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GLRA Realty
VAT Exemption Checker
GLRA Realty — Licensed Real Estate Broker, Metro Manila & Luzon, Philippines
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For Buyers, Sellers And Developers

Is This Sale VAT-Exempt?

Twelve per cent is a large number on a property. Whether it applies turns on what is being sold and who is selling it, not only on the price — and a bare residential lot lost its own exemption in 2021.

The Sale

Who is selling matters as much as what

This is the first question, not the price. VAT only reaches property sold in the ordinary course of trade or business. A private owner selling a house they lived in is outside VAT entirely.
 
The consideration in the deed of sale.
Leave at zero if you do not know it. Where VAT applies it is charged on the higher of the price and this figure. Look up the BIR zonal value →
Combined price of any adjacent lots or units sold to the same buyer within twelve months. The BIR treats these as one sale, so two units at 2 million each are tested as a 4 million sale, not as two exempt ones.
The rules — change them if they move
RR 1-2024. Indexed every three years.
Per cent

The Answer

And the rule it turns on

Verdict —
 
 
 
Selling price ₱0
Tested against the threshold ₱0
VAT charged on ₱0
VAT at 12% ₱0
Buyer pays ₱0
The Threshold Is A Cliff  
 
 
Ask Catherine Closing Fees

The Rules In One Table

Assuming the seller is in the business of property

What is soldVAT positionWhere it comes from
House and lot, condominium, other residential dwellingExempt at ₱3,600,000 or belowSec 109(P), threshold set by RR 1-2024
Residential lot with no house on itVatable at any priceIts separate exemption ended 1 Jan 2021 under TRAIN
Parking slot, sold on its own or alongside a unitVatable at any priceNot a residential dwelling — RR 16-2011
Commercial, industrial or office propertyVatable at any priceNo residential exemption applies
Lease of a residential unitExempt at ₱15,000 a month or belowSec 109(Q), per unit, whatever the yearly total
Property sold by an owner not in the businessOutside VAT — 6% capital gains tax insteadA capital asset, not stock in trade

Two things this page does not decide for you. A seller in business whose gross annual sales stay under ₱3,000,000 may register as non-VAT and pay percentage tax instead, which changes the answer for a small lessor or an occasional dealer. And socialised and economic housing under the housing laws carry their own reliefs. Both are worth an accountant's half hour before you price anything.

Renting rather than selling? The lease side is worked out in full on the rental income tax calculator, which handles the ₱15,000 per-unit line and the 8% option together.

A guide to the rule, not tax advice. Whether a seller is "engaged in business" is a question of fact the BIR decides on the whole picture, not on a dropdown. The threshold is re-indexed to the consumer price index every three years and has moved twice since 2018. Socialised and economic housing, installment sales, and sellers below the ₱3,000,000 registration threshold all have their own treatment. Confirm with your accountant or the BIR before you price, sign or file anything.