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Property taxes and fees in Panay Island follow the Philippine national tax structure with some local variations across provinces.
Understanding the complete cost structure is crucial for both property buyers and sellers, as these expenses can significantly impact your total investment. From capital gains tax at 6% to annual property taxes reaching up to 2% of assessed value, plus various transfer fees and registration costs, the financial obligations extend well beyond the purchase price.
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Property transactions in Panay Island involve multiple taxes and fees totaling 8-12% of property value, including 6% capital gains tax, transfer taxes, and various registration fees.
Annual property ownership costs include real property tax and Special Education Fund levy, typically totaling 2% of assessed value, plus homeowners' association dues ranging from ₱6,000 to ₱30,000 yearly.
| Tax/Fee Type | Rate/Amount | When Payable |
|---|---|---|
| Capital Gains Tax | 6% of property value | Within 30 days of notarization |
| Documentary Stamp Tax | ₱15,000 per ₱1M property value | At time of sale |
| Transfer Tax | 0.5-0.75% of property value | Before title transfer |
| Registration Fees | ₱30 + 0.25% of first ₱500K | At Registry of Deeds |
| Real Property Tax | 1% of assessed value | Annually |
| Special Education Fund | 1% of assessed value | Annually |
| Notarial Fees | 0.1-0.5% of property value | At document execution |
How much is the capital gains tax when selling a property, and what exact percentage applies in Panay Island?
The capital gains tax rate in Panay Island is exactly 6% of the higher value between the gross selling price or the Bureau of Internal Revenue (BIR) zonal valuation.
This 6% rate applies to all real property classified as capital assets across the entire Philippines, including all provinces in Panay Island such as Iloilo, Capiz, Aklan, and Antique. The tax calculation uses whichever amount is higher: your actual selling price or the BIR's fair market value assessment for that specific area.
For example, if you sell a property for ₱3,800,000 but the BIR zonal valuation shows ₱4,200,000, you'll pay 6% of ₱4,200,000, which equals ₱252,000 in capital gains tax. The seller typically bears this cost and must pay within 30 days from the notarization of the deed of sale.
Late payments incur substantial penalties: a 25-50% surcharge plus 6% annual interest on the unpaid amount. As of September 2025, this rate remains unchanged from previous years, making it predictable for property investment planning.
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What is the documentary stamp tax rate on property sales, and how is it computed in pesos for every million of property value?
The documentary stamp tax (DST) rate is ₱15 for every ₱1,000 or fraction thereof of the property's value.
For every million pesos of property value, the documentary stamp tax amounts to exactly ₱15,000. This calculation applies to the higher amount between the actual consideration paid or the fair market value as determined by BIR zonal valuations.
Here's how the computation works: if your property is valued at ₱2,000,000, you divide this by ₱1,000 to get 2,000 units, then multiply by ₱15, resulting in ₱30,000 total DST. The tax applies to the deed of sale and related documents, making it an unavoidable cost in any property transaction.
This DST rate has remained consistent across the Philippines and applies uniformly to all provinces within Panay Island. Both residential and commercial properties follow the same rate structure, with payment typically required at the time of document execution.
How much is the transfer tax charged by the local government when a property changes ownership in Panay, and does it vary by province?
The local government transfer tax in Panay Island typically ranges from 0.5% to 0.75% of the property's value, depending on the specific municipality or city.
Most provinces in Panay Island (Iloilo, Capiz, Aklan, and Antique) charge 0.5% of the higher amount between the gross selling price or BIR zonal fair market value. However, highly urbanized cities like Iloilo City may charge up to 0.75% of the property value.
For a ₱2,000,000 property transaction, you would pay ₱10,000 in transfer tax in most provincial areas, or up to ₱15,000 in major cities. The buyer typically shoulders this cost, though parties can negotiate who pays during the transaction.
Payment must be made at the local Treasurer's Office in the municipality where the property is located before the title can be transferred. Each local government unit sets its specific rate within the legal limits, so it's essential to verify the exact rate with the relevant local treasurer's office.
This variation exists because the Local Government Code allows municipalities to set their own rates within prescribed limits, giving them flexibility to generate local revenue.
What are the registration fees at the Registry of Deeds for transferring the property title, and how are they calculated?
Registration fees at the Registry of Deeds follow a progressive scale starting with ₱30 plus 0.25% of the first ₱500,000 of property value.
| Property Value Range | Registration Fee Rate | Example Calculation |
|---|---|---|
| First ₱500,000 | ₱30 + 0.25% | ₱30 + ₱1,250 = ₱1,280 |
| ₱500,001 - ₱1,000,000 | 0.20% of excess | ₱1,000 additional |
| ₱1,000,001 - ₱5,000,000 | 0.15% of excess | ₱6,000 for ₱4M excess |
| Above ₱5,000,000 | 0.10% of excess | ₱1,000 per ₱1M excess |
| Minimum Fee | ₱1,000 total | Applied if calculated amount is less |
Additional fees include ₱50 per instrument for entry or annotation fees, plus ₱330 for issuing the Owner's Duplicate Certificate of Title. For a typical ₱2,000,000 property, total registration fees would be approximately ₱3,630, including all basic charges.
These fees are paid directly to the Registry of Deeds when submitting transfer documents and are required before the new title can be issued in the buyer's name.
How much is the annual real property tax, and what is the standard percentage rate applied to the assessed value?
The annual real property tax in Panay Island is up to 1% of the assessed value for provincial properties.
The assessed value is calculated as 20% of the fair market value for residential properties, 40% for agricultural land, and 50% for commercial properties. This means if your residential property has a fair market value of ₱2,000,000, the assessed value becomes ₱400,000 (₱2,000,000 × 20%).
Using the maximum 1% rate, your annual real property tax would be ₱4,000 (₱400,000 × 1%). However, many local government units in Panay Island charge lower rates, typically ranging from 0.25% to 1% depending on the municipality and property classification.
Cities may have slightly different rates, with some charging higher percentages due to increased urbanization and service demands. The actual rate applies to your property depends on your specific location within Panay Island and the local ordinances of that municipality.
Property tax bills are typically issued annually, with payments due by specific deadlines set by each local government unit, usually around March or April of each year.
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What is the additional Special Education Fund levy on top of real property tax, and how is it computed?
The Special Education Fund (SEF) levy is an additional 1% of the assessed value, mandated under the Local Government Code and collected alongside regular real property tax.
This SEF levy is computed exactly the same way as the basic real property tax but represents a separate charge. For a residential property with a fair market value of ₱2,000,000, the assessed value is ₱400,000 (₱2,000,000 × 20%), making the SEF levy ₱4,000 annually (₱400,000 × 1%).
Combined with the basic real property tax of up to 1%, your total annual tax burden can reach 2% of the assessed value, or ₱8,000 per year for the example property above. This dual taxation structure applies uniformly across all local government units in Panay Island.
The SEF levy specifically funds educational programs and infrastructure in the locality, making it a dedicated tax for education rather than general municipal operations. Both taxes appear on the same tax declaration and are typically paid together during the annual payment period.
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What penalties and interest rates are charged if real property tax payments are late, and how fast do they accumulate?
Late real property tax payments incur a one-time surcharge of up to 25% plus monthly interest of 2% on the total unpaid amount, including the surcharge.
The interest is capped at 72% of the original tax amount, which is reached after 36 months of non-payment. Here's how penalties accumulate: if you owe ₱100,000 in property taxes and pay 15 months late, you'll face a ₱25,000 surcharge plus ₱37,500 in interest (15 months × 2% × ₱125,000).
The penalty structure works aggressively against delinquent taxpayers. For the first month of delinquency, you immediately face the 25% surcharge. Each subsequent month adds 2% interest calculated on the total amount owed, including the original tax plus the surcharge.
After three years of non-payment, your penalty reaches its maximum cap, meaning a ₱100,000 tax bill becomes ₱197,000 (₱100,000 original + ₱25,000 surcharge + ₱72,000 maximum interest). These penalties apply uniformly across all local government units in Panay Island.
Some municipalities offer tax amnesty programs periodically, allowing property owners to settle delinquent accounts with reduced or waived penalties.
What are the typical homeowners' association or subdivision dues, and how much do they add up to per month or per year?
Homeowners' association or subdivision dues in Panay Island typically range from ₱500 to ₱2,500 per month, depending on the subdivision's amenities and services.
Basic subdivisions with minimal amenities charge around ₱500-₱1,000 monthly, while upscale developments with swimming pools, clubhouses, security systems, and landscaping can charge ₱1,500-₱2,500 monthly. This translates to annual costs of ₱6,000 to ₱30,000 per property.
These dues cover essential services such as security guards, street lighting, garbage collection, common area maintenance, and administrative costs. Premium subdivisions may include additional services like 24/7 security, landscaping, recreational facility maintenance, and community events.
Association dues can be increased through proper legal procedures, requiring sufficient notice to homeowners and justification for the increase. The specific amount depends on the subdivision's by-laws, approved budgets, and the range of services provided to residents.
Before purchasing property in a subdivision, always verify the current association dues and review the homeowners' association rules to understand potential future increases and your obligations as a property owner.
Are there local permit fees, community taxes, or barangay clearance fees tied to owning or transferring a property in Panay, and what are the usual amounts?
Local permit fees, community taxes, and barangay clearance fees are required for property ownership and transfers, with costs typically ranging from ₱550 to ₱5,200 total.
- Barangay Clearance: ₱50-₱200 per document for personal transactions, higher for construction or business purposes
- Community Tax Certificate (Cedula): Usually below ₱100 annually per person involved in the transaction
- Local permit fees: ₱500-₱5,000 depending on municipality and permit type (occupancy, building, transfer fees)
- Business permit fees: ₱1,000-₱3,000 if the property will be used for commercial purposes
- Environmental compliance certificates: ₱200-₱500 for certain property types
These fees vary significantly among different municipalities within Panay Island, as each local government unit sets its own rates through local ordinances. Iloilo City and other urban centers typically charge higher fees than smaller municipalities.
The barangay clearance is particularly important as it's required for most property-related transactions and serves as proof that you have no pending issues with the local barangay government. Some permits may require renewal annually or upon specific transactions.
It's essential to check with the specific municipality and barangay where your property is located, as fees can change through new ordinances and may include additional charges for specific services or compliance requirements.
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What are the notarial fees for property sales or transfers, and is there a standard percentage or fixed amount charged?
Notarial fees for property transfers in Panay Island typically range from 0.1% to 0.5% of the property value, with most transactions falling between ₱2,000 to ₱20,000.
The fee structure varies by property value and local practice among notaries. For a ₱2,000,000 property, expect to pay approximately ₱2,000-₱10,000 in notarial fees. Higher-value properties may command fees at the upper end of the percentage range, while smaller transactions might have minimum fixed fees.
Some areas follow Integrated Bar of the Philippines (IBP) chapter fee schedules, which provide standardized rates, while others allow negotiation between parties and notaries. The fees cover document preparation, notarization of the deed of sale, and related legal documentation required for the property transfer.
Notarial fees can sometimes be shared between buyer and seller, though this arrangement must be agreed upon beforehand. The fee includes the notary's professional services in reviewing documents, verifying identities, and ensuring legal compliance of the transaction.
It's advisable to confirm notarial fees upfront when selecting a notary, as some may charge additional fees for document preparation, multiple copies, or expedited services beyond the basic notarization.
What are the utility connection fees for water and electricity when setting up a new home in Panay, and what ballpark figures should buyers expect?
Utility connection fees in Panay Island range from ₱5,000 to ₱17,000 total for both water and electricity connections to a new home.
| Utility Type | Connection Fee Range | What's Included |
|---|---|---|
| Water Connection | ₱2,000 - ₱7,000 | Application, meter, deposit, installation |
| Electricity Connection | ₱3,000 - ₱10,000 | Application, meter, deposits, basic wiring |
| Additional Water Deposits | ₱1,000 - ₱3,000 | Security deposit, meter guarantee |
| Additional Electrical Deposits | ₱2,000 - ₱5,000 | Service deposit, transformer contribution |
| Documentary Fees | ₱200 - ₱500 | Processing, permits, certificates |
Water connection fees through Metro Iloilo Water District and other suppliers typically cost ₱2,000-₱7,000 for new residential connections, including meter installation and initial deposits. Electricity connection through Panay Electric Company (PECO) or local cooperatives ranges from ₱3,000-₱10,000 for standard residential service.
Higher fees apply if your property requires new power lines, transformer upgrades, or is located far from existing utility infrastructure. Both utilities may require additional security deposits that can be refunded upon service disconnection, typically ranging from ₱1,000-₱5,000 total.
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How much are the optional but common costs like fire insurance or mortgage registration fees, and how are they usually computed?
Fire insurance and mortgage registration fees are optional but commonly required costs that add ₱2,000 to ₱15,000 annually plus one-time registration expenses.
Fire insurance premiums typically cost ₱1,500-₱5,000 per million pesos of coverage annually, depending on the insurance provider and property risk assessment. For a ₱2,000,000 property, expect annual fire insurance premiums of ₱3,000-₱10,000.
Mortgage registration fees are approximately 0.25% of the loan amount for the first ₱1,000,000, then 0.2% for any excess amount, plus small administrative fees around ₱50-₱100. For a ₱1,500,000 mortgage, registration fees would be about ₱3,500 (₱2,500 for first ₱1M + ₱1,000 for ₱500K excess).
Documentary stamp tax on mortgages adds ₱1.50 per ₱200 of the principal loan amount. A ₱1,500,000 mortgage would incur ₱11,250 in documentary stamp tax (₱1,500,000 ÷ ₱200 × ₱1.50).
Banks typically require fire insurance as loan collateral protection, making it practically mandatory for financed properties. These costs recur annually for insurance and are one-time expenses for mortgage registration, adding to your overall property investment budget.
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 the complete tax and fee structure in Panay Island is essential for accurate property investment planning, as these costs can represent 8-12% of your total property investment.
As of September 2025, these rates remain stable, but always verify current fees with local government offices and professionals before completing any property transaction, as local ordinances can create variations in specific municipalities.
Sources
- Respicio Law - Capital Gains Tax Philippines
- NTRC - Capital Gains Tax
- Respicio Law - Documentary Stamp Tax
- Respicio Law - Land Title Transfer Costs
- Suntrust - Title Transfer Costs
- Emerhub - Real Property Tax Guide
- Suntrust - Real Property Tax Payment
- BLGF - Special Education Fund
- Respicio Law - Property Tax Penalties
- Respicio Law - Notarial Fees