Authored by the expert who managed and guided the team behind the Philippines Property Pack
Yes, the analysis of Manila's property market is included in our pack
If you're exploring the idea of owning property in Manila, understanding the associated taxes and fees is crucial.
What are the costs involved? How do they impact your investment? Are there any hidden charges you should be aware of?
In this article, we'll break down everything you need to know about property taxes and fees in Manila.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Philippines Property Pack
Property Taxes and Fees in Manila
In Manila, property taxes and fees are essential considerations for property owners. Below is a detailed table outlining the various taxes and fees associated with property ownership in Manila, with data between .
| Tax/Fee Type | Description | Rate/Amount |
|---|---|---|
| Real Property Tax (RPT) | An annual tax imposed on real properties such as land, buildings, and improvements. | 1% to 2% of the assessed value |
| Transfer Tax | A tax levied on the transfer of ownership of real property. | 0.5% to 0.75% of the selling price or fair market value, whichever is higher |
| Capital Gains Tax | A tax on the profit from the sale of property or an investment. | 6% of the selling price or fair market value, whichever is higher |
| Documentary Stamp Tax | A tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, right, or property. | 1.5% of the selling price or fair market value, whichever is higher |
| Registration Fee | A fee for the registration of the property with the Registry of Deeds. | Varies based on property value |
| Notarial Fee | A fee for the notarization of documents related to the property transaction. | 1% to 2% of the property value |
| Special Education Fund Tax | An additional tax for the support of public education. | 1% of the assessed value |
| Amilyar | A local term for real property tax, often used interchangeably with RPT. | Included in RPT |
| Business Tax | A tax imposed on properties used for business purposes. | Varies based on business type and revenue |
| Environmental Fee | A fee for environmental management and protection services. | Varies by locality |
| Barangay Clearance Fee | A fee for obtaining clearance from the local barangay for property transactions. | Nominal fee, varies by barangay |
| Building Permit Fee | A fee for obtaining a permit to construct or renovate a building. | Varies based on project size and scope |
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What You Need to Know Before Buying Property in Manila
What is the current property tax rate in Manila?
The property tax rate in Manila is typically set at 2% of the assessed value of the property.
This rate is applicable to both residential and commercial properties within the city limits.
It's important to note that the assessed value is often lower than the market value of the property.
How is the assessed value of a property determined?
The assessed value is determined by the local government based on the property's market value and other factors.
Typically, the assessed value is a percentage of the market value, often around 60% to 80%.
Factors such as location, size, and improvements on the property can influence the assessed value.
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Are there any additional fees when purchasing property in Manila?
Yes, buyers should be aware of additional fees such as documentary stamp tax, transfer tax, and registration fees.
The documentary stamp tax is 1.5% of the selling price, while the transfer tax is usually 0.5% to 0.75% of the selling price.
Registration fees are calculated based on a sliding scale and can vary depending on the property's value.
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What is the documentary stamp tax, and who pays for it?
The documentary stamp tax is a tax imposed on the sale of real estate, calculated at 1.5% of the selling price.
In most cases, this tax is paid by the buyer as part of the closing costs.
However, the payment responsibility can be negotiated between the buyer and seller during the transaction.
How often are property taxes paid in Manila?
Property taxes in Manila are typically paid annually, with the option to pay in quarterly installments.
The deadline for annual payment is usually on or before March 31st of each year.
Paying the tax in full by the deadline can sometimes result in a small discount.
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What penalties apply for late payment of property taxes?
Late payment of property taxes in Manila incurs a penalty of 2% per month on the unpaid amount.
The penalty is cumulative, meaning it increases each month until the tax is paid in full.
To avoid these penalties, it's crucial to pay property taxes on time or arrange for installment payments.
Are there any exemptions or discounts available for property taxes?
Certain properties, such as those owned by senior citizens or used for educational purposes, may qualify for tax exemptions or discounts.
Senior citizens can receive a discount of up to 20% on their property taxes, subject to specific conditions.
To avail of these benefits, property owners must apply and provide the necessary documentation to the local government.
What is the process for appealing an assessed property value?
If a property owner believes their assessed value is too high, they can file an appeal with the local Board of Assessment Appeals.
The appeal must be filed within 60 days from the date of receipt of the assessment notice.
Supporting documents and evidence must be provided to justify the claim for a lower assessed value.
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How does the location within Manila affect property taxes?
Property taxes can vary depending on the location within Manila, as different districts may have different assessment levels.
Prime locations or areas with higher market values typically have higher assessed values, leading to higher property taxes.
It's advisable to research the specific district's assessment practices when considering a property purchase.
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What are the implications of unpaid property taxes on a property sale?
Unpaid property taxes can become a lien on the property, complicating the sale process.
Buyers should ensure that all property taxes are settled before finalizing the purchase to avoid inheriting any liabilities.
Sellers are generally responsible for clearing any outstanding taxes before transferring ownership.
Can property taxes be paid online in Manila?
Yes, many local government units in Manila offer online payment options for property taxes.
This service provides convenience and helps property owners avoid long queues at government offices.
Property owners should check with their local government for specific online payment procedures and platforms.
What documents are required for property tax payment?
To pay property taxes, owners typically need the tax declaration, official receipt of the previous payment, and a valid ID.
Additional documents may be required if there have been changes in ownership or property improvements.
It's advisable to contact the local assessor's office for a complete list of required documents before making a payment.