How Refinancing Works

Closing costs are the fees and expenses paid when a property sale is finalized. These are paid by both the buyer and the seller, and they can significantly affect how much you pay—or take home.

🧠 Simple Definition

👉 Closing Costs = All fees needed to complete the sale and transfer ownership

🏡 Seller Closing Costs (Philippines)

💸 Typical Seller Expenses:

• Capital Gains Tax (CGT) – 6% of selling price or zonal value (whichever is higher)

• Real Estate Agent Commission – usually 3%–5%

• Unpaid Property Taxes (if any)

• Documentary requirements / misc. fees

📊 Example (Seller)

Selling price: ₱3,000,000

• CGT (6%) = ₱180,000

• Agent (5%) = ₱150,000

👉 Total costs ≈ ₱330,000👉 Net proceeds ≈ ₱2,670,000 (before other minor fees)

🏢 Buyer Closing Costs (Philippines)

💸 Typical Buyer Expenses:

• Documentary Stamp Tax (DST) – 1.5%

• Transfer Tax – ~0.5%–0.75% (depends on city)

• Registration Fee – ~0.25%

• Notarial Fees

• Loan-related fees (if financing)

📊 Example (Buyer)

Purchase price: ₱3,000,000

• DST (1.5%) = ₱45,000

• Transfer Tax (0.75%) = ₱22,500

• Registration = ~₱7,500

👉 Total ≈ ₱75k–₱100k+

⚖️ Buyer vs Seller (Quick Comparison)

Cost Type	Seller 💸	Buyer 💸
Capital Gains Tax	✅ Yes	❌ No
Documentary Stamp Tax	❌ No	✅ Yes
Transfer Tax	❌ No	✅ Yes
Agent Commission	✅ Yes	❌ No
Registration Fees	❌ No	✅ Yes

⚠️ Important Notes

• In the Philippines, costs are negotiable

  
  

  👉 Sometimes buyers and sellers agree to split certain fees

• Always check:

  • Who pays what (in the contract)

  • Any hidden or unpaid obligations

💡 Hidden / Extra Costs to Watch

• Loan processing fees (bank or Pag-IBIG Fund)

• Title transfer assistance fees

• Tax clearance / certificates

• HOA dues (if condo/subdivision)