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Principal Residence CGT Exemption
GLRA Realty — Licensed Real Estate Broker, Metro Manila & Luzon, Philippines
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For Sellers Moving House

Selling The Home You Live In

Sell your principal residence, put the proceeds into a new one, and the 6% capital gains tax can fall away entirely. There are four conditions and one of them expires thirty days after the sale.

The Move

The old home, and the new one

The date the deed of sale was notarised. Leave blank for today.
The consideration in the deed
Tax is on the higher of the two. Look it up →
The historical cost of the home you are selling. It does not change the tax on this sale — capital gains tax is on the price, not the gain — but it carries over to the new house and decides the tax on the sale after this one.
The new principal residence
Purchase price, or the cost of building it.
This is the figure the relief turns on, and it is not the same as the cost of the new house. Buying a ₱9,000,000 home with ₱6,000,000 of proceeds and ₱3,000,000 of borrowing means ₱6,000,000 utilised, not ₱9,000,000.
The conditions
Blank if you have not yet. The sworn declaration of intent goes in with Form 1706 within 30 days of the sale.
The relief is available once every ten years.
The rules — change them if they move
Per cent
Months from the sale

What The Relief Is Worth

And whether you still qualify

Capital Gains Tax You Will Pay ₱0
 
 
 
Your two deadlines
 
 
 
 
The numbers
Tax base ₱0
Tax with no relief at all ₱0
Proceeds you are putting in ₱0
Proceeds left over ₱0
Share of the relief you keep 0%
Tax after the relief ₱0
You Save ₱0
New Home's Tax Cost ₱0
The 6% Still Leaves Your Hands escrow
₱0
Even on a fully exempt sale the tax is deposited into an interest-bearing escrow account with an authorised agent bank, not simply waived. It is released back to you once you have shown the BIR that the proceeds went into the new home. Budget for the money being locked up for up to the whole utilisation window.
Ask Catherine Closing Fees

The Four Conditions

All of them, or the relief is lost

ConditionWhat it actually requires
It is your principal residenceThe home you actually live in, as borne out by your address on record with the BIR and on your identification. A second home, a unit you let out, or a property held for investment does not qualify however long you have owned it.
Tell the BIR within 30 daysA sworn declaration of intent to avail, filed with the return within thirty days of the sale. This is the one people lose the relief on, because the other conditions feel far away and this one does not.
Use the proceeds within 18 monthsAcquiring or building a new principal residence. Partial use is allowed and taxed pro rata — it is not all or nothing.
Once every ten yearsCounted from the earlier sale on which you claimed it. Selling twice in eight years means the relief is only available on one of them, so it is worth using it on the larger gain.

Capital gains tax here is not a tax on the gain. It is 6% of the gross selling price or the fair market value, whichever is higher, and it is due whether or not you made money on the sale. Selling at a loss does not reduce it. That is what makes this relief valuable, and it is also why the historical cost of the old home matters — it carries over to the new one and is what the sale after this one gets measured against.

The rest of a sale's costs — documentary stamp tax, transfer tax, registration fees and the broker's commission — are on the closing fees calculator, and the filing deadlines and late penalties are on the BIR deadlines calculator.

A guide to the relief, not a ruling on it. Whether a property is genuinely your principal residence is a question of fact the BIR decides on your records, and the escrow, the documentation and the release procedure are handled by your revenue district office. The figures here assume a straightforward sale by an individual. Get an accountant involved before the thirty days run out, not after — that deadline is the one that cannot be fixed later.