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Rental Income Tax
GLRA Realty — Licensed Real Estate Broker, Metro Manila & Luzon, Philippines
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For Landlords

Rental Income Tax Calculator

Two different taxes land on rent, and the one most landlords have never heard of turns on the rent of each unit rather than on the total. Work out both, and see whether the flat 8% beats the normal rates.

What You Let

Split by rent, because the rules do

A month
Units at this rent
 
A month
Set to zero if not needed
 
Your position
It changes the answer. The first ₱250,000 inside the 8% election belongs to someone whose only income is the business. If you draw a salary you have already had that allowance in the payroll table and cannot claim it twice.
Gross compensation less mandatory contributions, as on your Form 2316.
This only affects the graduated route. The 8% election is on gross receipts and allows no deductions at all.
Repairs, association dues you pay, real property tax, depreciation, insurance, agent's commission, interest on the loan against the property.
A corporate tenant is required to withhold 5% of the rent and remit it for you. It is not an extra tax; it is credited against what you owe.
The rules — change them if they move
A month, per unit
Gross receipts a year
Per cent. Was 1% to June 2023.
Per cent of gross

What You Owe

Both routes, side by side

Total Tax For The Year ₱0
 
 
 
The two routes
Graduated Rates plus business tax
₱0
 
Flat 8% Election  
₱0
 
Where the money goes
Gross rent for the year ₱0
Exempt from business tax ₱0
Counted for business tax ₱0
Business tax ₱0
Income tax ₱0
Already withheld by tenants ₱0
Still to pay ₱0
Kept After Tax ₱0
Effective Rate 0%
Ask Catherine Rental Yield

The Graduated Table

TRAIN rates, effective 1 January 2023 and unchanged for 2026

Annual taxable incomeTax
Not over ₱250,000None
₱250,000 to ₱400,00015% of the excess over ₱250,000
₱400,000 to ₱800,000₱22,500 + 20% of the excess over ₱400,000
₱800,000 to ₱2,000,000₱102,500 + 25% of the excess over ₱800,000
₱2,000,000 to ₱8,000,000₱402,500 + 30% of the excess over ₱2,000,000
Over ₱8,000,000₱2,202,500 + 35% of the excess over ₱8,000,000

The per-unit rule, in one sentence. A residential unit let at ₱15,000 a month or less is exempt from VAT and from the percentage tax however many of them you have and whatever they come to in a year; only the units above that line are counted, and only their receipts are tested against the ₱3,000,000 threshold. Eight units at ₱14,000 bring in ₱1,344,000 a year and carry no business tax at all. Three units at ₱16,000 bring in ₱576,000 and carry percentage tax on every peso.

Once you elect the 8%, you are stuck with it for the year. The election is made on the first quarterly return and is irrevocable for that taxable year. It is also unavailable the moment you are required to register for VAT. Working out the yield before tax? That is the rental yield calculator. Wondering whether the sale of the unit would be vatable? The VAT exemption checker.

A guide, not a tax return. This covers an individual letting residential property. Corporations, mixed residential and commercial buildings, sub-leases, and property held in a partnership are all taxed differently. Whether the 8% election beats the graduated route can also turn on income you have not entered here. The election is irrevocable for the taxable year once made. Have an accountant check the position before you file.