The Short Answer
By law, the seller pays the 6% capital gains tax, the local transfer tax, and the costs of making and registering the deed, unless the two of you agree otherwise. In practice, many sales split it: the seller pays the capital gains tax, and the buyer pays the 1.5% documentary stamp tax, the transfer tax and the registration fees. Whatever you agree, put it in the Deed of Sale, because the BIR and the city or province will want the taxes paid in full no matter who agreed to pay.
Example: A House and Lot in Lipa City, Batangas
Names and details in this example are made up.
Ramon and Elvie Castillo sell their house and lot in a barangay of Lipa City, Batangas, to Dennis Aquino for ₱2,500,000. Elvie works as a nurse in Riyadh, so she signs a Special Power of Attorney for Ramon at the Philippine Embassy. The BIR zonal value of the property is ₱2,000,000 and the fair market value in the Tax Declaration is ₱1,200,000. They agree on the usual split: the sellers pay the capital gains tax, and Dennis pays the rest.
| Item | How It Is Worked Out | Amount | Who Pays Here |
|---|---|---|---|
| Capital gains tax | 6% of ₱2,500,000 (the highest of price, zonal value and Tax Declaration value) | ₱150,000 | Ramon and Elvie |
| Documentary stamp tax | ₱15 for every ₱1,000 of ₱2,500,000 | ₱37,500 | Dennis |
| Local transfer tax | Up to 0.75% of ₱2,500,000 in a city; Lipa's own ordinance sets the exact rate | up to ₱18,750 | Dennis |
| eCAR (the BIR's certificate that lets the title move) | ₱100 certification fee and ₱30 DST on each eCAR | ₱130 | Dennis |
| Registration at the Registry of Deeds | Set by the LRA's table of fees, based on value | Ask the Registry | Dennis |
| Notarizing the deed | This site's estimate is 2% to 3% of the price; actual fees vary | ₱50,000 to ₱75,000 | Agreed in the deed |
The deed says, in one line: "The capital gains tax shall be paid by the SELLERS, and the documentary stamp tax, transfer tax and registration fees by the BUYER." Ramon pays the capital gains tax within 30 days of notarization. Dennis pays the documentary stamp tax by the 5th of the next month and the transfer tax within 60 days of the deed.
What if the deed said nothing? Then the law's default applies: the sellers would bear the transfer tax and the costs of making and registering the deed, and Dennis could refuse to pay them.
What if the price was "net to seller"? Some sellers quote a price "net of taxes", meaning they want the full ₱2,500,000 in hand. Then the buyer pays everything, including the capital gains tax. Make sure the deed says so in plain words.
What the Law Says
| Cost | Rate or Amount | Who Pays If the Deed Says Nothing |
|---|---|---|
| Capital gains tax (CGT) | 6% of the selling price, zonal value or Tax Declaration value, whichever is highest | Seller. It is a tax on the seller's gain from the sale. |
| Documentary stamp tax (DST) | ₱15 for every ₱1,000 (1.5%), on the same amount | The Tax Code makes the parties who sign the deed liable. The BIR does not release the eCAR until it is paid. |
| Local transfer tax | Up to 0.5% in provinces, up to 0.75% in cities | Seller, under Section 135(b) of the Local Government Code, Republic Act No. 7160 (RA 7160) |
| Notarizing and registering the deed | Notary's fee; Registry of Deeds fees | Seller, under Article 1487 of the Civil Code: "the expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary" (in plain words: the seller pays for making and registering the deed, unless you agree otherwise) |
A capital asset here means land or a house not used in a business, such as a family home or an idle lot. If the seller is a developer or uses the property in business, different taxes apply (creditable withholding tax and possibly VAT). Ask the BIR which applies.
Government fees can change. Always check the current amount with the office before you pay. Last checked October 8, 2026.
What Buyers and Sellers Usually Agree
The most common arrangement is: the seller pays the capital gains tax, and the buyer pays the documentary stamp tax, transfer tax and registration fees. This is only a habit, not a rule. Other deals are just as legal:
- the seller pays everything, as the law's default;
- the buyer pays everything, when the price is "net to seller";
- each pays half of everything.
The Deed of Absolute Sale template has a line for this. Fill it in before you sign.
Deadlines, Whoever Pays
- CGT: BIR Form 1706, within 30 days after the deed is notarized.
- DST: BIR Form 2000-OT, within five days after the end of the month the deed was notarized.
- Transfer tax: at the provincial or city treasurer's office, within 60 days from the date of the deed.
Late payment adds surcharges, interest and penalties. The BIR will not issue the eCAR, and the Registry of Deeds will not transfer the title, until everything is paid. So a buyer who agreed to pay nothing can still be stuck with no title if the seller does not pay their part. Many buyers hold back part of the price until the seller shows the CGT receipt.
For the steps and papers, see taxes and fees when you sell land or a house.
Do Not Lower the Price in the Deed
Some people write a lower price in the deed to cut the taxes. It does not work the way they hope: the BIR taxes the highest of the price, the zonal value and the Tax Declaration value anyway. It also leaves the buyer with a deed that shows less than they paid, and a false statement in a document signed before a notary. Write the true price.
Common Questions
Sino Talaga ang Dapat Magbayad ng Capital Gains Tax, Buyer o Seller?
The seller, unless you agree otherwise. It is a tax on the seller's gain. If the buyer agrees to pay it, for example in a "net to seller" deal, write that in the deed.
The Buyer Agreed to Pay the Transfer Tax but Did Not. Am I Still Liable as Seller?
The Local Government Code puts the duty to pay the transfer tax on the seller, so the treasurer can look to you. Your agreement with the buyer lets you go after the buyer for it. That is why many sellers ask for proof of payment before handing over the Owner's Duplicate Title.
Who Pays the Unpaid Amilyar (Real Property Tax) on the Land?
The Registry of Deeds asks for a Tax Clearance, so any unpaid amilyar must be settled before the transfer. Usually the seller pays what was due while they owned it, but agree on it and write it down. See real property tax.
Is the Notary's Fee Part of the Taxes?
No. It is paid to the notary, separately. By law it is part of the seller's costs of making the deed unless you agree otherwise. See what notaries charge for a Deed of Sale.
Can I Compute the Taxes Myself Before We Agree on a Price?
Yes. Use the property sale costs calculator with the price, the zonal value and the Tax Declaration value. For the stamp tax alone, use the documentary stamp tax calculator.
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.
Government fees, rules and requirements change, so always check with the office concerned before you go. This page explains the general rules; it cannot tell you how they apply to your own family or case. Last reviewed October 8, 2026.