Rental income tax calculator

Rent received per month (all units)Before the 5 % a business tenant may withhold. Add up all your units.PHP

Tax optionThe 8 % option is open up to ₱3 million of rent a year and replaces percentage tax.

Residential units rented for ₱15,000 a month or less eachSuch units pay no VAT or percentage tax. Income tax still applies.

Expenses for the year (itemized only)Repairs, association dues, real property tax, depreciation, loan interest.PHP

Taxable salary from an employer, if anyYearly pay after SSS, PhilHealth, Pag-IBIG and tax-free bonuses. 0 if you have no job.PHP

Tax on your rental income

₱28,000

Effective rate 4.7 %

Rent for the year₱600,000
Tax-free first ₱250,000 under the 8 % option-₱250,000
Income tax on rent above ₱250,0008 %−₱28,000
Rent left after tax₱572,000

An estimate under the rules for the chosen year, for typical cases. It is not tax advice: check the result with the tax office or an adviser before you file.

How it is calculated

Renting out a condo, house or space counts as a business. You register with the BIR and choose between 8 % of gross rent above ₱250,000 or graduated rates on net rental income.

Under graduated rates you deduct either a flat 40 % of gross rent or your actual expenses, such as repairs, dues and real property tax. You also pay 3 % percentage tax on the gross rent unless you are VAT registered.

Residential units rented for ₱15,000 a month or less each are exempt from VAT and percentage tax. Income tax still applies.

If you also have a salary, the 8 % applies to all your rent, with no ₱250,000 exemption. Under graduated rates the rent is taxed on top of your salary.

You are a resident citizen renting out property in your own name.
Monthly rent is the total from all your units, before any 5 % creditable withholding tax a business tenant deducts. That tax counts as an advance payment.
Residential units rented for ₱15,000 a month or less each pay no VAT or percentage tax, whatever the total rent.
Above ₱3 million a year of rent that is not exempt, you must register for VAT and the 8 % option is no longer available. VAT is charged to tenants and not included.
Salary, if any, is your annual taxable compensation after SSS, PhilHealth, Pag-IBIG and tax-free benefits.
Real property tax, documentary stamp tax on the lease and local business permits are not included.
Rates and thresholds are the same in 2025 and 2026.

Questions

How much tax do I pay on ₱50,000 a month of rent?

With the 8 % option, 8 % of ₱350,000, which is ₱28,000 for the year. With 40 % OSD you pay ₱16,500 income tax plus ₱18,000 percentage tax.

Do I pay tax if I rent out one condo unit?

Yes. Rent is taxable from the first peso, though the first ₱250,000 a year is in the zero bracket if you have no other taxable income.

My tenant withholds 5 %. Is that extra tax?

No. It is an advance payment of your income tax. You deduct it in your quarterly and annual returns using the BIR Form 2307 your tenant gives you.

Is residential rent subject to VAT?

Not if each unit rents for ₱15,000 a month or less. Above that, VAT applies only if your total gross receipts are over ₱3 million a year. Below that you pay 3 % percentage tax or choose the 8 % option.

Sources

Now keep it on track Set the result as a budget in Spendee and see each month how much is left.

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