16/06/2026
BEP Real Estate 101
WHEN THE DEED OF ABSOLUTE SALE OF A REAL ESTATE PROPERTY IS SIGNED BY SELLER AND BUYER AND DULY NOTARIZED BY A LAWYER, WHAT ARE THE TAXES TO BE PAID, HOW MUCH AND WHEN TO PAY?
When a Deed of Absolute Sale (DOAS) for real estate is notarized, you must settle specific taxes with the Bureau of Internal Revenue (BIR) to secure the Certificate Authorizing Registration (eCAR), which is required to transfer the title.
The applicable taxes depend on whether the property is classified as a Capital Asset or an Ordinary Asset.
1. Primary Taxes for Capital Assets
Tax Type /
RateTax /
Base
Capital Gains Tax (CGT) 6%
Higher of Selling Price, Zonal Value, or Fair Market Value
Documentary Stamp Tax (DST)
1.5%
Higher of Selling Price, Zonal Value, or Fair Market Value
Most one-time transactions by individuals (who are not engaged in the real estate business) involve property classified as a Capital Asset.
Capital Gains Tax (CGT):
This is a final tax on the presumed gain from the sale. It is generally the responsibility of the seller to pay.
Documentary Stamp Tax (DST):
This is a tax on the document itself.
While the law makes both parties solidarily liable, by custom and convention, it is typically shouldered by the buyer.
2. When to Pay (Deadlines)
It is critical to meet these deadlines to avoid penalties, surcharges, and interest.
Capital Gains Tax (CGT):
Usually due within 30 days following the month of the sale (the date of the notarized DOAS).
Documentary Stamp Tax (DST):
Generally due within 5 days after the close of the month in which the document was signed/notarized.
Note: Because deadlines are strictly enforced, it is highly recommended to consult with your Revenue District Office (RDO) immediately after notarization to confirm the exact filing dates based on your specific transaction date.
3. Other Potential Fees
Beyond BIR taxes, you should also anticipate:
Transfer Tax:
Paid to the Local Treasurer (City or Municipal Hall) where the property is located.
The rate varies by LGU (usually 0.50% to 0.75% of the consideration or fair market value).
This is typically due within 60 days from the date of the deed's ex*****on.
Registration Fees:
Paid to the Registry of Deeds to officially register the transfer of the title.
Important Reminders
Ordinary Assets:
If the property is considered an "ordinary asset" (e.g., used in business or held for sale by a developer), the transaction may be subject to Value Added Tax (VAT) at 12% instead of the 6% Capital Gains Tax.
eCAR Requirement:
You cannot transfer the title at the Registry of Deeds without the eCAR issued by the BIR, which is only released after these taxes are fully paid.
Professional Verification:
Given the complexity of tax classifications (Capital vs. Ordinary), I recommend verifying the specific tax treatment with a tax professional or your local BIR office to ensure compliance.
Disclaimer: Tax laws and regulations can be subject to change and interpretation; please verify these details with your local BIR Revenue District Office (RDO) or a licensed tax professional before making payments.
