When to pay

- The deadline for payment is sixty (60) days from the date of the execution of the deed or from the
date of the decedents death.
*** Surcharges and penalties for late payments (as per section 168 of RA 7160)
o Surcharge No more than twenty-five percent (25%) of the amount of taxes, fees or
charges not paid on time
o Penalty No more than two percent (2%) per month of the unpaid taxes, fees or charges
including surcharges, until such amount is fully paid, but in not to exceed thirty-six (36)
months or seventy-two percent (72%).
Where to pay
- The transfer tax is to be paid at the Treasurers Office of the city or municipality where the property is
located.
Requirements
the requirements for the payment of transfer tax are the following:
Certificate Authorizing Registration from the BIR;
Realty tax clearance from the Treasurers Office; and
Official receipt of the Bureau of Internal Revenue (for documentary stamp tax).
Transfer Tax Rates
You have to check the rates on a per city or per municipality basis as the LGC only provides for the
maximum rates.

Documentary Stamp Tax

There are different DST rates on different types of transactions.
there is DST too on loan agreements, lease agreements, and mortgages, and there are also
exemptions from DST.

DST on the sale of real property

Section 196 of the Tax Code, as amended, provides:
SEC. 196. Stamp Tax on Deeds of Sale and Conveyances of Real Property. On all conveyances,
deeds, instruments, or writings, other than grants, patents or original certificates of adjudication
issued by the Government, whereby any land, tenement or other realty sold shall be granted,
assigned, transferred or otherwise conveyed to the purchaser, or purchasers, or to any other person or
persons designated by such purchaser or purchasers, there shall be collected a documentary stamp
tax, at the rates herein below prescribed, based on the consideration contracted to be paid for such
realty or on its fair market value determined in accordance with Section 6(E) of this Code, whichever is
higher: Provided, That when one of the contracting parties is the Government, the tax herein imposed
shall be based on the actual consideration:
(a) When the consideration, or value received or contracted to be paid for such realty, after
making proper allowance of any encumbrance, does not exceed One thousand pesos (P1,000),
Fifteen pesos (P15.00).
(b) For each additional One thousand pesos (P1,000), or fractional part thereof in excess of
One thousand pesos (P1,000) of such consideration or value, Fifteen pesos (P15.00).
When it appears that the amount of the documentary stamp tax payable hereunder has been reduced
by an incorrect statement of the consideration in any conveyance, deed, instrument or writing subject
to such tax the Commissioner, provincial or city Treasurer, or other revenue officer shall, from the
assessment rolls or other reliable source of information, assess the property of its true market value
and collect the proper tax thereon.
- To compute the DST, divide the higher amount between the selling price and the fair market value by
P1,000.00, then round off the amount to next higher number if there are decimals, then multiply it by

P15.00. As a shortcut, multiply the higher amount between the selling price and the fair market value
by .015 and if the DST is not a multiple of 15, the DST shall be the next higher multiple of 15.
- Take note that if the tax base is incorrect (for example, the selling price or the zonal value is
understated to lower the DST), the true value of the property may be assessed so that the proper tax
may be collected.
DST on loan agreements
If you will be taking out a loan, another type of DST may be imposed. Section 179 of the Tax Code, as
amended, provides for the DST on loan agreements, as follows:
SEC. 179. Stamp Tax on All Debt Instruments. On every original issue of debt instruments, there
shall be collected a documentary stamp tax on One peso (P1.00) on each Two hundred pesos (P200),
or fractional part thereof, of the issue price of any such debt instruments: Provided, That for such debt
instruments with terms of less than one (1) year, the documentary stamp tax to be collected shall be
of a proportional amount in accordance with the ratio of its term in number of days to three hundred
sixty-five (365) days: Provided, further, That only one documentary stamp tax shall be imposed on
either loan agreement, or promissory notes issued to secure such loan.
For purposes of this section, the term debt instrument shall mean instruments representing borrowing
and lending transactions including but not limited to debentures, certificates of indebtedness, due bills,
bonds, loan agreements, including those signed abroad wherein the object of contract is located or
used in the Philippines, instruments and securities issued by the government of any of its
instrumentalities, deposit substitute debt instruments, certificates or other evidences of deposits that
are either drawing interest significantly higher than the regular savings deposit taking into
consideration the size of the deposit and the risks involved or drawing interest and having a specific
maturity date, orders for payment of any sum of money otherwise than at sight or on demand,
promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation.
- DST on loan agreements (which may be taken out in order to purchase real property ) is thus
computed as P1.00 for every P200.00. To compute the DST, divide the loan amount by P200.00, then
round off the amount to next higher number if there are decimals. As a shortcut, multiply the loan
amount by .005 and round off the amount to next higher number if there are decimals.
DST on lease agreements
- If you will be leasing out your property, DST will be imposed at the rate of P3.00 for the first
P2,000.00 and an additional P1.00 for every P1,000.00 in excess of the first P2,000.00 pursuant to
Section 194 of the Tax Code, to wit:
Section 194. Stamp tax on Leases and Other Hiring Agreements. On each lease, agreement,
memorandum, or contract for hire, use or rent of any lands or tenements, or portions thereof, there
shall be collected a documentary stamp tax of Three pesos (P3.00) for the first Two thousand pesos
(P2,000), or fractional part thereof, and an additional One peso (P1.00) for every One Thousand pesos
(P1,000) or fractional part thereof, in excess of the first Two thousand pesos (P2,000) for each year of
the term of said contract or agreement.
To compute DST, multiply the monthly rent by 12 months and then by the number of years stated in
the contract. Subtract P2,000.00 and multiply the amount by .001, then add P3.00.
For example, the monthly rent is P10,000.00, and the contract is for 3 years. The DST is computed as
follows:
Monthly rent P10,000.00
Multiply by 12 months
Annual rent = P120,000.00
Multiply by 3 years
Total contract amount = P360,000.00
Subtract P2,000 = P358,000.00
Multiply this by .001 = P358
Plus P3.00
DST = P361.00

As a shortcut, multiply the contract amount by .001 and add P1.00 to get the DST.
If the total contract amount is not a multiple of P1,000.00, for example, its P360,500.00, round it up to
the next 1,000 then multiply the contract amount by .001 and add P1.00 to get the DST.
DST on mortgages
Section 195 of the Tax Code provides:
Section 195. Stamp Tax on Mortgages, Pledges and Deeds of Trust. On every mortgage or pledge of
lands, estate, or property, real or personal, heritable or movable, whatsoever, where the same shall be
made as a security for the payment of any definite and certain sum of money lent at the time or
previously due and owing of forborne to be paid, being payable and on any conveyance of land, e
state, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be
and intended only as security, either by express stipulation or otherwise, there shall be collected a
documentary stamp tax at the following rates:
(a) When the amount secured does not exceed Five thousand pesos (P5,000), Twenty pesos (P20.00).
(b) On each Five thousand pesos (P5,000), or fractional part thereof in excess of Five thousand pesos
(P5,000), an additional tax of Ten pesos (P10.00).
On any mortgage, pledge, or deed of trust, where the same shall be made as a security for the
payment of a fluctuating account or future advances without fixed limit, the documentary stamp tax on
such mortgage, pledge or deed of trust shall be computed on the amount actually loaned or given at
the time of the execution of the mortgage, pledge or deed of trust, additional documentary stamp tax
shall be paid which shall be computed on the basis of the amount advanced or loaned at the rates
specified above: Provided, however, That if the full amount of the loan or credit, granted under the
mortgage, pledge or deed of trust shall be computed on the amount actually loaned or given at the
time of the execution of the mortgage, pledge or deed of trust. However, if subsequent advances are
made on such mortgage, pledge or deed of trust, additional documentary stamp tax shall be paid
which shall be computed on the basis of the amount advanced or loaned at the rates specified above:
Provided, however, That if the full amount of the loan or credit, granted under the mortgage, pledge or
deed of trust is specified in such mortgage, pledge or deed of trust, the documentary stamp tax
prescribed in this Section shall be paid and computed on the full amount of the loan or credit granted.
To compute DST, subtract P5,000 from the contract amount, then divide whats left by P5,000.00 and
round off any decimal to the higher number. Multiply this by 10 then add P20.00.
To illustrate, if the amount secured is P106,000.00, the DST is computed as follows:
Amount secured P106,000.00
Subtract P5,000 = 101,000
Divide by P5,000.00 = 20.20
Round off to higher number = 21
Multiply by 10 = 210
Add 20 = P230 DST
As a shortcut, divide the contract amount by P5,000.00 and round off any decimal to the higher
number. Multiply this by 10 then add P10.00.