Loans and Promissory Notes
Section 179 of the National Internal Revenue Code (NIRC) taxes every new written promise to pay a debt (a debt instrument): a Loan Agreement, a Promissory Note, a bond. Republic Act No. 12214 (RA 12214), the Capital Markets Efficiency Promotion Act, set the rate at 0.75% of the amount (75% of 1%), and the BIR applies it to loans made from 1 July 2025. Before that, the rate was ₱1.50 for every ₱200 or part of ₱200.
For a loan shorter than one year, the tax is cut in proportion: the number of days divided by 365. A 180-day loan of ₱100,000 carries ₱750 × 180 ÷ 365, or about ₱370. If the same loan has both a Loan Agreement and a Promissory Note, the tax under Section 179 is paid only once. A Real Estate Mortgage may carry its own DST; ask the BIR.
Leases
Section 194, as amended by Republic Act No. 10963 (RA 10963), the TRAIN law, taxes a lease of land or a building at ₱6 for the first ₱2,000 of rent and ₱2 for every further ₱1,000 or part of it, for each year of the term. The calculator works this out on each year's rent and adds the years up. A part of a year at the end is counted as one more year, on the rent for those months.
A two-year lease at ₱20,000 a month has ₱240,000 of rent a year. The tax for one year is ₱6 plus ₱2 × 238, or ₱482, so the lease carries ₱964.
Sales of Land and Buildings
Section 196 taxes deeds of sale, donations and other transfers of land and buildings (conveyances of real property) at ₱15 for every ₱1,000 or part of ₱1,000, about 1.5%. The tax is based on the price or the fair market value, whichever is higher. The BIR uses the zonal value or the assessor's value, whichever is higher, as the fair market value. When the government is a party, the tax is based on the actual price.
Common Questions
How Much Is the Documentary Stamp Tax on a Loan?
0.75% of the loan amount for loans from 1 July 2025, under RA 12214. A ₱100,000 loan for a year or more carries ₱750. Shorter loans pay a share based on the number of days.
Who Pays the Documentary Stamp Tax?
The law lets the BIR collect it from any party who signs, issues, accepts or transfers the document. In practice the borrower usually pays it on a loan. On a sale or a lease, the two sides agree who pays, and buyers often take on the DST of a sale.
When Is the Documentary Stamp Tax Due?
Within 5 days after the end of the month the document was signed or notarized, using BIR Form 2000 (or 2000-OT for a one-time transaction such as a sale of land).
Does a Lease Need Documentary Stamp Tax Even If It Is Not Notarized?
Yes. The tax is on the Lease Agreement itself, written or notarized or not. A notarized lease is easier to prove, and the BIR may ask for the DST payment when it reviews the owner's rental income.
Not legal advice. This is general information. For advice on your own situation, consult a lawyer. If you cannot afford one, the Public Attorney's Office (PAO) or an IBP legal aid office may help for free.
This is an estimate to help you plan. The BIR, the city or municipal treasurer or the Registry of Deeds works out what you actually pay. Government fees, rules and requirements change, so always check with the office concerned before you go.