OFW's Guide to Real Estate Property Tax in the Philippines

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Purchasing and owning a house or a real estate property in the Philippines is considered a rewarding experience and it comes with lots of benefits. But with those privileges comes with responsibilities and civic duties you need to fulfill such as paying your real estate property taxes.

Whether you've owned a house before or you're a first time homeowner, it's important for you to know how to pay your real property tax here in the Philippines, but don't worry, we've you covered with that!

What is Real Estate Property Tax?

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Now, you might be wondering, what is a real estate property tax? A real property tax is a type of tax imposed and collected from property owners by local government units (LGUs). Locally known as amilyar, real estate property tax can also be referred to as real estate tax or real property tax.

Just a quick trivia: the colloquial term 'amilyar' is derived from the Spanish word amillaramiento, which means 'assessment of a tax.' Tax collection was first introduced during the Spanish colonialization whereas the datu (or head) of a barangay collected taxes from his jurisdiction in exchange for security and protection.

Real property tax covers all agricultural, residential, and commercial properties in the country.

Why you should pay real property tax?

I'm certain that you'd be asking why you should pay such property tax. The Republic Act 7160 or the Local Government Code gave LGUs the authority to impose and collect property taxes as a way to earn revenue and to fund public expenditure. Property owners or the person whose name is indicated in the land title or certificate is the one in charge of paying such tax.

How do I compute the real property tax rate?

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The basic real property tax computation is as follows:

Real Property Tax = Rate x Assessed Values

The real property tax rates vary depending on the location of your property. For properties located in Metro Manila, 2% interest rate is added while 1% for properties in the province.

To extract the total assessed value, the local government unit determines the fair market value of the real estate property and multiplies it with the fixed assessment levels.

So, to compute for your total real property tax, let's take a look at this example:

Let's say you own a property in Makati City, Metro Manila that has a total assessed value of ₱1,000,000. We will then multiply this with the interest rate of 2%. Then, your total basic property tax will be ₱20,000.

What are the additional taxes levied from real estate properties?

Aside from the real property tax, local government units can also collect additional taxes like the special education fund. The special education fund is an added 1% tax on top of the total assessed value and serves as funding for the needs of the public schools in your local city or municipality.

So, going back to our computation earlier, the total assessed value of our property is ₱1,000,000. We will now determine our special education fund value by multiplying the total assessed value with the SEF rate which is 1%.

So that will be:

₱1,000,000 x 1% = ₱ 10,000

Then combine it with your basic real property tax which is ₱20,000. Your final real property tax will be ₱30,000.

When is the deadline for paying real property taxes?

Property owners have the option to pay real estate taxes in full or via quarterly payments. If you opt for the first option, the deadline will be on or before January 31st every year. For the second option, the dates are as follows:

  • First quarter- On or before January 31

  • Second quarter- On or before June 30

  • Third quarter- On or before September 30

  • Fourth quarter- On or before December 31

How to pay real property taxes?

  • Online payment and via partner merchants- Different cities in Metro Manila have adapted and utilized technology for an easier and faster way of paying your amilyar.

    For instance, Quezon City has an online portal called QC Eservices where property owners (whether new or returning) can register and log in to their account and settle their payment dues like real property tax.

    For Makatizens (people residing in Makati City, of course) have the option to pay the tax for their real estate properties through makationlinepayments.com. Similarly, Pasig City has its own online payment portal as well at payments.pasigcity.gov.ph.

  • Payment via City Hall- If you want to personally pay your real property tax, you can head on to your city's Treasurer's office at your local municipal hall. Some cities offer tax discounts for payments made in advance. In Pasig City, a property owner can get a 15% discount on his real property tax if he pays before the start of the new year. But to be sure, make sure to contact the local government unit concerned to verify such information.

How do I get my real property tax declaration?

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You may be required to present some documents in order to get your real property tax declaration. These documents, depending on your local government unit, may be but not limited to:

  • BIR Tax Clearance Certificate

  • Certificate Authorizing Registration

  • Updated Real Property Tax payment

  • Transfer Fee Receipt

  • Sworn Statement of True Current and Fair Market Value of the Property

Additionally, you may be required to pay the filing fee, registration fee, and annotation fee.

Remember, your tax declaration isn't a conclusive proof of property ownership, it just shows that you have in fact done your monthly civic duty. A transfer certificate of the title will always be the solid proof of property ownership.

What happens if I don't pay my property taxes on time?

Failing to pay your property taxes on before the indicated due date will result in penalty amounting to a 2% interest of the unpaid amount per month. The maximum amount of interest is 72%, equating to 76 months or 3 years' worth of unpaid real property taxes. So, to avoid high penalties, make sure that you pay your dues on time.

A Responsible Homeowner

A responsible homeowner's duties and obligations aren't just limited to maintaining the upkeep of the property. You still need to fulfill your civic obligations like paying your real property tax promptly yearly. Not only that paying on time will help you dodge hefty penalties but will also make sure your hard-earned properties will remain yours.


Looking for an affordable property? Contact us today

A lot of Filipinos dream of owning their first apartment or house and lot. With today's booming real estate opportunities, there are so many options to choose from.

Here at Vistaland International, we have a roster of affordable property listings from several locations across the country. Whether you're looking for a place to live in Manila, Cebu, Davao and etc, we've got you covered. So contact our real estate agents today!

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Vistaland International was primarily created to bring OFW closer to their dream of finally acquiring a home in the Philippines. And with the rising cost of living in the country, OFWs and their families are looking for ways to earn extra cash flow to support their daily needs. Luckily, you can also join the global network of Vistaland International as a real estate professional and earn a commission!

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Vistaland International Marketing, Inc. (VIMI) is the international marketing division of Vista Land. Aiming to provide OFWs and migrant Filipinos a home in the Philippines, VIMI has established long-lasting relationships with brokers and clients around the world.

Get started with your property investments! Contact us today and follow our social media accounts: Facebook, YouTube, Twitter, Instagram, and LinkedIn.

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