What Do You Pay Every Year After Buying Property in the Philippines? The Full Cost Map: Transfer, Holding & Selling

The Big Picture: Costs Come in Three Phases

Owning property in the Philippines is not "pay for the unit and you're done." Split along a timeline, the costs fall into three phases, each with different items, payees, and frequencies:

• 1. One-time purchase and transfer costs — incurred at closing: capital gains tax, documentary stamp tax, local transfer tax, registration fees, notarization, broker's commission, and the costs of moving the Condominium Certificate of Title (CCT) into your name.
• 2. Recurring annual holding costs — payable every year as long as the unit is yours: Real Property Tax and the Special Education Fund levy, condominium dues, possible special assessments, and utilities.
• 3. Future selling costs — when you eventually sell, you trigger capital gains or withholding tax, documentary stamp tax, broker fees, and more.

The key insight: many buyers count only the price and transfer fees, and forget that holding costs money every single year. Even if the unit sits vacant, the dues and the property tax still fall due — and under Section 246 of the Local Government Code (RA 7160), real property tax accrues on 1 January each year and from that date constitutes a lien on the property superior to any other lien, mortgage or encumbrance of any kind, extinguished only by payment. Arrears are not something you can leave until later; they follow the unit. For what foreigners can buy and the ownership caps, start with our guide on foreigners buying property in the Philippines.

Phase One: One-Time Purchase and Transfer Costs, With the Statutory Rates

At closing, beyond the price itself, a string of one-time taxes and fees settle together. Each item below carries its statutory rate and legal basis. Actual amounts still depend on case-by-case computation and the rules in force, but the rates themselves are written into law and you can budget from them.

• Capital Gains Tax (CGT): 6%. Under Section 24(D)(1) of the National Internal Revenue Code, an individual selling real property located in the Philippines and held as a capital asset pays a final tax of 6% on the gross selling price or the current fair market value, whichever is higher. ⚠️ What "fair market value" means here changed in 2024, and this is the most widely repeated error online. The provision as written keys to Section 6(E) — the Commissioner's authority to fix zonal values — but RA 12001 Section 38 expressly repealed Section 6(E) and amended Section 24(D) insofar as inconsistent. Under RA 12001 Section 18(a)(3), the Commissioner "shall use the SMV or the actual gross selling price ... whichever is higher, in computing any internal revenue tax". Zonal values survive only transitionally — Section 31 keeps existing schedules in force until replaced, within 2 years of effectivity, and Section 29 allows the higher of existing SMVs, zonal values or the actual price where an SMV is not yet available. Practical effect: any guide still saying "the higher of price or BIR zonal value" is citing a repealed provision; the real question is how far your LGU has got with its Schedule of Market Values. CGT is customarily borne by the seller. One relief that gets overlooked: Section 24(D)(2) exempts the sale of a principal residence where the proceeds are fully used to acquire or build a new principal residence within 18 months, provided the BIR is notified within 30 days of the sale and the historical cost carries over — and it can be used only once every 10 years. If the property is held as an ordinary asset — a developer's inventory, or a unit run as a rental business — CGT does not apply at all; you are in expanded withholding tax plus regular income tax territory, a materially different structure (see how expanded withholding tax works).
• Documentary Stamp Tax (DST): 1.5%. Under Section 196 of the Tax Code, as further amended by Section 69 of the TRAIN Law (RA 10963, 2017), deeds of sale, conveyances and donations of real property are taxed at P15.00 for each P1,000 of consideration (and P15.00 for each additional P1,000 or fractional part), which works out to about 1.5% — again on the consideration or the fair market value, whichever is higher (the same base as CGT, so the correction above about the repeal of Section 6(E) and the shift to the SMV applies to DST equally). Where one party is the Government, the tax is based on the actual consideration. Customarily borne by the buyer — though Section 173 places liability on "the person making, signing, issuing, accepting, or transferring" the document, meaning either party, with the non-exempt party directly liable where the other is exempt. So who pays is largely a matter of contract. Note also that TRAIN changed the wording of Section 196 (adding donations and the government-consideration proviso), not the rate — P15 per P1,000 is identical to the 1997 original. TRAIN did double many other stamp taxes, which is where the confusion comes from.
• Local Transfer Tax: up to 0.5% in a province, up to 0.75% in a Metro Manila city. Section 135 of RA 7160 lets a province tax the sale, donation, barter or any other mode of transferring ownership of real property at a rate of not more than 50% of 1% — that is 0.5% — of the total consideration, or of the fair market value where the consideration is not substantial, whichever is higher. Section 151 then allows a city to exceed the provincial maximum by not more than 50%, which puts Metro Manila cities at a ceiling of 75% of 1%, or 0.75%. Here is a point most guides get backwards: Section 135(b) states that "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 or from the date of the decedent's death." The statutory liability sits on the seller's side, not the buyer's. Market practice frequently shifts it to the buyer by contract — but that is agreement, not law, so negotiate it explicitly rather than assuming. The same section requires the Register of Deeds to see proof of payment before registering any deed, and notaries public to furnish the treasurer a copy of the deed within 30 days of notarization.
• Registration Fee: about 0.5%, not the 1% widely quoted online. The basis is Section 111 of PD 1529, the Property Registration Decree, with fees graduated on the value of the consideration; the operative schedule is LRA Circular No. 11-2002, and LRA Circular No. 06-2025 of October 2025 confirms that the basis for computing registration fees has not been amended, so it still governs. The top of the schedule reads: above P1,700,000, a fee of P8,796 plus P90 for every P20,000 (or fraction) in excess. That works out to roughly P23,646 on a P5,000,000 sale (0.47%) and P46,146 on P10,000,000 (0.46%) — mildly regressive, with the percentage falling as the price rises. Add entry, IT and annotation fees plus a 1% legal research surcharge computed on the fee, not on the price, and a P5,000,000 purchase lands near 0.49%, a P10,000,000 one near 0.47%. The "1% registration fee" claim is exactly that legal research surcharge, mistakenly applied to the purchase price instead of to the fee. Usually borne by the buyer; take the current figures from the registry.
• Notarization — negotiated as a percentage of the price, with no single statutory rate. Usually borne by the buyer.
• Broker's commission — usually paid by the seller when a broker is involved, though this can be agreed otherwise (on checking credentials see how to verify a Philippine real estate broker's licence).
• VAT: 12%, with a P3,600,000 residential exemption threshold. Buying new from a developer carries a different structure. Under Section 109(P) of the Tax Code as amended by TRAIN, from 1 January 2021 the residential VAT exemption survives only for socialized housing and for house and lot and other residential dwellings priced at or below the statutory threshold, with the same provision requiring that the threshold be adjusted every 3 years to present value using the Consumer Price Index. BIR Revenue Regulations No. 1-2024, issued 10 January 2024, did exactly that: it raised the threshold from P3,199,200 to P3,600,000, effective 1 January 2024, with the next adjustment due on the 3-year cycle. Above the threshold, a developer sale attracts 12% VAT. And note an exemption that has disappeared: before TRAIN, a residential lot priced at P1,500,000 or below had its own VAT exemption. That was removed from 1 January 2021 — only the house-and-lot / residential-dwelling bracket remains. Verify the current threshold before you buy new.

Two reminders. First, "who pays" is two different questions in law and in contract: where a statutory payer is named above (CGT and local transfer tax both sit on the seller's side), the contract can reallocate it — but know what you are reallocating. Second, do not confuse the three "whichever is higher" bases. CGT and DST run on the selling price versus fair market value (BIR zonal value / the assessor's FMV), whichever is higher. The Real Property Tax in the next section runs on assessed value, which is the fair market value multiplied by an assessment level — a fraction of it. Treating those as the same number will overstate your holding cost several times over. For the full path of getting the title into your name — from paying at the BIR for the eCAR to a new title from the Registry of Deeds — see our condo turnover-to-title-transfer guide. Yixing also offers a transfer and tax coordination service to bridge that legwork.

Core Holding Cost 1: Real Property Tax — 1% and 2% Ceilings, Plus 1% for the SEF

The holding cost buyers most often overlook, yet cannot escape, is the Real Property Tax (RPT), locally known as amilyar. Under Section 232 of RA 7160 it is levied by the province, the city, or a municipality within Metro Manila where the property sits, on land, buildings, machinery and other improvements, and it is computed on assessed value.

Four statutory rates — learn these and you can estimate for yourself:

• Basic real property tax: not exceeding 1% for a province, not exceeding 2% for a city or a Metro Manila municipality (Sec. 233), on assessed value.
• Special Education Fund: an annual 1% of assessed value (Sec. 235), in addition to the basic tax, accruing exclusively to the SEF. So the ceiling on annual property tax in Metro Manila is 3% of assessed value (2% + 1%).
• Idle land tax: not exceeding 5% of assessed value (Sec. 236), also on top. Section 237 defines idle land as agricultural land over 1 hectare with half of it uncultivated (land with at least 50 permanent or perennial crop trees per hectare, or used for grazing, is excluded), and non-agricultural land in a city or municipality over 1,000 square metres with half unutilized. Residential lots in approved subdivisions already transferred to individual owners are covered regardless of area.
• Special levy for public works: not exceeding 60% of the actual project cost (Sec. 240), apportioned among lands specially benefited. This is not the same thing as a condominium "special assessment" in the next section.

How assessed value is derived: fair market value × assessment level. Section 199(h) defines it precisely — "assessed value is the fair market value of the real property multiplied by the assessment level" — so your tax base is a fraction of market value, not market value. Section 218 caps the assessment levels, and each local council fixes its own by ordinance within those caps: on land — residential 20%, agricultural 40%, commercial, industrial and mineral 50%, timberland 20%; on residential buildings and improvements, a 9-bracket schedule graduated by fair market value — 0% up to P175,000, then 10% to P300,000, 20% to P500,000, 25% to P750,000, 30% to P1,000,000, 35% to P2,000,000, 40% to P5,000,000, 50% to P10,000,000, and 60% above P10,000,000; commercial and industrial buildings run on their own brackets from 30% up to 80%; and machinery at 40% agricultural, 50% residential, 80% commercial and 80% industrial. Cultural, scientific and hospital uses, local water districts and water or power GOCCs sit at a reduced 10% to 15%.

Work it through once and the order of magnitude becomes clear. Take a Metro Manila residential unit with a fair market value of P5,000,000, landing in the P2,000,000-to-P5,000,000 residential bracket at a 40% assessment level: assessed value is P2,000,000. At the statutory ceilings, basic tax at 2% is P40,000 and the SEF at 1% is P20,000, for P60,000 a year. That is a ceiling, not a bill. Your actual figure turns on three things: the rate the city ordinance actually sets (it may be below the cap), the assessment level the ordinance sets (likewise), and the fair market value the assessor has on file (which need not match your purchase price). The right move is to pull the property's tax declaration from the city assessor's office and read the real numbers, rather than frightening yourself with the ceiling.

When to pay, the discount for paying early, and the penalty for paying late — all three are statutory:

• Payable in 4 equal instalments without interest (Sec. 250), due on or before 31 March, 30 June, 30 September and 31 December. The same section adds a line that matters when you buy second-hand: payments are applied first to prior years' delinquencies, interests and penalties, and only once those are settled do they count toward the current period.
• Advance payment earns a discount of up to 20% (Sec. 251): where the basic tax and the SEF are paid in advance in accordance with the Section 250 schedule, the local council may grant a discount not exceeding 20% of the annual tax due. "Not exceeding" means it varies — some LGUs give the full 20%, others far less. Ask locally.
• Late payment costs 2% per month, capped at 36 months (Sec. 255): unpaid tax accrues interest at 2% per month on the unpaid amount until fully paid, provided the total interest shall not exceed 36 months — so penalties top out at 72% of the tax. The cap is not an amnesty: prolonged delinquency can still lead to administrative foreclosure and public auction, and as noted the tax is a superior lien that runs with the property.
• Disputing the assessment (Sec. 252): you must pay first. The receipt is annotated "paid under protest", a written protest is filed with the treasurer within 30 days of payment, and the treasurer must decide within 60 days of receipt.

Two common misconceptions worth correcting. First, there is no general RPT exemption for owner-occupiers or senior citizens. Section 234 exempts government property; charitable institutions, churches, mosques, non-profit cemeteries and land actually and exclusively used for religious, charitable or educational purposes; machinery of local water districts and water or power GOCCs; registered cooperatives; and pollution-control and environmental-protection equipment — and it expressly withdraws exemptions previously granted to anyone else. The "P175,000 exemption" repeated online is really the 0% assessment level bracket for residential buildings in Section 218: it zeroes out the building portion only, while the land is still assessed and taxed. Different mechanism entirely. Second, RPT and condo dues are not the same payment — RPT goes to the government, dues go to the association, and RPT is owed whether the unit is vacant, rented, or owner-occupied. Actual rates, assessment levels and discounts follow the ordinance in force where the property sits.

RA 12001 (2024): Valuations Get Redone, and There Was a Penalty Amnesty

If you hold a unit with several years of unpaid RPT, or are about to take over a second-hand unit that does, read this section carefully.

RA 12001, the Real Property Valuation and Assessment Reform Act, was approved on 13 June 2024, aiming to harmonise the wildly inconsistent, often decades-stale valuation practices across the country. Two consequences reach ordinary owners:

• Schedules of Market Values must be redone on a cycle. The Act requires provincial, municipal and city assessors to prepare the Schedule of Market Values (SMV), complete the first update within 12 months of notice, and thereafter update the SMV and conduct a general revision of assessments and classifications every 3 years — the same 3-year rhythm RA 7160 Section 219 already prescribed for general revisions. The practical meaning: many localities have been running on long-outdated market values, and a redone schedule will usually push your bill up, most sharply in cities that have not revised in a decade or more. Leave headroom in a long-term holding budget. But the legislature built in a brake that almost nobody reports: Section 29 caps the increase in the first year of an approved SMV at 6% of the real property taxes assessed on the property before the Act took effect — and that 6% ceiling applies separately to basic RPT, the SEF levy, idle land tax and special levies. A revaluation cannot double your bill in year one. The Department of Finance made the same point officially on 11 July 2026: "RPVARA does not mean an increase in real property tax... The authority to determine assessment levels and tax rates remains exactly where it has always been, which is with local governments."
• There was a 2-year amnesty on penalties and interest. Section 30 of the Act granted an amnesty covering penalties, surcharges and interests on all unpaid real property taxes — including the Special Education Fund, idle land tax and other special levies — accruing prior to the effectivity of the Act, available within a period of 2 years after effectivity. The timing is the point: the Act was approved on 13 June 2024 and takes effect 15 days after publication, so that 2-year window ran out around mid-2026. Whether it has now closed, or was extended, is a question for the treasurer of the city or municipality where the property sits — do not infer it from this article. And note the amnesty covered only penalties and interest; the tax itself was never forgiven.

The single most useful thing to do in practice is simple: before buying second-hand, pull the property's RPT payment record and tax declaration at city hall and confirm there are no old arrears with accrued interest. Under Section 246 that is a superior lien running with the property, and it becomes yours on closing. Check the title's encumbrances at the same time — see checking encumbrances and annotations on a title and how to verify a Philippine land title.

Core Holding Cost 2: Condo Dues and Special Assessments (and Why Dues Are VAT-Exempt)

If you bought a condominium, then on top of the RPT paid to the government, there is a payment to the condominium corporation / property manager: the condominium dues. This is one of the most recurring costs of owning a condo.

• How it is computed — usually based on your unit's floor area (rate per square metre × area); the larger the unit, the more you pay.
• How often — typically monthly or quarterly.
• What it covers — security, cleaning, common-area maintenance, elevators, common lighting, amenities like pools and gyms, and day-to-day management.

A statutory point that can save you money: dues are VAT-exempt. Under Section 109(Y) of the Tax Code, added by the TRAIN Law in 2017, "association dues, membership fees, and other assessments and charges collected by homeowners associations and condominium corporations" are VAT-exempt transactions. This exemption was added to the Code by TRAIN specifically; before it was legislated, whether dues attracted 12% VAT had been a long-running dispute, and the statute settled it. The practical upshot: if a line of 12% VAT appears on your association billing, that provision is what you cite when you query it. (It exempts the dues from VAT; it does not relieve the association of its other tax obligations, which follow current BIR regulations.) How dues and parking charges are typically billed is covered in condominium dues and parking fees explained.

Is there a legal cap on dues? No — but the law gives you three usable levers. Under Section 9(d) of RA 4726, the Condominium Act of 1966, the enabling instrument must provide for "reasonable assessments" to meet authorized expenditures, with each unit assessed "in proportion (unless otherwise provided) to its owner's fractional interest in any common areas". That word "reasonable", plus the pro-rata default, is the only statutory limit — no percentage ceiling, and no regulator pre-approves the amount. But Section 9(c) requires the instrument to provide for an independent audit of the management body's accounts, which is the lever a buyer can actually pull, and Section 9(b) requires a majority in interest of owners to amend the restrictions. The provision to remember is Section 20: an assessment made under a duly registered declaration of restrictions is an obligation of the owner and constitutes a lien superior to all liens registered after the notice of assessment — with real property tax liens the sole exception. Unpaid dues are not a minor matter; in the extreme they can cost you the unit. One frequent mix-up worth correcting: RA 9904, the Magna Carta for Homeowners and Homeowners' Associations, does require dues to be approved by a majority of members and the bylaws to spell out how increases are imposed — but Section 3(b) defines "Association" as a homeowners' association of subdivision or village lot and housing unit owners, and it does not cover condominium corporations, which run on RA 4726, the master deed and declaration of restrictions, and the Revised Corporation Code. Applying RA 9904's majority-approval rule to condo dues is a common online error. (Note too that the HLURB named in RA 9904 was reorganized by RA 11201 in 2019, with regulatory functions moving to DHSUD and adjudication to the HSAC, so any source telling you to complain to the HLURB is out of date.)

Beyond regular dues, watch for special assessments: when the building needs a large one-off outlay (facade renovation, elevator replacement, fire-safety or structural upgrades, major repairs), the association may levy an extra charge apportioned among all owners by share. These are irregular and can be sizeable. Do not confuse this with the Section 240 "special levy" in the previous section: that is a tax imposed by the local government on lands specially benefited by public works, capped at 60% of project cost; a condominium special assessment is a charge levied by the association on its members, with a different basis and a different route of challenge.

Important: dues and special assessments are owed even when the unit is vacant. The operating cost of the shared facilities does not drop. Before buying, always ask about the building's current dues (rate per sqm), any recent special assessments, and the health of the reserve fund — these directly determine your annual cost of keeping the unit, and older buildings especially warrant the question. Yixing's settle-in coordination service can assist with this kind of pre-purchase due diligence.

Other holding costs: utilities and renting-out matters

Beyond RPT and dues — the two big items — the holding phase brings some everyday and situational costs:

• Water, electricity, internet — incurred whether you occupy or rent out; electricity in the Philippines is relatively costly, with connection and billing rules covered in the relevant living guides.
• Parking — a separately owned parking slot may carry its own fee or dues.
• Insurance — some owners insure the unit (e.g. fire insurance), depending on need.

If you plan to rent the unit out, add a layer of tax considerations: rental income must be declared and taxed, and in some cases the tenant / platform is involved in withholding tax. Renting also brings the work of finding tenants, contracting, repairs, and rent collection — many overseas landlords delegate to a property manager. The exact rules on rental-income tax, withholding tax, and filing are subject to the BIR's prevailing regulations; seek professional tax advice. Overseas landlords who want a hands-off setup can arrange rental management and tax coordination through Yixing, handing collection, filing, and upkeep to a local team.

Phase Three: Costs When You Sell — 6% and 1.5% Are the Big Ones

Holding isn't the end. When you decide to sell, another set of costs is triggered — often missed when people size up whether a unit "made money":

• Capital Gains Tax: 6%, or withholding tax. Under Section 24(D)(1) of the Tax Code, real property held as a capital asset attracts a final tax of 6% on the gross selling price or fair market value, whichever is higher, and it is typically borne by you as the seller. If the property is an ordinary asset — run as a rental business, or developer inventory — you are instead in expanded withholding tax plus regular income tax, at different rates and on a different filing basis. Establish which category your unit falls into before you list it.
• Documentary Stamp Tax: 1.5% — the deed of sale is taxed at P15.00 per P1,000 under Section 196 on the way out as well.
• Local Transfer Tax: 0.5% to 0.75% — and as noted, the statutory duty to pay sits on the seller's side, within 60 days of executing the deed.
• Broker's commission — usually paid by the seller when a broker handles the sale.
• Transfer-support costs — miscellaneous items when assisting the buyer's transfer, including clearing the RPT and obtaining tax clearance, without which the transfer cannot proceed.

Two structural reminders. First, foreigners may hold condominium units but not land directly, which shapes what you can buy and sell (see the related article on foreigners buying property). Second, estate and donor's taxes run on an entirely separate track, and estate tax is 6% — under Section 84 of the Tax Code as amended by TRAIN, 6% of the value of the net estate, with a standard deduction under Section 86 of P5,000,000 for citizens and residents and P500,000 for non-residents, plus a family home deduction of up to P10,000,000 under Section 86(A)(7), with any excess over P10,000,000 remaining taxable. So a property passing by inheritance is taxed under that regime, not the sale regime, and anything touching succession planning warrants professional tax advice first. The sale process itself is in selling a condo in the Philippines, step by step. Every rate here comes from a provision in force, but the exact base, deductions and filing deadlines follow current BIR regulations and case-by-case computation.

In Practice: Sizing Up Your Holding Budget (a Pre-Purchase Checklist)

Distilling the cost map into a pre-purchase due-diligence checklist, so you can confirm before signing that a unit is not just affordable to buy but affordable to keep:

• Pull the tax declaration — from the city assessor, get the fair market value on file, the assessment level applied and the resulting assessed value, then multiply by the city's actual rate plus the 1% SEF. That is your real annual RPT, not the 3% ceiling.
• Check for old arrears — under Section 246 the tax is a superior lien running with the property, accruing 2% per month up to 36 months, and it becomes yours at closing.
• Ask the dues level — what is the building's rate per sqm, monthly or quarterly? Convert it to an annual figure for your unit. If a 12% VAT line appears on the billing, cite Section 109(Y) and ask.
• Check the special-assessment history — any recent assessments? Is the reserve fund adequate? Ask this especially for older buildings.
• Total the transfer taxes up front — CGT 6% + DST 1.5% + transfer tax 0.5% to 0.75% + registration and notarization, and write into the contract who bears each (remembering that statutory liability and contractual allocation are different things). Buying new from a developer, confirm whether the price crosses the P3,600,000 VAT exemption threshold.
• Factor in a rental scenario — if you will rent it out, fold in rental-income tax, withholding tax, and management fees (on returns, see how to compute condo investment ROI in the Philippines).
• Reserve enough holding budget — sum annual RPT plus SEF, dues, utilities and possible special assessments, and confirm your cash flow covers it long-term including vacant periods — with some headroom for the valuation increases RA 12001 will bring.

In one line: the price is the entry ticket; holding cost is the marathon. Working out all three phases before you buy is far calmer than being chased by bills afterward. This article is a general overview, not tax or investment advice. The rates cited with section numbers come from RA 7160, the Tax Code and RA 12001 as in force, but local governments set their own rates within the statutory ceilings and BIR thresholds and regulations are revised — so specific amounts follow the local ordinance, current BIR rules and professional advice. If you would like help bridging transfer, tax and holding consultation, and rental management, explore Yixing's settle-in coordination service via our official site.