	₱500–₱1,500
Cancellation of old title	Included in registration fee

Total LRA/RoD fees usually range from ₱8,000 to ₱35,000 depending on property value and number of annotations.

4. Notarial Fees and Documentary Requirements

Notarization of Deed of Absolute Sale: ₱2,000–₱15,000 or 1–2% of selling price (customary, though the 2004 Rules on Notarial Practice suggest a schedule based on document value)
Documentary Stamp Tax on the notarial acknowledgment: ₱30–₱200 (separate from main DST)

5. Customary Allocation of Costs Between Seller and Buyer (Prevailing Market Practice in the Philippines)

Expense	Customarily Paid By	Legal Liability
Capital Gains Tax (6%)	Seller	Seller
Documentary Stamp Tax (1.5%)	Buyer	Seller (but shifted)
Local Transfer Tax (0.75%)	Buyer	Buyer
Registration Fees (LRA/RoD)	Buyer	Buyer
Notarial Fee	Buyer	Negotiable
Real Estate Broker’s Commission (3–5%)	Seller	Seller
Updated Real Property Tax (prorated)	Seller (up to date of sale)	Owner at time tax accrues
Condo/HOA Clearance & Transfer Fees	Buyer	Buyer
Capital Gains Tax Withholding	Buyer (withholds and remits)	Buyer’s duty to withhold

This allocation is not mandated by law (except CGT on seller) but is almost universally followed in broker-mediated transactions. Parties are free to negotiate differently in the Deed of Absolute Sale or Contract to Sell.

6. Special Transactions and Variations

A. Donation

Donor’s Tax: 6% of the fair market value (TRAIN Law)
DST: 1.5%
No CGT
Local transfer tax and registration fees still apply

B. Inheritance / Extra-Judicial Settlement

Estate Tax: 6% of net estate (TRAIN Law)
No CGT or donor’s tax
Judicial or extra-judicial settlement must be published and annotated
CAR/eCAR still required

C. Sale by Estate or through Judicial Foreclosure

Usually subject only to 6% CGT if capital asset
Buyer typically shoulders all transfer costs

D. Sale of Foreclosed Properties by Banks/PAG-IBOR

Banks usually pay CGT and deliver clean title
Buyer pays DST, transfer tax, registration fees

7. Recent Developments and Practical Notes (as of December 2025)

The BIR now issues eCAR almost exclusively; processing time is 3–10 days if all documents are complete.
Zonal values were last significantly updated in 2022–2024 in many areas; always check the latest BIR zonal value to avoid deficiency assessments.
The “higher of selling price or zonal value” rule means that even if parties declare a low selling price, taxes are computed on the zonal value if higher (“undervaluation penalty” risk).
Online payment facilities (eDST, ePayment via LandBank/Link.Biz, GCash for some LGUs) have significantly reduced processing time.
LRA’s Title Transfer Automation has reduced RoD processing to 1–5 days in computerized registries.

8. Summary of Typical Total Costs (Example: Property sold for ₱10,000,000 with zonal value ₱12,000,000)

Item	Base Amount	Rate	Amount	Paid By
Capital Gains Tax	₱12,000,000	6%	₱720,000	Seller
Documentary Stamp Tax	₱12,000,000	1.5%	₱180,000	Buyer
Local Transfer Tax (0.75%)	₱12,000,000	0.75%	₱90,000	Buyer
Registration & LRA Fees	₱12,000,000	~0.25%	₱30,000–₱40,000	Buyer
Notarial & Misc.	—	—	₱10,000–₱20,000	Buyer
Broker’s Commission (5%)	₱10,000,000	5%	₱500,000	Seller
Total taxes & fees			≈ ₱1,530,000–₱1,550,000
Effective rate			≈ 12.8–15.5% of declared price

The costs of transferring real property title in the Philippines are substantial and must be carefully budgeted. Proper tax planning, accurate declaration of consideration, and engagement of competent brokers, lawyers, or tax consultants can minimize delays and deficiency assessments. Always verify current zonal values, LGU ordinances, and LRA fee schedules, as these are subject to periodic adjustment.