Understanding Property Taxes and Fees in 2025

What Every Buyer and Seller Needs to Know

Property taxes and transaction fees are often overlooked when buying or selling a home—but they can significantly impact your budget. As we move through 2025, new updates, rates, and local changes may affect what you owe.

Here’s a clear breakdown of what you need to know.

What Are Property Taxes?

Property tax is a recurring tax paid by homeowners based on the assessed value of the property. It helps fund local services such as public schools, police, infrastructure, and sanitation.

• Assessed Value: Set by local assessors, often lower than market value.

• Tax Rate: Varies by municipality, often expressed as a percentage or per ₱1,000 of assessed value.

• Due Dates: Typically paid annually or semi-annually.

📍Example (Philippines): Some LGUs base taxes on fair market values set in 1992, but updates may come in 2025 as national valuation reform gains traction.

Who Pays Property Taxes?

• Buyers: Usually not responsible for the full year's tax at closing, but may reimburse the seller for prepaid portions.

• Sellers: Responsible for taxes accrued during their ownership before the sale.

Your closing statement will show how these are prorated.

Common Real Estate Transaction Fees (2025 Edition)

For Buyers:

1. Transfer Tax – Usually 0.5% to 0.75% of the selling price or zonal value (whichever is higher).

2. Registration Fee – Set by the Registry of Deeds (often around 0.25% of the selling price).

3. Documentary Stamp Tax (DST) – 1.5% of the higher of the selling price or zonal value.

4. Notarial Fees – Typically 1% to 2% of property value (may vary).

5. Loan Processing Fees – If applying for a mortgage.

For Sellers:

1. Capital Gains Tax – 6% of the gross selling price or zonal value (whichever is higher).

2. Broker's Commission – Usually around 3% to 5% of the total selling price.

3. Clearance and HOA Dues – Any outstanding dues must be settled before title transfer.

Tips to Save or Plan Ahead

• Ask for an estimate from your agent or lawyer before closing.

• Negotiate who pays for what in the deed of sale (common in Philippine practice).

• Stay updated with new ordinances or tax codes in your area.

2025 Updates to Watch

• Real Property Valuation Reform Act (Philippines) may push for updated zonal values nationwide.

• Some LGUs are shifting toward digital tax systems for easier payments and assessments.

Final Thoughts

Property taxes and real estate fees can add up quickly—but with the right knowledge, they don’t have to be a surprise. Whether you’re buying or selling in 2025, understanding your obligations can help you budget smarter and negotiate better.

If you’re unsure about what applies in your city or municipality, feel free to reach out. I’m here to help you make informed and confident real estate decisions.