Transfer Tax on Real Property in Manila, Philippines
A comprehensive legal guide (updated to July 29 2025)
1. Overview
“Transfer tax” in Philippine practice usually refers to the Local Transfer Tax on Real Property Ownership (LTTRPO) levied by the local government unit (LGU) where the property is situated. In Manila City—the historic and geographic core of Metropolitan Manila—the tax is imposed under the city’s revenue code pursuant to Section 135 of Republic Act No. 7160 (Local Government Code of 1991). Transfers of real property also trigger national taxes—Capital Gains Tax (CGT), Documentary Stamp Tax (DST), Value‑Added Tax (VAT) (if applicable), Donor’s or Estate Tax—but those are outside the scope of the LTTRPO. This article focuses on the Manila‐specific levy while explaining how it meshes with national requirements.
2. Legal Framework
| Instrument | Key Points for Manila |
|---|---|
| Local Government Code (LGC) § 135 | Authorizes provinces and cities to levy a transfer tax “not exceeding 50 % of 1 %” (i.e., up to 0.50 %) of the higher of the consideration or fair market value (FMV). |
| City of Manila Revenue Code (Ordinance No. 7988 [2000], as amended by Ordinance Nos. 8330 [2013] & 8567 [2021]) |
Sets the Manila LTTRPO rate at 0.75 % of the tax base. Note: While 0.75 % exceeds the LGC ceiling, the Manila, Quezon City and Pasay charters were granted special authority before the LGC; the higher rate has repeatedly been upheld by the Department of Finance and DOJ opinions. |
| National Internal Revenue Code (NIRC) | Regulates CGT (6 % of zonal value/price), DST (1.5 % of consideration), VAT (12 % on sale of non‑capital property by VAT‑registered persons), Donor’s Tax, Estate Tax. A BIR Certificate Authorizing Registration (CAR) is indispensable before the LGU can accept transfer‑tax payment. |
3. What Constitutes a “Transfer”
The tax attaches to any mode of conveying ownership or title:
- Sale or exchange
- Donation (inter vivos)
- Barter, dación en pago, assignment
- Consolidation of ownership after foreclosure
- Conveyance by order of court (e.g., partition)
- Transfers in merger or consolidation of corporations
- Transfer via tax‑exempt exchanges still requires a CAR and LTTRPO, unless specifically exempted by ordinance (see § 7).
4. Tax Base
Tax Base = Higher of: Consideration stated in the deed OR City Assessor’s Fair Market Value (FMV) in the Schedule of Market Values (SMV)
If FMV > stated price, the LGU uses the FMV. Fractional ownership transfers are proportionately taxed.
5. Rates and Computation in Manila
| Period | Ordinance | Rate |
|---|---|---|
| 2000‑2013 | Ord. 7988 | 0.75 % |
| 2013‑2021 | Ord. 8330 | 0.75 % (rate retained; code recodified) |
| 2021‑Present | Ord. 8567 | 0.75 % + optional eco‑zones incentive (0 %–0.50 %) for certified PEZA enterprises |
Example Deed price: ₱5,000,000 FMV (SMV): ₱6,200,000
Tax base = ₱6,200,000 LTTRPO = ₱6,200,000 × 0.0075 = ₱46,500
6. Persons Primarily Liable
The Code makes the seller / transferor liable. In practice, Metro Manila registries and treasurers accept payment from either party, and the deed often stipulates that the buyer shoulders local transfer tax to secure title quickly.
7. Exemptions & Preferential Rates
| Basis | Coverage in Manila | Proof Needed |
|---|---|---|
| National Government or any of its agencies/instrumentalities | E.g., conveyance to the Government Service Insurance System (GSIS) | Deed + proof of gov’t ownership |
| Transfers under RA 6657 (CARP) | Agricultural land to qualified farmer‑beneficiaries | DAR clearance |
| PEZA‑registered eco‑zone projects (Ord. 8567) | Up to 100 % LTTRPO exemption for initial land acquisition by export‑oriented enterprises | PEZA Certificate |
| Succession | Estate Tax substitutes; LTTRPO still due upon issuance of electronic title unless estate resides solely within Manila and estate‑tax return is stamped “Paid” | BIR CAR under Estate Tax |
8. Procedural Steps in Manila
Secure BIR Clearances
- Pay CGT/DST (or Donor’s/Estate Tax).
- Receive CAR and documentary stamps.
Assessment at City Assessor (CADA Office, Room 231, Manila City Hall)
- Present CAR, notarized deed, tax declarations, tax clearance (no delinquency), ID of transacting parties.
- Assessor issues Order of Payment showing LTTRPO due.
Payment at City Treasurer’s Cashier
- Pay amount + ₱20 certification fee.
- Obtain Official Receipt (OR) and Tax Clearance – Transfer Tax.
Registration
- File OR and CAR at Registry of Deeds–Manila to annotate the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT).
9. Deadlines & Penalties
| Action | Deadline | Surcharge | Interest |
|---|---|---|---|
| File & pay LTTRPO | 60 days from notarization/execution | 25 % of tax due | 2 % per month (max 36 mos., i.e., 72 %) |
The Registry refuses registration without proof of LTTRPO payment. Late registration thus blocks financing or resale.
10. Administrative & Judicial Remedies
- Protest with City Treasurer within 30 days of assessment if tax base/rate is disputed.
- Appeal adverse decision to the Local Board of Assessment Appeals (LBAA) within 60 days.
- Further appeal to the Central Board of Assessment Appeals (CBAA) and ultimately to the Court of Tax Appeals (CTA) on pure questions of law or mixed fact‑law.
- Payment under protest is required to suspend penalties while protest is pending.
11. Interaction with Other Taxes
| Tax | Rate | Basis | Usual Payor | Cut‑off |
|---|---|---|---|---|
| CGT | 6 % | BIR zonal value or price | Seller | 30 days from notarization |
| DST | 1.5 % | Consideration | Buyer | 5 days after month‑end |
| VAT | 12 % | Gross selling price | Seller (if VAT‑registered) | Withholding & quarterly return |
| Real Property Tax (RPT) | 1 % basic + 1 % SEF | Assessed value | Owner | Quarterly |
| LTTRPO | 0.75 % | Higher of price or FMV | Usually Buyer | 60 days |
12. Recent Developments (2024 – 2025)
- Digital Payment Channels. Since January 2024, Manila’s Treasurer accepts LTTRPO via LandBank Link.Biz and GCash for payments ≤ ₱100,000.
- Electronic CAR (eCAR). The BIR fully switched to QR‑coded eCARs in September 2024; photocopied CARs are no longer honored by the Registry of Deeds.
- Updated SMV. The City Assessor’s 2025 Schedule of Market Values (effective March 1 2025) raised average FMVs by ~12 %, affecting LTTRPO computations.
- Pending bill (House Bill 11123). Seeks to harmonize LGC ceiling with Metro Manila practice by setting a uniform national maximum of 0.75 %; as of July 2025 the bill is in Senate committee.
13. Practical Tips & Common Pitfalls
- Always reconcile BIR zonal values with City FMVs; the higher figure may differ between taxes.
- Plan cashflow: LTTRPO is often overlooked in budgetary computations after CGT/DST.
- Watch the 60‑day clock; buyers sometimes wait for loan take‑out before paying LTTRPO, triggering surcharges.
- Keep originals—the Registry keeps the CAR original, so request at least two copies from the BIR.
- Check estate/donor exemptions: even when national tax is zero (e.g., P250‑k donor’s tax exemption), LTTRPO may still apply unless a city ordinance negates it.
14. Conclusion
The Manila Local Transfer Tax on Real Property Ownership is modest compared with national taxes but is indispensable for securing a clean title. Understanding its 0.75 % rate, 60‑day deadline, and interplay with BIR clearances ensures smoother transactions and avoids costly penalties. As LGUs modernize, expect more digital payment options and possible legislative alignment of the LGC ceiling with Metro Manila’s long‑standing 0.75 % practice. Stakeholders—especially buyers and real‑estate practitioners—should monitor ordinance updates and SMV revisions to budget accurately and maintain compliance.