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Taxes and Fees: When Buying Real Estate Property in the Philippines
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One of my Japanese clients was looking for a condominium. He wanted to establish his own business here and needed a place to stay. At that time, I only had a little idea about real estate matters, so I consulted my friends who are real estate agents and property developer specialist. They asked me what my client preference was. After our discussion, they recommended me a condominium worth around Three Million Pesos.
However to my surprise, the selling price of Php 3 million didn’t end there. Buying a property in the Philippines requires the seller and the buyer to pay a lot of taxes.
Below I would like to share the standard sharing of expenses between the buyer and the seller when transferring the real estate property title (TCT - Transfer Certificate of Title or CCT - Condominium Certificate of Title) to a new owner or buyer.
Note: The above sharing of expenses is the standard practice in the Philippines. However, buyers and sellers can mutually agree on other terms as long as it is done during the negotiation period (before the signing of the Deed of Sale).
During the registration of the property to the LGU, aside from Registration fee, the new owner must also fee the Business Tax (rate depends on local government unit where property is located if the property is used for business, rate depends on local government unit where property is located) and the Real Property Tax (depend on LGU’s RPT rate and its assessed value).