What Is Documentary Stamp Tax (DST)?

Documentary Stamp Tax, or DST, is a tax imposed on documents, instruments, loan agreements, and papers that prove the acceptance, assignment, sale, or transfer of an obligation or right. In Philippine real estate, DST is triggered when a property is sold, donated, or otherwise transferred — whether through a deed of absolute sale, extrajudicial settlement, or donation.

The tax is based on the property’s selling price, fair market value, or zonal value — whichever is highest.

When Do You Need to Pay DST?

DST becomes payable once a document is executed and notarized. For real estate transactions, this usually means immediately after signing a Deed of Sale or other transfer document.

According to the Bureau of Internal Revenue (BIR), DST must be paid within five (5) days after the close of the month when the taxable document was signed. Late payment incurs interest, surcharges, and penalties.

How Much Is the Documentary Stamp Tax?

The DST for real estate transactions is calculated at 1.5% of the property’s selling price, zonal value, or fair market value — whichever is higher.

Example:

• Selling Price: ₱3,000,000
• Zonal Value: ₱3,200,000
• Fair Market Value: ₱2,900,000

In this case, DST would be computed as 1.5% of ₱3,200,000 = ₱48,000.

Who Is Responsible for Paying DST?

By convention, the buyer usually shoulders the DST, but this can be negotiated. In some cases, the parties agree to split it or shift the responsibility to the seller. What matters legally is that the tax is paid — the BIR doesn’t intervene in how the parties divide the cost.

How and Where Do You Pay DST?

DST is paid at the BIR through the following steps:

1. Fill out BIR Form 2000 (Documentary Stamp Tax Declaration).
2. Attach a copy of the notarized deed of sale or deed of donation.
3. Submit a copy of the Certificate Authorizing Registration (CAR) from a previous transaction, if applicable.
4. Pay the DST at an Authorized Agent Bank (AAB) or Revenue Collection Officer in your BIR RDO.

Once paid, the BIR will issue the necessary tax receipt and stamp the documents. These will be required later during title transfer at the Registry of Deeds.

What Happens If You Don’t Pay DST?

Non-payment or delayed payment of DST results in:

• 25% surcharge on the tax due
• 20% annual interest on the unpaid amount
• Complications in title transfer — Registry of Deeds will not process registration without proof of DST payment

DST is non-negotiable. It’s one of the required taxes for real estate transfers in the Philippines alongside Capital Gains Tax and transfer fees and notarial costs.

When Is DST Not Required?

Some transactions are exempt from DST:

• Transfers to government agencies
• Transfer of properties under certain corporate mergers or consolidations
• Transactions below a specific value threshold (very rare)

Always consult a tax advisor or BIR officer to verify if your transaction qualifies for an exemption.

Final Thoughts

Documentary Stamp Tax may seem like just another bureaucratic step, but it plays a crucial role in making your real estate transaction legal and enforceable. It’s a key part of the title transfer process — and skipping it only leads to complications down the line.

If you’re unsure how to navigate DST and other taxes, consider using our BSL Property Consulter to get tailored advice based on your specific transaction.