What are all the property taxes and fees in Manila?

Last updated on September 1, 2025

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

Manila property investors face a complex landscape of taxes and fees that can significantly impact their investment returns. Understanding these costs upfront is crucial for making informed decisions about buying residential or commercial properties in the Philippine capital.

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.

Quick Summary:

As of September 2025, Manila property owners pay up to 2% basic real property tax plus 1% Special Education Fund tax on assessed value annually.

Property buyers face additional one-time costs including 0.75% transfer tax and 1.5% documentary stamp tax on purchase price.

Tax/Fee Type	Rate	Payment Frequency	Calculation Base
Basic Real Property Tax	Up to 2%	Annual	Assessed Value
Special Education Fund Tax	1%	Annual	Assessed Value
Transfer Tax	0.75%	One-time (purchase)	Purchase Price/Fair Market Value
Documentary Stamp Tax	1.5%	One-time (purchase)	Selling Price/Fair Market Value
Late Payment Penalty	2% per month (max 36%)	When applicable	Unpaid Tax Amount

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Manila. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Manila real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Manila, Makati, and Quezon City. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What is the current basic real property tax rate in Manila?

As of September 2025, Manila charges up to 2% of the assessed value as basic real property tax for all property types.

This rate applies to both residential and commercial properties within Manila city limits. The exact rate may vary slightly depending on specific property classifications and local government adjustments.

Property owners receive annual tax declarations from the city assessor's office specifying the exact amount due. The basic property tax forms the foundation of annual property ownership costs in Manila.

It's something we develop in our Philippines property pack.

How is Manila property tax calculated - fair market value or assessed value?

Manila property tax calculations are based on assessed value, not fair market value directly.

The assessed value equals the fair market value determined by local government appraisers multiplied by an assessment level percentage. This system ensures standardized valuations across similar property types.

Local assessors conduct periodic property valuations to establish fair market value using comparable sales data, replacement costs, and income approaches. The assessment level then reduces this value to create the taxable assessed value.

Property owners can challenge assessments through formal appeals if they believe valuations are incorrect or unfair.

What assessment percentage applies to residential properties in Manila?

Residential properties in Manila are assessed at 20% of their determined fair market value.

For example, a house valued at ₱5,000,000 fair market value would have an assessed value of ₱1,000,000 (20% × ₱5,000,000). The property tax calculation then applies to this assessed amount.

This lower assessment level for residential properties reflects government policy encouraging homeownership and reducing tax burden on primary residences. The 20% rate has remained consistent across recent years.

Mixed-use properties with residential components may qualify for proportional residential assessment on the residential portions.

What assessment percentage applies to commercial properties in Manila?

Commercial and industrial properties face a 50% assessment level of fair market value in Manila.

A commercial building worth ₱10,000,000 fair market value would be assessed at ₱5,000,000 (50% × ₱10,000,000) for tax calculation purposes. This higher rate reflects the income-generating potential of business properties.

Office buildings, retail spaces, warehouses, and manufacturing facilities all fall under this commercial classification. The 50% rate applies regardless of whether the property is owner-occupied or leased to tenants.

Property owners should verify correct classification to avoid overpayment, as misclassification can result in unnecessary tax burden.

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Are there additional taxes beyond basic property tax in Manila?

Yes, Manila property owners must pay the Special Education Fund (SEF) tax in addition to basic property tax.

The SEF tax is mandatory for all property types and cannot be waived or reduced. This additional tax supports public education funding throughout the Philippines as mandated by national law.

Both taxes appear on the same annual tax bill and must be paid together. Property owners cannot pay basic property tax without also paying the SEF component.

Some barangays may impose additional local service fees, but the SEF tax remains the primary additional levy across all Manila properties.

What is the exact Special Education Fund tax rate?

The Special Education Fund tax rate is exactly 1% of the assessed property value annually.

This rate is fixed by national law and remains consistent across all Philippine cities, including Manila. For a property with ₱1,000,000 assessed value, the SEF tax would be ₱10,000 per year.

Combined with the basic property tax rate of up to 2%, total annual property taxes can reach 3% of assessed value in Manila. The SEF tax has remained at 1% for several years without adjustment.

Property owners should budget for both taxes when calculating annual ownership costs for Manila real estate investments.

What transfer taxes apply when buying Manila property?

Manila property purchases trigger transfer tax of 0.75% and documentary stamp tax of 1.5% of the transaction value.

Transfer tax applies to the higher of actual purchase price or fair market value as determined by local assessors. Documentary stamp tax also uses the higher of selling price or fair market value as the tax base.

For a ₱8,000,000 property purchase, buyers pay ₱60,000 transfer tax (0.75%) plus ₱120,000 documentary stamp tax (1.5%), totaling ₱180,000 in transfer-related taxes.

These are one-time costs paid during the property transfer process and cannot be avoided in legitimate transactions.

It's something we develop in our Philippines property pack.

Who typically pays documentary stamp tax in Manila transactions?

Buyers usually pay the 1.5% documentary stamp tax in Manila property transactions, though arrangements can vary.

Tax/Fee	Typical Payer	Rate	Negotiable
Documentary Stamp Tax	Buyer	1.5%	Yes
Transfer Tax	Buyer	0.75%	Yes
Registration Fees	Buyer	Varies	No
Capital Gains Tax	Seller	6%	No
Real Estate Agent Commission	Seller	3-5%	Yes

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How are Registry of Deeds registration fees calculated?

Registry of Deeds fees follow a sliding scale based on property value, typically ranging from 0.25% to 0.50% of declared value.

Higher-value properties generally pay lower percentage rates, while smaller transactions face higher relative fees. Minimum fees apply regardless of property value to cover administrative costs.

Additional documentary requirements may trigger supplementary fees for items like certified copies, annotations, or special endorsements. These registration costs are unavoidable for legitimate property transfers.

Buyers should verify current fee schedules with the specific Registry of Deeds office handling their transaction, as rates can vary between locations and may be updated periodically.

What annual fees exist beyond property tax in Manila?

Manila properties may face additional annual fees including garbage collection, street cleaning, and barangay service charges.

Common annual fees include:

Barangay clearance fees (₱100-₱500 annually)
Garbage collection fees (₱1,200-₱3,600 annually)
Street lighting maintenance (varies by location)
Fire protection services (₱200-₱1,000 annually)
Community development fund contributions (voluntary but common)
Association dues for subdivisions or condominiums

These fees vary significantly by barangay and property type. High-end subdivisions and condominiums typically face higher association dues and service fees.

Property owners should inquire about all recurring fees before purchasing to accurately budget for total annual ownership costs.

What penalties apply for late property tax payment in Manila?

Late property tax payments in Manila incur 2% monthly penalties on unpaid amounts, capped at 36% annually.

For example, ₱50,000 in unpaid taxes would generate ₱1,000 monthly penalties (2% × ₱50,000). After 18 months, penalties reach the maximum 36% or ₱18,000 total.

Penalties accrue from the original due date, typically January 31st each year, until full payment is made. Interest compounds monthly on both principal and accumulated penalties.

Property owners can avoid penalties by paying taxes before the deadline or arranging installment payment plans with the city treasurer's office. Early payment may qualify for discounts in some cases.

It's something we develop in our Philippines property pack.

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.

Understanding Manila's property tax structure helps investors make informed decisions about real estate purchases.

Property buyers should budget approximately 4-5% of purchase price for all transfer taxes and fees, plus annual carrying costs of up to 3% of assessed value.