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Property taxes and fees in Davao City can add up to significant costs for buyers and owners.
Understanding these charges upfront helps you budget properly and avoid surprises during property transactions, whether you're buying residential land, a condominium unit, or commercial property in the Philippines' largest city by land area.
If you want to go deeper, you can check our pack of documents related to the real estate market in the Philippines, based on reliable facts and data, not opinions or rumors.
Property taxes in Davao City include Basic Real Property Tax at 1% of assessed value, Special Education Fund levy at 1%, transfer taxes at 0.5%, Capital Gains Tax at 6%, and Documentary Stamp Tax at 1.5% of property value.
Annual carrying costs for a typical residential property valued at ₱600,000 with 4% assessment level would be approximately ₱480 per year, payable quarterly on March 31, June 30, September 30, and December 31.
| Tax/Fee Type | Rate | Calculated On | Example Cost (₱600,000 property) |
|---|---|---|---|
| Assessment Level (Residential) | 4% | Fair Market Value | ₱24,000 assessed value |
| Basic Real Property Tax | 1% | Assessed Value | ₱240 annually |
| Special Education Fund | 1% | Assessed Value | ₱240 annually |
| Capital Gains Tax (Seller) | 6% | Higher of selling price/zonal value | ₱36,000 |
| Documentary Stamp Tax | 1.5% | Higher of selling price/zonal value | ₱9,000 |
| Transfer Tax (Local) | 0.5% | Higher of selling price/zonal value | ₱3,000 |
| Registry of Deeds Fees | Fixed | LRA Schedule | ₱800-₱2,000 |
What property details determine your tax calculations in Davao City?
Your property's tax calculation starts with its exact classification and valuation in Davao City's assessment system.
The location (specific barangay), lot area, floor area, and property type (residential, commercial, industrial, or agricultural) all influence your tax burden. As of September 2025, a typical residential property example would be a 150-square-meter lot with an 80-square-meter house in an average subdivision.
The BIR zonal value for land in Davao City averages ₱4,000 per square meter in standard residential areas, making the total land value ₱600,000 for our example property. The building value gets declared separately based on construction costs or seller's declared value.
You must use the higher value between the BIR zonal value and the actual selling price for all tax calculations. Properties in prime barangays like Poblacion District or Lanang will have significantly higher zonal values, sometimes reaching ₱8,000-₱12,000 per square meter.
The City Assessor's Office maintains detailed records of fair market values for each barangay, which get updated every three years according to national guidelines.
How does Davao City calculate your property's assessed value?
Davao City applies different assessment levels based on your property classification, directly affecting your annual tax burden.
Residential properties get assessed at 4% of fair market value, while agricultural land faces 9.5%, commercial properties 11.75%, and industrial properties 15%. These rates changed in 2019 after the City Council approved amendments to the Real Property Tax Code.
For our ₱600,000 residential land example, the assessed value becomes ₱600,000 × 4% = ₱24,000. This assessed value forms the basis for calculating your Basic Real Property Tax and Special Education Fund levy.
The assessment level increases significantly for non-residential properties to generate higher revenue for city development projects. Commercial lots in business districts like downtown Davao face much higher effective tax rates due to the 11.75% assessment level.
You can appeal your property assessment if you believe it's incorrect by filing a petition with the Local Board of Assessment Appeals within 60 days of receiving your tax declaration.
What is your annual Basic Real Property Tax in Davao City?
The Basic Real Property Tax rate in Davao City stands at 1% of your property's assessed value annually.
Using our residential property example with ₱24,000 assessed value, your annual Basic Real Property Tax equals ₱24,000 × 1% = ₱240 per year. This relatively low rate makes Davao City attractive compared to Metro Manila areas where rates can reach 2-3%.
The city offers quarterly payment options with due dates on March 31, June 30, September 30, and December 31 each year. You can pay the full annual amount early to potentially qualify for discounts offered by the City Treasurer's Office.
Commercial properties face the same 1% rate but on much higher assessed values due to their 11.75% assessment level. A ₱600,000 commercial property would have an assessed value of ₱70,500 and annual tax of ₱705.
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How much is the Special Education Fund levy on your property?
The Special Education Fund (SEF) levy adds exactly 1% of your assessed value to your annual property tax bill.
| Property Type | Assessment Level | Example Value | Assessed Value | Annual SEF |
|---|---|---|---|---|
| Residential | 4% | ₱600,000 | ₱24,000 | ₱240 |
| Commercial | 11.75% | ₱600,000 | ₱70,500 | ₱705 |
| Industrial | 15% | ₱600,000 | ₱90,000 | ₱900 |
| Agricultural | 9.5% | ₱600,000 | ₱57,000 | ₱570 |
For our residential property example, the SEF levy equals ₱24,000 × 1% = ₱240 annually. This fund directly supports public education infrastructure and programs in Davao City, making it a mandatory contribution for all property owners.
You pay the SEF levy together with your Basic Real Property Tax using the same quarterly schedule. The combined total for basic residential properties typically ranges from ₱400-₱600 annually depending on property values.
The SEF collection helps fund school buildings, equipment, and educational materials across Davao City's public school system, which serves over 300,000 students in the metro area.
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What other local levies might apply to your Davao City property?
Beyond basic property tax and SEF, Davao City may impose additional levies depending on your property's condition and usage.
Idle land tax applies to vacant, unused residential lots at up to 5% of assessed value annually, but only affects undeveloped properties without structures. Special assessments for public improvements like road widening or drainage projects can add variable costs based on specific city ordinances.
Penalty interest accrues at 2% per month (up to 36 months maximum) on delinquent payments, making prompt payment crucial for cost control. The city also imposes graduated penalties starting at 2% for the first month and increasing monthly.
Properties located in special economic zones or tourist areas may face additional development fees or environmental charges. Waterfront properties in Davao Gulf areas sometimes encounter coastal zone management fees.
You should check with the City Treasurer's Office for any special assessments affecting your specific barangay, as these can vary significantly across Davao City's 182 barangays.
What discounts and penalties apply to Davao City property taxes?
Davao City typically offers a 10% early payment discount for property owners who pay their full annual tax before the first quarterly deadline.
To qualify for the discount, you must pay the complete annual amount (Basic RPT + SEF + any special levies) before March 31 of each tax year. This can save ₱48 annually on our ₱480 example property tax bill.
Late payment penalties start at 2% interest per month on the unpaid balance, compounding monthly up to a maximum of 36 months. A property owner who delays payment by six months would face 12% penalty interest on top of the original tax amount.
The quarterly payment system helps property owners manage cash flow, with payments of ₱120 each due on March 31, June 30, September 30, and December 31 for our example property.
Senior citizen property owners may qualify for additional discounts under the Senior Citizens Act, though specific implementation varies by barangay and requires proper documentation.
Which tax regime applies when selling property in Davao City?
Property sellers in Davao City face Capital Gains Tax at 6% of the higher value between selling price and BIR zonal value.
For our ₱600,000 property example, the seller pays ₱600,000 × 6% = ₱36,000 in Capital Gains Tax. This applies to all residential property sales by individual sellers, regardless of holding period or profit amount.
Corporate sellers or property dealers follow different rules under the ordinary asset regime, facing regular income tax rates plus possible VAT obligations. Properties classified as dealer inventory get treated as ordinary business income rather than capital gains.
The Capital Gains Tax applies uniformly across the Philippines, but local transfer taxes vary by city. Sellers must file BIR Form 1706 and pay within 30 days of the notarized deed of sale.
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How much is Documentary Stamp Tax on Davao City property sales?
Documentary Stamp Tax (DST) applies at 1.5% of the higher value between selling price and BIR zonal value for all property transfers.
On our ₱600,000 property example, DST equals ₱600,000 × 1.5% = ₱9,000. The buyer typically pays this tax, though purchase agreements can shift the obligation to sellers in "net" deals.
You must pay DST within 5 days of notarizing the deed of sale using BIR Form 2000 or 2000-OT. The tax applies to all property conveyances including sales, donations, and exchanges of real property.
DST rates increased under the TRAIN Law in 2018, doubling from the previous 0.75% rate for property transactions. This represents a significant cost increase for property buyers compared to pre-2018 transactions.
Failure to pay DST on time results in penalties and can prevent property registration at the Registry of Deeds, effectively blocking the title transfer process.
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What is Davao City's local Transfer Tax rate?
Davao City imposes Transfer Tax at 0.5% of the higher value between selling price and fair market value on all property transfers.
For our ₱600,000 property example, Transfer Tax amounts to ₱600,000 × 0.5% = ₱3,000. This local government tax gets paid directly to Davao City's Treasury Office, separate from national BIR taxes.
The 0.5% rate positions Davao City competitively compared to Metro Manila areas where rates can reach 0.75%. This lower rate helps attract property investment to the city while still generating revenue for local development projects.
Transfer Tax payment must accompany other requirements when registering the property transfer at the Registry of Deeds. The city requires a certified true copy of the tax receipt for all property registration procedures.
You can pay Transfer Tax at any authorized collection window in the City Treasury Office or through accredited payment centers across Davao City for added convenience.
What are Registry of Deeds and title issuance fees?
Registry of Deeds fees in Davao City follow the national Land Registration Authority (LRA) schedule with fixed rates for different services.
| Service Type | Base Fee | Additional Fees | Total Range |
|---|---|---|---|
| Entry and Annotation | ₱800 | IT Fee ₱100-₱300 | ₱900-₱1,100 |
| Title Issuance | ₱300-₱500 | Network Fee ₱100-₱300 | ₱400-₱800 |
| Certification Fees | ₱200-₱400 | Rush Fee ₱200-₱500 | ₱400-₱900 |
| Archive Research | ₱500 | Document Retrieval ₱100-₱200 | ₱600-₱700 |
Total Registry of Deeds costs typically range from ₱800-₱2,000 for standard property transfers, depending on complexity and processing speed requirements. Rush processing adds 50-100% to base fees but reduces waiting time from weeks to days.
The Registry of Deeds for Davao City properties operates from the main office on C.M. Recto Street, serving all property registration needs for the entire city. Processing times vary from 2-4 weeks for regular service to 3-5 days for expedited processing.
Additional fees may apply for complex properties involving multiple lots, annotations, or special circumstances requiring extra documentation review and approval.
What city assessor and tax clearance fees should you expect?
The City Assessor's Office charges specific fees for transferring tax declarations and issuing required clearances for property transactions.
Tax Declaration transfer fees range from ₱200-₱500 per property, depending on the complexity and number of documents involved. Properties with multiple lots or structures may face higher fees for each separate tax declaration.
Tax clearance certificates cost ₱50-₱150 per property and confirm that all real property taxes are current and paid in full. Lenders and buyers typically require these clearances before completing property transactions.
Processing time for tax declaration transfers averages 2-4 weeks, though rush processing may be available for additional fees. The City Assessor's Office located at SP Building on San Pedro Street handles all assessment-related transactions.
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What are your total annual carrying costs after purchase?
Your ongoing property ownership costs in Davao City combine Basic Real Property Tax, Special Education Fund levy, and any applicable special assessments.
For our residential property example, annual carrying costs total ₱480 per year (₱240 Basic RPT + ₱240 SEF), equivalent to ₱40 per month. This makes Davao City property ownership highly affordable compared to international standards.
Quarterly payments of ₱120 each are due on March 31, June 30, September 30, and December 31 annually. The low carrying costs make buy-and-hold investment strategies particularly attractive in Davao City's growing real estate market.
Additional costs may include homeowners association dues (₱500-₱2,000 monthly for subdivisions), property management fees (3-8% of rental income), and maintenance reserves for older properties.
Property insurance typically costs 0.1-0.3% of property value annually, while utilities and security services add variable monthly expenses depending on usage and location within the city.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property taxes and fees in Davao City remain affordable compared to other major Philippine cities, with total annual carrying costs typically under ₱500 for residential properties.
Understanding these costs upfront helps property buyers budget accurately and avoid surprises during the transaction process, whether purchasing for investment or personal use.
Sources
- Philippine News Agency - Davao City Council amendments to tax code
- Bureau of Local Government Finance - Davao City Notice
- City Government of Davao - City Assessor's Office
- City Government of Davao - City Treasurer's Office
- 3D Universal - Real Estate Taxes Philippines 2025
- Respicio & Co. - Documentary Stamp Tax Rate 2025
- FileDocsPhil - Capital Gains Tax vs Documentary Stamp Tax
- iFinanceSense - Real Property Tax Philippines