Who will pay for the Deed of sale in the Philippines?

Who Pays for the Deed of Sale in the Philippines?

When buying property in the Philippines, one common question arises: who covers the costs tied to the Deed of Sale, taxes, and title transfer? While there's no strict legal rule that assigns all fees to one party, local practice generally divides responsibilities between buyer and seller.

The buyer typically shoulders major expenses. This includes the documentary stamp tax (DST) and transfer tax, both of which are mandatory fees imposed by the government. The buyer is also responsible for the registration fees with the Registry of Deeds—this is essential to officially record ownership under their name.

On the other hand, the seller usually pays the capital gains tax (CGT), which applies to the profit made from selling the property. If the seller is a corporation or a real estate dealer, value-added tax (VAT) may also apply instead of CGT.

As for the Deed of Sale itself—the legal document that transfers ownership—it’s common for the buyer to cover the cost of preparing and notarizing this document. However, all of this can be negotiated between the parties. In some cases, especially in a buyer’s market, sellers might agree to absorb certain fees to close the deal faster.

It's also worth noting that real estate brokers, if involved, may charge a commission—usually paid by the seller, though this too can vary by agreement.

To avoid confusion, it’s wise for both parties to clearly outline who pays what in the Contract to Sell. A smooth property transfer hinges not just on legal compliance, but on mutual understanding. When in doubt, consulting a trusted real estate lawyer helps ensure a fair and transparent transaction.