This guide is for individual owners selling a house, lot or condo they hold as a capital asset: a home, an inherited lot or an investment unit that is not part of a business. On a ₱5,000,000 sale where the BIR zonal value is ₱5,400,000, the three transfer taxes come to ₱442,500 in a city: ₱324,000 capital gains tax, ₱81,000 documentary stamp tax and ₱37,500 local transfer tax, before the Registry of Deeds fee.
It is not for real estate developers or dealers. Property held for sale in the ordinary course of business, or used in a business, is an ordinary asset under NIRC Sec. 39(A)(1), and its sale is taxed as regular income with creditable withholding, not under the 6% capital gains tax. If the property came to you through a death, settle the estate tax first; see the property inheritors tax guide.
The three taxes on a property sale
| Tax | Rate | Base | Liable under the law | Deadline | Legal basis |
|---|---|---|---|---|---|
| Capital gains tax (CGT), BIR Form 1706 | 6% final tax | Highest of selling price, BIR zonal value, assessor's fair market value | Seller (buyer withholds it from the price) | Within 30 days following the sale | NIRC Secs. 24(D)(1), 6(E), 51(C)(2) |
| Documentary stamp tax (DST), BIR Form 2000-OT | ₱15 per ₱1,000 or fraction (1.5%) | Higher of the price or fair market value | The persons making, signing or transferring the deed | Within 5 days after the close of the month the deed was signed | NIRC Secs. 196, 173; RR 6-2001 via RMC 67-2024 |
| Local transfer tax | Up to 0.5% (province); up to 0.75% (city or Metro Manila municipality) | Total consideration, or fair market value if the consideration is not substantial, whichever is higher | Seller | Within 60 days from execution of the deed | Local Government Code Secs. 135, 144, 151 |
These rates apply to sales in 2026. The 6% CGT is in the NIRC of 1997, in force since January 1, 1998. The ₱15 per ₱1,000 DST rate comes from TRAIN, in force since January 1, 2018. The transfer tax ceilings come from the Local Government Code of 1991.
Capital gains tax: 6% of the highest value
NIRC Sec. 24(D)(1) imposes "a final tax of six percent (6%) based on the gross selling price or current fair market value as determined in accordance with Section 6(E) of this Code, whichever is higher". Sec. 6(E) sets fair market value as the higher of the Commissioner's value (the BIR zonal value) and the provincial or city assessor's schedule of values. The CMEPA (RA 12214) moved this rule to Sec. 24(B)(4) without changing the rate.
The tax is on a presumed gain. Your actual profit does not matter, so a sale at a loss still pays 6% of the highest value.
Under the BIR Form 1706 guidelines, the return is "filed jointly" by buyer and seller, and "the Buyer/Transferee shall withhold from the seller and shall deduct from the agreed selling price" the 6% tax. It is "filed and paid within thirty (30) days following the sale" with an authorized agent bank of the Revenue District Office where the property is located. The 30-day period is in NIRC Sec. 51(C)(2), restated by CMEPA.
Documentary stamp tax on the deed of sale
NIRC Sec. 196, as amended by TRAIN, charges ₱15 for the first ₱1,000 and ₱15 "for each additional One thousand pesos (₱1,000), or fractional part thereof", based on the consideration or the Sec. 6(E) fair market value, whichever is higher. Round the base up to the next ₱1,000 before multiplying. Compute it with the documentary stamp tax calculator.
Sec. 173 makes the tax payable by "the person making, signing, issuing, accepting, or transferring" the document, so either party can be liable. The DST return for a property sale is BIR Form 2000-OT. The Ease of Paying Taxes Act wrote a 10-day period into Sec. 200(B), but RMC 67-2024 confirms that RR 6-2001 still applies: the return is filed "within FIVE (5) DAYS after the close of the month when the taxable document was made, signed, accepted, or transferred". A deed signed on 12 March is due by 5 April.
Local transfer tax
Local Government Code Sec. 135 lets a province tax the transfer of real property "at the rate of not more than fifty percent (50%) of the one percent (1%) of the total consideration", or of the fair market value when the consideration is not substantial, whichever is higher. Cities may exceed provincial rates by up to 50% (Sec. 151), and so may Metro Manila municipalities (Sec. 144). That gives ceilings of 0.5% and 0.75%. Your LGU's revenue code sets the actual rate within the ceiling.
Sec. 135 says "It shall be the duty of the seller, donor, transferor, executor or administrator to pay the tax herein imposed within sixty (60) days from the date of the execution of the deed". The Register of Deeds must see proof of payment before registering the deed. Under LGC Sec. 209(b), it also needs a certificate that all real property tax on the property is paid, so settle any unpaid amilyar first (estimate it with the real property tax calculator).
Worked example: a ₱5,000,000 city sale
Inputs: selling price ₱5,000,000; BIR zonal value ₱5,400,000; assessor's fair market value ₱3,900,000; property in a city with a 0.75% transfer tax.
- Tax base for CGT and DST: highest of ₱5,000,000, ₱5,400,000 and ₱3,900,000 = ₱5,400,000.
- CGT: ₱5,400,000 × 6% = ₱324,000.
- DST: ₱5,400,000 ÷ ₱1,000 = 5,400 units × ₱15 = ₱81,000.
- Transfer tax: ₱5,000,000 consideration × 0.75% = ₱37,500. In a province at 0.5% it would be ₱25,000.
- Total: ₱324,000 + ₱81,000 + ₱37,500 = ₱442,500, or 8.85% of the price, plus the Registry of Deeds registration fee.
The deed can say who shoulders each amount. Whoever pays, the BIR computes on the ₱5,400,000 zonal value, not the ₱5,000,000 price. Check the CGT figure in the capital gains tax calculator; the capital gains tax explainer covers shares and other assets.
Selling your home: the principal residence exemption
NIRC Sec. 24(D)(2) exempts the sale of a principal residence by a natural person when the proceeds are "fully utilized in acquiring or constructing a new principal residence within eighteen (18) calendar months from the date of sale". The conditions in the same section:
- Notify the BIR "within thirty (30) days from the date of sale" through the prescribed return.
- The exemption "can only be availed of once every ten (10) years".
- The cost basis of the old home carries over to the new one.
Under the Form 1706 guidelines, you still file the CGT return and the tax "shall be deposited in escrow" under RR 13-99. If you reinvest only part of the proceeds, the law taxes a proportion: the higher of price or fair market value, times the unused amount over the selling price. In the example above, reinvesting ₱4,000,000 of the ₱5,000,000 leaves ₱1,000,000 unused: ₱5,400,000 × (₱1,000,000 ÷ ₱5,000,000) = ₱1,080,000 taxable, so CGT is ₱64,800.
What you need before you file
The BIR lists these mandatory documents for the electronic Certificate Authorizing Registration (eCAR) in the Form 1706 guidelines:
- TINs of the seller and the buyer
- The notarized Deed of Absolute Sale
- Certified true copies of the tax declaration for land and improvement, at or nearest the date of sale
- A certified true copy of the title (OCT, TCT or CCT)
- A special power of attorney if someone signs for a party
- A Certificate or Sworn Declaration of No Improvement, if the lot is bare
- Proof of payment and the validated returns
The eCAR matters because NIRC Sec. 58(E) bars the Register of Deeds from registering any transfer of real property until the BIR "has certified that such transfer has been reported, and the capital gains or creditable withholding tax, if any, has been paid".
Late payment costs
A late CGT return draws a 25% surcharge under NIRC Sec. 248 (50% for willful neglect or a fraudulent return), interest at double the legal rate, which is 12% a year under Sec. 249 as amended by TRAIN, and a compromise penalty. On the ₱324,000 CGT above, the surcharge alone is ₱81,000. These penalties are listed in the Form 1706 guidelines.
The most common cause is computing tax on the contract price when the zonal value is higher. The BIR recomputes on the higher value and charges the difference with penalties. Look up the zonal value for your property's location before signing the deed.
Step by step
Sign and notarize the deed. Pay the CGT within 30 days and file Form 2000-OT for the DST by the 5th of the following month, both at an authorized agent bank under the RDO where the property sits. Submit the documents above to get the eCAR. Pay the transfer tax at the provincial or city treasurer within 60 days. Then present the eCAR, the transfer tax receipt and the real property tax clearance to the Register of Deeds to issue the new title. Buyers can read the other side in taxes when buying property, and sellers in business should see the real estate sellers tax guide.
Sources
- National Internal Revenue Code of 1997 (RA 8424), Secs. 6(E), 24(D), 39(A)(1), 51(C)(2), 58(E), 173 (Lawphil)
- RA 10963 (TRAIN), Sec. 196 DST on deeds of sale (Lawphil)
- RA 12214 (CMEPA), Sec. 51(C)(2)(b) as amended (Lawphil)
- Local Government Code (RA 7160), Secs. 135, 144, 151, 209 (Lawphil)
- Guidelines and Instructions for BIR Form No. 1706 (Bureau of Internal Revenue)
- RMC No. 67-2024, deadline for DST returns (Bureau of Internal Revenue)
- RMC No. 31-2025, BIR Form 2000-OT for DST on sale of real property (Bureau of Internal Revenue)