Property taxes in the Philippines: Full guide for Americans

Owning property in the Philippines comes with tax responsibilities. Whether you're thinking about buying real estate there or already own property, it's very important to know what property taxes in the Philippines are, how much you'll pay, and when the payments are due.

Generally speaking, you'll pay between 1% and 2% of your property's assessed value annually, depending on the location. Additional fees like the Special Education Fund can add another 1% to your total tax bill.¹

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What are property taxes in the Philippines?

Property owners in the Philippines must pay the annual real property tax to local government units. This applies to all types of real property within Philippine territory, such as houses and condo units.

As an American, your property ownership options are a little limited. By law, foreigners can't directly own land in the Philippines. Only Filipino citizens or corporations with at least 60% Filipino ownership can hold land titles.¹

However, you can own property through a Philippine corporation where your stake doesn't exceed 40% of the total equity.¹

You can also buy condo units in the Philippines and even townhouses, as long as the underlying land remains under Filipino or qualifying corporate ownership.

Regardless of the type of property you own, you'll have to pay property taxes. It's calculated as a percentage of your property's assessed value, typically ranging from 1% to 2% depending on the location and other factors.¹

Property taxes in the Philippines by regions

Your property tax rate depends on where your real estate is located. Different regions have different maximum rates set by law:

• Metro Manila properties face a maximum tax rate of 1% of the assessed property value¹
• Properties outside Metro Manila can be taxed up to 2% of their assessed value¹

Local governments can also impose a Special Education Fund (SEF) tax at a flat 1% rate on top of the basic property tax.¹

If you own vacant or undeveloped land, be aware that some areas impose an extra 5% annual tax penalty.² This additional charge encourages property development and productive land use.

What types of property taxes are there in the Philippines?

The main property tax you're responsible for as an American is the annual real estate tax. However, buying or selling your property comes with additional costs.

When completing a full buy-and-sell cycle, expect to pay between 13% and 15.25% of your property's value in fees and taxes. Sellers typically pay 10.5% to 12.5% of these costs, and buyers cover the remaining 2.5% to 3.75%.¹

But these are one-time costs that you won't have to cover again once the sale is complete. In turn, the property tax in the Philippines is something you'll have to pay every year.

If you rent out your property, you'll also need to pay income taxes on your rental earnings. If that's your plan, it's a good idea to consult with a lawyer first to see how much you'll owe in taxes to avoid any legal issues.

How are property taxes calculated in the Philippines?

How much you pay in property taxes in the Philippines is based on your property's assessed value.

The government determines your property's fair market value, and then applies an assessment percentage based on your property's use and zoning classification. This creates the tax base, which is then multiplied by the applicable real estate tax rate.

Here are the assessment levels for buildings:

For example, let's say you own a condominium unit in Manila with a fair market value of 2,500,000 PHP (approximately 45,000 USD). Here's how your annual property tax would be calculated:

1. Fair market value: 2,500,000 PHP
2. Assessment level: 40% (falls in the 2-5 million range)
3. Assessed value: 2,500,000 PHP × 40% = 1,000,000 PHP
4. Property tax rate (Manila): 1%
5. Property tax: 1,000,000 PHP × 1% = 10,000 PHP

If the 1% Special Education Fund (SEF) tax applies to your property, you'll also have to pay an additional 10,000 PHP, for a total of 20,000 PHP. This is approximately 350 USD, depending on the exchange rate.

How to pay property taxes in the Philippines?

Typically, you make all Real Property Tax (RPT) payments at the local Treasurer's Office in your city or municipality. You have 2 payment options to choose from:²

• Full payment: Pay your entire annual tax bill by January 31 each year
• Quarterly installments: Spread your payments across the year, paying by March 31, June 30, September 30, and December 31

Every 3 years, you'll also have to file a sworn statement declaring your property's current fair market value. The filing period runs from January 1 to June 30 annually.¹ This declaration helps make sure that your property assessment stays current with market conditions.

Are there any property tax exemptions in the Philippines?

There are a couple of property tax exemptions available in the Philippines, but they typically don't apply to residential properties like condo units. The main exceptions are for:²

• Charitable institutions
• Cooperatives
• Government-owned properties
• Environmental equipment

Since most foreign property ownership involves condominiums or residential units, these exemptions rarely apply to American property owners in the Philippines.

Penalties for not complying with property tax rules in the Philippines

If you don't pay your property taxes on time, there will be financial consequences.

Missing a payment deadline triggers a 2% penalty per month on any unpaid balance. These penalties compound monthly and cap at 72% of the original tax amount.²

For example, if you owe 20,000 PHP in property taxes and don't pay for a year, you could face an additional 4,800 PHP in penalties. That's approximately 85 USD.

In extreme cases, where you don't pay taxes for very long periods of time, the government has the authority to seize and auction your property to recover the debt. This is a last resort, but it's a consequence that can result in losing your property.

At the same time, if you pay early, many local governments offer early payment discounts of up to 20%.²

Frequently asked questions

How often do you pay property tax in the Philippines?

Property taxes in the Philippines are due annually. You can choose to pay the full amount by January 31st each year, or split it into four quarterly payments with deadlines on March 31st, June 30th, September 30th, and December 31st.²

How much are property taxes in the Philippines?

It depends on the location. Property tax rates range from 1% to 2% of your property's assessed value. Properties in Metro Manila have a maximum rate of 1%, but those outside Metro Manila can be taxed up to 2%. Some areas also add a 1% Special Education Fund tax, bringing your total annual rate to around 2% to 3% of the assessed value.¹

Does paying property tax give ownership in the Philippines?

No, paying property taxes doesn't grant you ownership rights. Property taxes are an annual obligation that comes with owning real estate, not a way to buy a property in the Philippines. As an American, you can own condo units directly or hold property through a Philippine corporation where your stake doesn't exceed 40%.¹

Many Americans decide to buy property and move to the Philippines for its lower cost of living.

But property ownership in the Philippines, like in most places in the world, comes with tax obligations. You'll pay 1% to 3% of your property's assessed value every year, either as a lump sum by January 31st or in quarterly installments throughout the year.¹²

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Sources

1. Global Property Guide - Philippines
2. Cocogen Insurance - Realty Property Tax 101

Sources checked 09/12/2025