7 things to know when selling your property

Selling a property takes more than finding a buyer. Here are 7 things to know before you start, so there are no surprises at the end.

1. The seller pays the capital gains tax

This is the one most sellers don't know about. When you sell land or a house you own as an individual, you pay a 6% capital gains tax. On a ₱3,000,000 sale, that's ₱180,000. It's due within 30 days after the deed is notarized.

2. The tax is based on the highest value

The 6% is computed on the highest of the selling price, the BIR zonal value, or the assessor's market value. Putting a lower price in the deed won't lower your tax.

3. No tax payment, no title transfer

The BIR won't release the paper the buyer needs to transfer the title until the capital gains tax is paid. An unpaid tax can stall the whole sale and add penalties.

4. Your property taxes must be up to date

Pay your real property taxes and get a tax clearance from the treasurer's office. Unpaid taxes can delay the sale.

5. Your title must be clean

You must be the real owner, and any mortgage or claim must be cleared or told to the buyer first. If the owner has passed away, the heirs need to settle the estate before anyone can sell.

6. Everyone who owns it must sign

A married owner usually needs the spouse to sign. Co-owners and heirs must all agree. One missing signature can cancel the sale later.

7. You can sell on your own or with a licensed professional

- On your own: you keep the full price, but you handle the pricing, buyers, paperwork and taxes yourself.

- With a licensed broker or salesperson: they handle the buyers, the paperwork and the tax steps for a commission, which is only paid when the sale closes. Always ask for their PRC license number and get the agreement in writing.

8. A licensed professional gets a commission when your property sells

If you hire a licensed real estate broker or salesperson, you pay them a commission for their work. The good news is you only pay when the sale closes. There’s no sale, no commission.

Here’s what to know:

• It’s a percentage of the selling price. The rate is not fixed by law, so you can discuss it before you start.
• The seller usually pays it, and it’s normally taken from the sale proceeds. Agree on this in writing, so there’s no argument at the closing.
• Get it all in a written agreement. It should state the commission rate, how long the agreement lasts, and what the professional will do for you, like marketing, screening buyers and helping with the paperwork.
• Plan for it in your price. The commission and the capital gains tax both come out of what you receive, so add them up before you decide your asking price.
• Check that they’re licensed. Ask for their PRC license number and check it with the PRC. Only licensed professionals can legally earn a commission on a sale.

Be careful of anyone who asks for money upfront to “start marketing” your property.

Need help selling?

We can guide you from the first inquiry until the title is transferred. You can list your property free to Negros List and we'll find the buyer for you, or contact us with your questions first.

This is general information, not legal or tax advice. Rates and deadlines can change, so confirm with the BIR, your local government office or a lawyer before you sign.