2025 Guide to Property Taxes and Closing Costs

What Every Homebuyer and Seller Should Know This Year

Whether you're buying your first home or selling a property in 2025, understanding property taxes and closing costs is essential. These expenses can significantly impact your budget and affect your decision-making, so it's important to be informed before entering any transaction.

Here’s a complete breakdown to help you navigate the process with confidence.

What Are Property Taxes?

Property tax is an annual fee homeowners pay to their local government based on the assessed value of their property. These funds go toward public services such as schools, infrastructure, fire departments, and waste management.

How Property Taxes Are Calculated:

• Assessed Value × Local Tax Rate = Annual Property Tax

• In 2025, some cities and counties may reassess property values due to rising home prices, so your tax bill could increase even if tax rates stay the same.

Tip: Before buying, always ask for the most recent property tax bill. This gives you a realistic idea of ongoing costs after closing.

What Are Closing Costs?

Closing costs are the fees and expenses you pay when a real estate transaction is finalized. They typically range from 2% to 5% of the home’s purchase price and can be split between buyer and seller.

Common Closing Costs for Buyers in 2025:

1. Loan Origination Fee – Charged by lenders to process your mortgage (0.5%–1% of the loan)

2. Appraisal Fee – For a professional valuation of the property (₱10,000–₱25,000)

3. Home Inspection Fee – Optional but recommended (₱5,000–₱15,000)

4. Credit Report Fee

5. Title Search and Title Insurance

6. Documentary Stamp Tax – Usually 1.5% of the property’s selling price in the Philippines

7. Transfer Tax – 0.5% to 0.75% depending on the LGU

8. Notarial Fees and Legal Documentation

Closing Costs for Sellers in 2025:

1. Capital Gains Tax – 6% of the property's selling price, zonal value, or fair market value (whichever is higher)

2. Broker’s Commission – Usually 3% to 5% of the selling price

3. Unpaid Property Taxes – If any

4. Realty Tax (Pro-rated)

5. BIR Clearance & Other Local Requirements

Estimate Before You Commit

Before closing on any property:

• Ask your real estate agent or broker for a closing cost worksheet

• Factor in annual property taxes into your long-term budget

• Check if your lender offers any closing cost assistance programs

2025 Changes to Watch

• New property assessment regulations may increase taxes in urban areas

• Digital documentation fees may be added as more LGUs adopt online platforms

• Government incentives may lower some costs for first-time buyers or eco-friendly homes

Final Thoughts

Closing costs and property taxes may seem overwhelming at first—but with the right preparation and a knowledgeable real estate partner, you can avoid surprises and make smarter decisions.

Need help calculating your potential costs or navigating a 2025 transaction? Contact us today for a personalized estimate and expert guidance.