Every fee when you buy a Philippine condo, itemised
Budget the sticker price and you will be short. Closing costs typically add 3 to 5 per cent, and a single threshold in the tax code can add 12 per cent more.
The essentials
- Buyer normally pays: documentary stamp tax, transfer tax, registration fee, notarial fee.
- Seller normally pays: capital gains tax and any unpaid real property tax.
- Taxes are computed on the higher of selling price or BIR zonal value.
- Residential units at or below ₱3.6 million are VAT-exempt (RR No. 01-2024). Above it, 12% applies.
- Total buyer-side closing costs typically run 3–5% of the price.
Who pays what
Philippine practice splits the costs by convention rather than by statute for several items, which means it is negotiable — and means an aggressive seller will sometimes try to move their costs onto you. The standard allocation:
| Cost | Rate | Normally paid by | Basis |
|---|---|---|---|
| Documentary Stamp Tax | 1.5% | Buyer | Higher of price or zonal value |
| Transfer Tax | 0.5–0.75% | Buyer | Set by the local government unit |
| Registration Fee | 0.25–0.5% | Buyer | Registry of Deeds schedule |
| Notarial Fee | 1–2% | Buyer | Negotiable in practice |
| VAT | 12% | Buyer (passed on) | Only above the ₱3.6M threshold |
| Capital Gains Tax | 6% | Seller | Higher of price or zonal value |
| Unpaid real property tax | Varies | Seller | Must be cleared before transfer |
Capital gains tax at 6% is the seller's cost. Some contracts quietly assign "all taxes and fees" to the buyer. On a ₱5 million unit that clause is worth ₱300,000. Read the tax allocation clause before you sign anything, and price it into your negotiation if it is there.
Zonal value: why your tax bill may exceed your price
Philippine transfer taxes are computed on the higher of the actual selling price or the BIR's zonal valuation for that location. If you negotiate a genuinely good discount, the tax base does not follow you down — it stays at zonal value.
Check the current zonal value for the property's location on the BIR's published schedules before you model your costs. In parts of Metro Manila where prices have softened, zonal values have not always been revised downward, and buyers are caught by the gap.
The ₱3.6 million VAT cliff
Under Revenue Regulations No. 01-2024, effective 1 January 2024, the VAT-exempt threshold for the sale of house and lot and other residential dwellings rose to ₱3,600,000, up from ₱3,199,200. At or below that figure the sale is VAT-exempt. Above it, 12% VAT applies.
This creates a genuine cliff rather than a gradient. Consider two units from the same developer:
| Unit | Price | VAT | Total before other fees |
|---|---|---|---|
| Studio A | ₱3,550,000 | ₱0 | ₱3,550,000 |
| Studio B | ₱3,700,000 | ₱444,000 | ₱4,144,000 |
A ₱150,000 difference in list price becomes a ₱594,000 difference in what you hand over. If you are shopping near the threshold, this is the most valuable single fact in this article.
Note that developers usually quote VAT-inclusive prices for units above the threshold, so check which basis you are being shown. And note that the threshold is periodically adjusted — confirm the current figure with the BIR before you commit.
A worked example: ₱5 million Quezon City condo
Assume a ready-for-occupancy unit at ₱5,000,000, zonal value below that, bought with a Pag-IBIG loan. Developer sales of new units are ordinarily VAT-able above the threshold.
| Item | Rate | Amount |
|---|---|---|
| Unit price | — | ₱5,000,000 |
| VAT (above ₱3.6M threshold) | 12% | ₱600,000 |
| Documentary Stamp Tax | 1.5% | ₱75,000 |
| Transfer Tax | 0.625% | ₱31,250 |
| Registration Fee | 0.375% | ₱18,750 |
| Notarial Fee | 1% | ₱50,000 |
| Sub-total, taxes and fees | — | ₱775,000 |
| Cash equity (10% LTV rule) | 10% | ₱500,000 |
| Cash needed before the loan | — | ≈ ₱1,275,000 |
On top of this, expect loan processing and appraisal charges, mortgage redemption insurance, fire insurance, and — once you move in — monthly association dues and annual real property tax.
The costs that never stop
- Condominium association dues, charged per square metre per month, covering security, common-area maintenance, and the amenities. On a small studio this is a meaningful fraction of what a mortgage payment costs.
- Real property tax, billed annually by the city, with discounts for early or lump-sum payment.
- Special assessments, which the condominium corporation can levy for major works. Ask to see the association's recent financials before you buy, not after.
- Insurance, typically required for the duration of the loan.
If you intend to rent the unit out, add income tax on the rental, and — if you are abroad — management fees of a further slice of gross rent.
Frequently asked questions
How much are closing costs when buying a condo in the Philippines?
Buyer-side closing costs typically total 3 to 5 per cent of the price: documentary stamp tax at 1.5%, transfer tax at 0.5–0.75%, registration at 0.25–0.5% and notarial fees of 1–2%. If the unit sells above ₱3.6 million, add 12% VAT.
Who pays capital gains tax in the Philippines?
The seller does, at 6% of the higher of selling price or zonal value. Watch for contracts that reassign it to the buyer — on a ₱5 million unit that clause is worth ₱300,000.
What is the VAT threshold for residential property?
₱3,600,000, set by Revenue Regulations No. 01-2024 with effect from 1 January 2024, up from ₱3,199,200. At or below that figure the sale is VAT-exempt; above it, 12% applies. Confirm the current threshold with the BIR, as it is periodically adjusted.
Are taxes based on the price I paid?
Not necessarily. They are computed on the higher of the actual selling price or the BIR zonal value for that location. A steep negotiated discount does not lower the tax base below zonal value.
What ongoing costs should I budget for?
Condominium association dues charged per square metre monthly, annual real property tax, insurance required while the loan runs, and occasional special assessments levied by the condominium corporation for major works.