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Property taxes in the Philippines are relatively high compared to neighboring Southeast Asian countries, with rates reaching up to 3% of assessed value in Metro Manila. The Philippine real property tax system varies significantly by location, with Metro Manila cities charging the highest rates while provincial areas like Cebu and Davao maintain lower rates around 2% of assessed value.
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Property tax rates in the Philippines range from 2% in provinces to 3% in Metro Manila, calculated on assessed value rather than market value.
All property owners must pay an additional 1% Special Education Fund levy on top of the base property tax rate, making the Philippines one of the higher-taxed property markets in Southeast Asia.
| Location | Base Property Tax Rate | Total Rate (including SEF) |
|---|---|---|
| Metro Manila Cities | Up to 2% of assessed value | Up to 3% of assessed value |
| Cebu City/Province | 1% of assessed value | 2% of assessed value |
| Davao City/Province | 1% of assessed value | 2% of assessed value |
| Most Other Provinces | 1% of assessed value | 2% of assessed value |
| Idle Land (Metro Manila) | Up to 5% of assessed value | Up to 6% of assessed value |
| Agricultural Land | 0.5-1% of assessed value | 1.5-2% of assessed value |
How much is the standard real property tax rate in the Philippines right now?
As of September 2025, the standard real property tax rate in the Philippines ranges from 1% to 2% of a property's assessed value, depending on location.
Metro Manila cities charge the highest base rates at up to 2% of assessed value for residential properties. Provincial areas like Cebu and Davao typically charge 1% of assessed value as their base rate.
Every property owner must pay an additional 1% Special Education Fund (SEF) levy on top of the base rate. This means total annual property tax rates reach up to 3% in Metro Manila and up to 2% in most provincial areas.
For a residential property worth PHP 10 million with an assessed value of PHP 2 million (20% assessment level), annual property taxes would be PHP 60,000 in Metro Manila or PHP 40,000 in provinces like Cebu.
Are property tax rates the same across the whole country, or do they vary by city or municipality?
Property tax rates vary significantly across the Philippines, with each local government unit (LGU) setting its own rates within national limits.
The national tax code sets maximum rates that LGUs cannot exceed: 1% for provinces and 2% for cities and municipalities in Metro Manila. However, many LGUs set lower rates than these maximums through local ordinances.
Cities and municipalities have more flexibility in setting rates compared to provinces. For example, Quezon City and Manila can implement different rate structures for residential versus commercial properties, while provincial governments typically apply uniform rates.
This decentralized system means investors must research specific property tax rates for each location they consider. A property in Makati will have different tax obligations than one in nearby Quezon City, even though both are in Metro Manila.
What are the exact property tax rates in Metro Manila compared to provinces like Cebu or Davao?
| Location | Base Property Tax Rate | Special Education Fund | Total Maximum Rate |
|---|---|---|---|
| Quezon City | 1-2% of assessed value | 1% of assessed value | 3% of assessed value |
| Manila City | 1-2% of assessed value | 1% of assessed value | 3% of assessed value |
| Makati City | 1-2% of assessed value | 1% of assessed value | 3% of assessed value |
| Cebu City | 1% of assessed value | 1% of assessed value | 2% of assessed value |
| Cebu Province | 1% of assessed value | 1% of assessed value | 2% of assessed value |
| Davao City | 1% of assessed value | 1% of assessed value | 2% of assessed value |
| Davao Province | 1% of assessed value | 1% of assessed value | 2% of assessed value |
How often do property owners need to pay property tax each year in the Philippines?
Property owners in the Philippines must pay real property tax annually, with the standard deadline falling on January 31 of each year.
Most local government units offer quarterly payment options for property owners who prefer to spread the tax burden throughout the year. Quarterly deadlines typically fall at the end of March, June, September, and December.
Many LGUs provide early payment discounts of up to 20% for property owners who pay their full annual tax before the deadline. Quezon City, for example, offers a 20% discount for full-year payments made by December 31 of the preceding year.
Missing the annual deadline triggers penalty charges and interest that accumulate monthly. Property owners should mark their calendars for January 31 or take advantage of quarterly payment schedules to avoid these additional costs.
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What is the formula used to calculate property taxes, and what role does the assessed value of the property play?
The Philippines property tax calculation follows a two-step process that starts with determining the assessed value, then applying the local tax rates.
Step one involves calculating the assessed value by multiplying the property's fair market value by the assessment level. Residential properties use a 20% assessment level, commercial and industrial properties use 50%, and agricultural land uses 40%.
Step two applies the local tax rates to this assessed value. The formula is: Annual Tax = (Assessed Value Ă— Base Rate) + (Assessed Value Ă— 1% SEF). For example, a PHP 10 million residential property has an assessed value of PHP 2 million (20% of PHP 10 million).
In Metro Manila, this property would pay: (PHP 2 million Ă— 2%) + (PHP 2 million Ă— 1%) = PHP 60,000 annually. In provinces, the same property would pay: (PHP 2 million Ă— 1%) + (PHP 2 million Ă— 1%) = PHP 40,000 annually.
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Who decides the "assessed value" of a property in the Philippines, and how is it determined?
The local assessor's office in each city or municipality determines both the fair market value and assessed value of properties within their jurisdiction.
Local assessors use standardized schedules of values that consider factors like location, property size, construction quality, age of the building, and local market conditions. These schedules are updated approximately every three years, though some LGUs update more frequently.
The assessment process involves physical inspection of the property, review of comparable sales in the area, and application of depreciation factors for older buildings. Commercial properties receive more frequent reassessments due to their higher values and market volatility.
Property owners can appeal their assessed values if they believe the valuation is incorrect. The appeal process typically involves submitting evidence like recent appraisals or comparable property sales to support a lower valuation claim.
Are there additional local taxes or fees on top of the base property tax rate that property owners should know about?
Yes, several additional taxes and fees can significantly increase the total property tax burden beyond the base real property tax rate.
Idle land tax represents the most significant additional charge, particularly in Metro Manila. LGUs can impose up to 5% of assessed value annually on unused or underdeveloped land, bringing total tax rates to as high as 8% including the SEF.
Special assessments may be levied for local infrastructure improvements like road construction, drainage systems, or community facilities. These assessments typically range from a few thousand to tens of thousands of pesos depending on the project scope.
Some LGUs impose additional fees for services like garbage collection, street lighting, or security that appear on property tax bills. Property owners should review their complete tax statement to understand all charges beyond the basic property tax rate.
How does the Philippines' property tax burden compare with neighboring countries like Thailand, Vietnam, or Malaysia?
The Philippines imposes significantly higher property tax rates than most neighboring Southeast Asian countries, making it one of the region's more expensive markets for property ownership.
Thailand recently introduced property taxes ranging from 0.02% to 0.3% of assessed value, making Thai property taxes roughly one-tenth of Philippine rates. A property with the same value would cost PHP 60,000 annually in Philippine taxes versus only PHP 6,000 in Thailand.
Vietnam currently has no annual property tax system, only transaction fees and land-use charges. Malaysian property taxes typically stay below 1% of assessed annual rental value, which usually translates to much lower effective rates than the Philippines.
These higher tax rates in the Philippines can significantly impact investment returns, especially for buy-and-hold investors who plan to own properties for many years. International investors should factor these ongoing costs into their financial projections when comparing regional opportunities.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Philippines versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Are there exemptions or discounts available on property taxes, for example for senior citizens, agricultural land, or low-value homes?
Several exemptions and discounts can reduce property tax obligations, though availability varies by local government unit.
Senior citizen discounts apply to primary residences owned by Filipino citizens aged 60 and above. The discount typically ranges from 5% to 20% of the total property tax bill, but property owners must apply annually and meet income requirements.
Agricultural land receives preferential treatment through lower assessment levels (40% versus 50% for commercial) and some LGUs offer additional exemptions for active farming operations. Low-value residential properties may qualify for reduced rates or exemptions in certain municipalities.
Early payment discounts represent the most widely available savings opportunity. Many LGUs offer 10% to 20% discounts for property owners who pay their full annual tax before the deadline, effectively reducing the tax burden for organized property owners.
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What penalties or interest charges apply if someone misses the property tax payment deadline in the Philippines?
Late property tax payments in the Philippines trigger substantial penalties that can quickly multiply the original tax obligation.
The standard penalty structure charges up to 2% per month on the unpaid tax amount, with a maximum penalty cap of 72% if taxes remain unpaid for three years or longer. This means a PHP 40,000 annual tax bill could grow to PHP 68,800 if left unpaid for the maximum penalty period.
Interest charges accumulate separately from penalties, adding another layer of cost for delinquent property owners. The combination of penalties and interest can effectively double the original tax obligation within a few years.
Some LGUs offer amnesty programs periodically that waive penalties and interest for property owners who settle their back taxes during specific periods. These programs typically last 3-6 months and represent significant savings opportunities for delinquent taxpayers.
Has there been any recent change or update to property tax rates or assessment rules in the Philippines in the past two years?
Major property tax reforms have been implemented through the Real Property Valuation and Assessment Reform Act (RPVARA), with significant changes taking effect in 2024 and 2025.
The RPVARA requires local government units to update their valuation schedules more frequently and caps annual property tax increases to prevent sudden jumps that burden property owners. Many LGUs are still implementing these reforms throughout 2025.
Metro Manila and several provincial LGUs have announced tax amnesty programs during 2024-2025, allowing property owners to settle back taxes without penalties. Cebu City, for example, extended its amnesty program through 2025 with plans to implement new rates in 2026.
The reform act also mandates automation of property tax collection and assessment systems, leading to more efficient online payment options and improved accuracy in property valuations across the Philippines.
Where exactly can a property owner check and pay their property taxes in the Philippines, and are online payment options available?
Property owners can check and pay their property taxes through multiple channels, with online options becoming increasingly available across the Philippines.
1. **City/Municipal Treasurer's Office**: All LGUs accept payments at their main office and satellite collection branches2. **Online Payment Portals**: Major cities like Quezon City, Manila, and Cebu City offer online payment systems linked from their official websites 3. **Authorized Payment Centers**: Many LGUs partner with banks, pawn shops, and payment centers for convenient locations4. **Mobile Payment Apps**: Some cities integrate with popular Filipino payment apps like GCash and PayMaya5. **Bank Payment Facilities**: Select banks offer property tax payment services for specific LGUsTo check assessed values and tax obligations, property owners should visit or contact the local assessor's office. Most LGUs provide tax statements that show the complete breakdown of charges, payment history, and any outstanding balances.
Online payment availability varies significantly by location, with Metro Manila cities offering the most comprehensive digital options while rural areas may still require in-person visits to government offices.
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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 in the Philippines represent a significant ongoing cost for real estate investors, with rates among the highest in Southeast Asia.
Understanding the local variations, payment deadlines, and available discounts can help property owners minimize their tax burden while staying compliant with Philippine law.
Sources
- Emerhub - Guide to Real Property Tax in the Philippines
- Respicio & Co. - Property Tax for House Purchase in the Philippines
- Tax Calculator Philippines - Real Property Tax in the Philippines
- Cebu Grand Realty - FAQs About Property Taxes in the Philippines
- Filepino - Taxation Philippines Updated Guide
- BambooRoutes - Manila Property Taxes and Fees
- Philippine News Agency - Property Tax Updates
- Philippine Star - Cebu City RPT Increase After Amnesty Ends 2026
- BambooRoutes - Davao City Property Market
- Quezon City Government - Real Property Tax Payment