Philippines – Property Letting

How does the property letting process work in the Philippines?

The general sequence for letting a property in the Philippines will feel familiar to many landlords: advertise the unit, screen prospective tenants, execute a written lease, collect the deposit and advance rent, then hand over possession. Even so, every stage of this process is shaped by two key pieces of legislation — the Rent Control Act of 2009 (Republic Act 9653), which governs rent increases on lower-value residential properties, and the Civil Code of the Philippines (Articles 1654–1688), which sets out the broader framework for lease relationships.

Property portals such as Lamudi and Property24, social media channels, and personal referrals are the most common advertising routes. The Philippines does not maintain a centralised tenancy register comparable to, say, Scotland’s Private Residential Tenancy register, so landlords are not required to log individual tenancies with a government database at the point of letting. However, the rental activity itself must be registered with the BIR — this is covered in the registration section below.

Tenant screening is at the landlord’s discretion. Most landlords request proof of income, at least one valid government-issued identification document, and references from former landlords or employers. No standardised national tenant referencing scheme currently exists in the Philippines.

All tenancy terms should be set out in a signed written agreement. Oral arrangements, which may carry weight in some common-law jurisdictions, are strongly inadvisable in the Philippine context; a written contract is the primary — and often only — reliable evidence of a tenancy’s existence and agreed terms. Both parties should retain a signed original.

A standard Philippine lease agreement will ordinarily address: the full address and description of the property, the agreed monthly rent, the duration of the tenancy (commonly one year with an option to renew), deposit and advance rent amounts, subletting restrictions, permitted uses of the property, and the circumstances that allow for early termination. Rent is generally due within the first five days of each month unless the contract specifies otherwise, and any variation to payment timing should be clearly documented by mutual agreement.

Where a tenanted property is sold or mortgaged, the incoming owner is bound by the terms of any existing lease. Tenants cannot be required to leave until that lease has run its course, giving occupants meaningful stability during ownership transitions. Landlords contemplating the sale of a tenanted property should factor this obligation into their planning.

What types of rental arrangements are available in the Philippines — long-term, short-term, and holiday lets?

The most prevalent and comprehensively regulated form of letting in the Philippines is the long-term residential lease — typically a one-year agreement, renewable by mutual consent. These arrangements are governed chiefly by the Rent Control Act for lower-value units and by the Civil Code for higher-value or commercial properties.

Short-term and holiday lets — including those listed on platforms such as Airbnb and Vrbo — occupy a less clearly defined regulatory space. Establishments such as hotels and motels, and units used primarily for commercial purposes, fall outside the scope of the Rent Control Act. This means that short-term rentals operating on a commercial basis are generally not subject to rent control, though they carry other legal obligations.

Under Philippine tax law, the lease of real property constitutes a sale of services and may therefore be liable for VAT or Percentage Tax. For BIR purposes, a “residential unit” encompasses apartments, houses, and lots used as dwelling places, as well as individual units within buildings used exclusively for residential purposes. Hosts listing properties on platforms such as Airbnb are consequently required to register with the BIR and meet tax filing obligations in exactly the same manner as conventional landlords.

Local government units (LGUs) — including barangays, municipalities, and cities — may layer their own licensing or business permit requirements on top of national rules for short-term rental operators. These requirements differ substantially from one locality to another. Landlords operating in popular destinations such as Boracay, Palawan, or Metro Manila should verify the current rules directly with the relevant LGU. In addition, homeowners’ associations (HOAs) within condominium developments may impose their own restrictions on short-term letting, effectively prohibiting Airbnb-style arrangements in certain buildings.

What rental income can landlords expect in the Philippines, and how are rates set?

For most of the Philippine rental market, prices are determined by supply and demand. However, a sizeable lower-value segment is subject to statutory controls. Republic Act 9653 — also referred to as the Act Establishing Reforms in the Regulation of Rent of Certain Residential Units — plays a central role in shaping the national rental landscape by protecting tenants from unreasonable increases.

In the National Capital Region (NCR, or Metro Manila) and other highly urbanised cities such as Cebu City and Davao City, the Act covers residential units with a monthly rent of ₱10,000 or below. In municipalities and less urbanised cities, it applies to units with a monthly rent of ₱5,000 or below.

The permissible annual rent increase is reviewed and published by the National Human Settlements Board (NHSB) each year. As of 2025, the NHSB has fixed the maximum rent increase at 2.3% for residential units with a monthly rate of ₱10,000 or less, with effect from 1 January to 31 December 2025, pursuant to NHSB Resolution No. 2024-001. This represents a reduction from the 4% cap in force during 2024. From 2026, a 1% ceiling will apply to units still occupied by the same tenants as at 2025 and paying ₱10,000 or less per month; units with rents above ₱10,000 per month in 2025 are excluded from the 2026 cap.

When a unit becomes vacant — whether because a tenant has moved on or been evicted — the landlord may set the opening rent for the next occupant without restriction, so long as it remains within the applicable coverage threshold to attract future controls. In other words, the rent cap binds only continuing tenancies, not new ones.

For units above the rent control threshold, market forces govern pricing freely. Prime Metro Manila locations such as Makati, BGC, and Ortigas command considerably higher rents than outlying or coastal areas like Cavite or Batangas. Landlords should consult the Department of Human Settlements and Urban Development (DHSUD) website for the most recent annual rent cap resolutions, which are updated each year.

Do landlords need to provide a furnished or unfurnished property in the Philippines?

Philippine law imposes no statutory obligation on landlords to let a property in a furnished state. Whether a unit is offered furnished or unfurnished is a commercial decision to be reached by agreement between landlord and tenant. That said, market expectations differ considerably by property type and location.

Urban rental properties — particularly condominium units in Metro Manila and other city centres — are commonly let semi-furnished or fully furnished, with appliances and basic furniture included. Properties in provincial areas and lower-cost markets are more often offered with minimal or no furnishings. For tenants, well-maintained furnishings can reduce move-in costs and simplify the transition; landlords who provide quality fixtures often find their units more attractive to prospective occupants.

Regardless of the furnishing level, landlords should thoroughly document the property’s condition before the tenancy begins. A detailed inspection at the outset — covering walls, floors, lighting, appliances, plumbing, and any furniture provided — with photographs and a written acknowledgment signed by both parties, helps prevent future disagreements about damage or wear and tear.

Current Philippine law does not maintain a separate tax classification or regulatory category based on whether a property is let furnished or unfurnished. However, higher rents attributable to a furnished offering may determine whether a unit falls within or above the rent control threshold. Landlords letting premium furnished units at more than ₱10,000 per month in Metro Manila are outside the rent control regime and therefore retain greater freedom over pricing and future rent adjustments.

Do you need a licence or registration to let a property in the Philippines?

The Philippines does not operate a single national landlord licensing scheme comparable to, for instance, the system in Wales where every private landlord must register with Rent Smart Wales before letting. Nevertheless, several registration and compliance obligations are effectively compulsory.

Any landlord earning income from a Philippine property is required to register that rental activity with the Bureau of Internal Revenue (BIR), obtain a Tax Identification Number (TIN), issue official receipts to tenants, and file and pay the applicable taxes. Failing to do so exposes the landlord to BIR penalties and potential back-tax assessments.

At the local level, landlords whose rental activities constitute a business — in particular those letting multiple units or running short-term holiday lets — may need to obtain a Mayor’s Permit (also known as a Business Permit) from the relevant city or municipal government. Any entity conducting business is expected to hold a valid business permit. Requirements and fees differ between localities, and landlords should liaise directly with their local city or municipal hall to determine what applies to their situation.

DHSUD is currently piloting an online Rent Registry that will require landlords of covered units to declare rent levels, deposits, and increases, with QR-coded compliance certificates to be displayed on request during inspections. Full rollout is targeted for 2026. Landlords of units within the Rent Control Act’s coverage should keep a close eye on developments and be ready to register when the system becomes mandatory. The DHSUD website provides the most current information.

Foreign nationals who own property in the Philippines — generally condominium units, given that outright land ownership by foreigners is prohibited — face the same BIR and LGU registration requirements as resident landlords. Non-residents managing property from abroad encounter additional considerations concerning tax withholding, which are addressed in the remote management section below.

How do you register as a landlord or obtain required approvals in the Philippines?

The steps below outline the process for registering a rental activity and achieving compliance before letting a property in the Philippines. Fees and specific procedures are subject to change; always confirm current requirements with the Bureau of Internal Revenue (BIR) and your local government unit before proceeding.

1. Obtain a Tax Identification Number (TIN): If you do not yet hold a TIN, apply at the Revenue District Office (RDO) that has jurisdiction over your property’s location. Foreign nationals will be required to produce their passport and relevant visa documentation. If you already hold a TIN from prior employment or other taxable activities, you will need to update your BIR registration to add your rental income activity.
2. Register your rental business with the BIR: Complete BIR Form 1901 (for individuals) or BIR Form 1903 (for corporations and partnerships). Supporting documents include a copy of your lease contract or evidence of property ownership, a valid government ID, and proof of address. This registration formally recognises you as a self-employed individual or entity earning rental income.
3. Pay the BIR annual registration fee: As of 2025, the annual BIR registration fee stands at ₱500. Confirm the current amount with the BIR, as this figure may be revised. Payment can be made at an Authorised Agent Bank (AAB) or through the BIR’s eFPS online platform.
4. Secure a Mayor’s Permit / Business Permit from your LGU: Where your rental activity qualifies as a business under local rules, apply for a business permit at the relevant city or municipal hall. Required documents typically include your BIR Certificate of Registration, evidence of property ownership or a copy of the lease, and a barangay clearance. Requirements, fees, and processing timelines vary by location — confirm with your specific LGU.
5. Register with the DHSUD Rent Registry (if applicable): DHSUD is piloting an online Rent Registry that will require landlords of covered units to declare rent levels, deposits, and increases, with full rollout expected in 2026. Once operational, landlords of units within the Rent Control Act’s coverage will need to register through the DHSUD platform. Monitor the DHSUD website for registration deadlines and requirements.
6. Issue official receipts to tenants: Following BIR registration, you are obliged to issue BIR-accredited official receipts for every rental payment you receive. You may apply for a printed receipt booklet through an accredited BIR printer or adopt an approved electronic receipting system. Failing to issue official receipts constitutes a BIR violation and can result in penalties.

What are the rules around deposits in the Philippines?

The Rent Control Act establishes specific limits on deposits for units falling within its scope. Landlords are permitted to collect no more than two months’ deposit and no more than one month’s advance rent. The law further requires that deposit funds be held in a bank account registered in the landlord’s name for the entire duration of the tenancy. This requirement shares the spirit of deposit protection mechanisms found in other markets, but the Philippines does not currently operate a government-backed tenancy deposit protection scheme equivalent to those in the United Kingdom or Ireland — the obligation to safeguard funds rests squarely with the individual landlord.

Demanding more than one month’s advance rent and a two-month deposit is unlawful under the Rent Control Act. Beyond the cap, the deposit must earn interest while held in the bank, and that accrued interest must be returned to the tenant alongside the principal deposit when the tenancy ends. Tenants are therefore entitled not only to the return of their deposit but also to any interest it has generated.

Landlords may draw on the deposit and advance rent to recover losses arising from unpaid rent, outstanding utility charges, or damage caused to the property. To support any legitimate deduction, landlords should document the property’s condition at both the start and end of the tenancy — ideally through photographs and a written inventory signed by both parties.

For properties that fall outside the Rent Control Act’s coverage — that is, units with monthly rents above ₱10,000 in Metro Manila — deposit terms are largely a matter of contractual negotiation. Even so, landlords should bear in mind that courts may apply principles of fairness when resolving disputes over uncommonly large deposit requirements. Consult the DHSUD for the rules applicable to your property’s rent level and location.

Who is responsible for maintenance and repairs in the Philippines?

The Civil Code of the Philippines provides the fundamental framework for maintenance responsibilities, supplemented by the Rent Control Act for units within its scope. The overarching principle is that landlords bear responsibility for major structural works and for keeping the property habitable, while tenants are accountable for routine day-to-day upkeep.

A landlord is required to hand over a property that is safe, sanitary, and genuinely suitable for residential occupation. Any significant repair that compromises the tenant’s safety or comfort must be addressed without unreasonable delay. Issues such as burst or blocked plumbing, roof damage causing water ingress, and defective electrical wiring fall squarely within the landlord’s obligations.

If a landlord refuses to carry out necessary repairs or otherwise fails to ensure the tenant’s peaceful and adequate enjoyment of the property, the tenant has the right to withhold rent. This is a significant tenant remedy — unlike some legal systems where rent withholding requires a prior court order, Philippine law grants this protection directly to tenants and landlords should be aware of the risk it creates.

The Philippines does not currently enforce a detailed national statutory inspection and certification regime for private rental properties comparable to the UK’s Decent Homes Standard for social housing or Ireland’s Minimum Standards for Rental Accommodation regulations. However, the general habitability obligation under the Civil Code carries genuine legal force, and tenants who find their landlord unresponsive to repair requests may pursue remedies through the barangay justice system or the civil courts.

Tenants are expected to treat the property with reasonable care and to notify the landlord promptly of any defects that emerge during the tenancy. A tenant who arranges necessary repairs themselves — after giving due notice of the problem and receiving no response from the landlord — may be entitled to deduct those costs from rent, though this step is best taken with legal advice.

How are letting agents used in the Philippines, and what do they charge?

Letting agents and property management firms are a common feature of the Philippine rental market, particularly in Metro Manila, Cebu, and other major urban centres. Their services typically encompass advertising the property, arranging viewings, vetting potential tenants, drafting lease agreements, collecting rental payments, coordinating repairs and maintenance, and acting as the primary point of contact for tenant queries. For landlords who are absent or based overseas, a full-service property management arrangement is especially useful.

Unlike the United Kingdom, where the Tenant Fees Act 2019 prohibits agents from levying most charges on tenants, the Philippines has no equivalent national law restricting which party an agent may charge. In practice, the prevailing custom is for the landlord to pay the letting agent’s fee — ordinarily equivalent to one month’s rent as a placement or finder’s commission. Arrangements differ between agencies and locations, however, and all fee structures should be confirmed in writing before engaging an agent.

For ongoing property management rather than a one-off placement service, management companies typically levy a monthly fee of around 5–10% of the monthly rent, as of 2025. These rates are entirely market-driven and are not governed by any regulatory body. Landlords are advised to obtain quotes from several agencies and to verify prevailing rates, since fees can vary substantially depending on the scope of services offered, the type of property, and its location. Selecting a reputable, well-established agency requires careful due diligence, as there is no government authority setting or capping management fees in the Philippines.

When engaging a letting agent or property manager, foreign landlords should verify that the firm is appropriately registered with the Human Land Use and Regulatory Board (HLURB) or the Professional Regulation Commission (PRC) as applicable, and that individual agents conducting leasing brokerage hold a valid PRC Real Estate Broker licence.

What taxes apply to rental income in the Philippines?

Rental income derived from Philippine property is taxable irrespective of whether the landlord resides in the Philippines or abroad, and regardless of where the landlord is physically located when the income is earned. The taxation of rental income in the Philippines is governed by specific provisions of the National Internal Revenue Code (NIRC), as amended by the TRAIN Law and the CREATE Act.

Resident individuals and resident aliens: Rental income earned by resident citizens and resident aliens is subject to the progressive graduated income tax schedule, with a standard rate of 25% applying at higher income levels. Resident individual landlords may alternatively elect the 8% flat tax on gross receipts if their total annual income falls below ₱3,000,000 and they satisfy the relevant BIR conditions. Allowable deductions against rental income include depreciation, ordinary maintenance and repair costs, real property taxes, mortgage interest, and agent fees, provided all expenditure is supported by official receipts.

Non-resident alien landlords: Non-resident aliens who are not engaged in trade or business in the Philippines (NRA-NETB) are taxed at a flat 25% on their gross Philippine-sourced rental income, with no deductions permitted against the gross amount. Non-resident aliens engaged in trade or business in the Philippines (NRA-ETB) are taxed on Philippine-sourced income at the applicable graduated rates. Where the Philippines has concluded a double taxation agreement with the landlord’s country of residence, treaty provisions may reduce the withholding rate on rental payments, so non-resident landlords should seek specialist advice on applicable treaty benefits.

Withholding tax: The Philippines operates a Creditable Withholding Tax (CWT) system under which tenants may be required to withhold a portion of each rental payment and remit it directly to the BIR on the landlord’s behalf. Individual tenants renting a property solely for personal residential use are generally not obliged to withhold, unless they are classified as a Top Withholding Agent by the BIR.

VAT and Percentage Tax: In addition to income tax, rental income may attract consumption taxes. A 12% VAT applies where the landlord’s total annual gross sales or receipts exceed ₱3,000,000. Residential units with a monthly rent of ₱15,000 or below are exempt from VAT regardless of aggregate annual rentals. Landlords whose annual gross receipts do not exceed ₱3,000,000 are instead liable for a 3% Percentage Tax. All figures above are as of 2025; given the complexity of the tax rules — particularly for foreign nationals — always consult the Bureau of Internal Revenue (BIR) and a qualified Philippine tax adviser to confirm current rates and obligations.

What are the rules around ending a tenancy or evicting a tenant in the Philippines?

Philippine law provides tenants with robust protections against eviction, and landlords are required to follow a formal legal process when seeking to terminate a tenancy. Eviction requires a court filing — there is no provision for “self-help” measures such as changing locks, disconnecting utilities, or removing a tenant’s belongings. Landlords who resort to such tactics expose themselves to criminal liability.

The Rent Control Act limits the grounds on which a landlord may seek eviction to the following: the tenant subletting part or all of the unit to another party without the property owner’s written consent; rental arrears of three months or more; the owner’s bona fide need to use the property for their own or a family member’s residential occupation (in which case eviction can only be enforced after the lease term has expired); and the expiry of the lease contract itself.

Where the landlord’s grounds for repossession are personal or family residential need, a minimum of three months’ advance written notice must be given to the tenant. In such circumstances, the departing tenant must be granted first right of refusal to re-lease the unit if it becomes available for letting again.

Once a court case has been filed, the landlord may apply within ten days for a permit to reclaim possession of the property. The court is then required to issue a decision within thirty days. If the ruling favours the landlord, the Court Sheriff assists in recovering possession. In practice, the Philippine court system can be slow, and contested eviction cases may take considerably longer than the statutory thirty-day target. This is an important practical consideration for landlords accustomed to more expedient frameworks, and adequate time should be factored into any planning around property recovery.

Until a valid court eviction order has been obtained, landlords may not alter locks or restrict a tenant’s access to their home. Deliberately cutting off electricity, water, or other services to compel a tenant to vacate is unlawful and reportable to the authorities. Before court proceedings are commenced, both parties are encouraged to seek an amicable resolution through the Barangay Justice System’s mediation process — only where barangay mediation fails will the matter ordinarily be referred to the courts.

What should expat landlords know about managing property remotely in the Philippines?

Overseeing a Philippine rental property from overseas is entirely feasible, but it demands careful structuring to maintain legal and tax compliance. The most essential practical measure is engaging a reliable, locally based property manager or executing a power of attorney (POA) that authorises a local representative to act on your behalf in all matters relating to leasing, maintenance decisions, and dealings with the BIR and LGU.

The standard legal instrument for this purpose in the Philippines is a Special Power of Attorney (SPA). This document must be notarised — and if executed abroad, it is typically also required to be authenticated (apostilled or consularised) before Philippine authorities will recognise it. The SPA should expressly authorise the representative to collect rent, execute or renew leases, instruct repairs and maintenance, and interact with government agencies on the landlord’s behalf.

Both resident and non-resident landlords who earn income from renting out Philippine property are subject to tax obligations. Non-resident landlords who are not engaged in trade or business in the Philippines are liable for a flat 25% final withholding tax on gross rental income, as of 2025. Under the creditable withholding tax system, the tenant is often required to withhold a portion of the rent and remit it to the BIR on the landlord’s behalf — making it critical that both the lease agreement and any property management arrangement explicitly account for this withholding mechanism.

Outright land ownership in the Philippines is reserved for Philippine citizens and corporations in which at least 60% of equity is held by Filipinos. Foreign investors may participate in a Philippine corporation, but their stake cannot exceed 40% of total capital. However, a foreign national may own a condominium unit or townhouse where the underlying land is owned by a Filipino or a qualifying Filipino-majority corporation. As a practical consequence, most expatriate landlords will be letting condominium units rather than standalone houses on land.

Repatriation of rental income is generally permitted under Philippine foreign exchange regulations, but all transactions should be thoroughly documented. Landlords should consult current Bangko Sentral ng Pilipinas (BSP) guidelines and take advice from a local financial specialist before making significant outward remittances. Where a double taxation agreement between the Philippines and the landlord’s country of residence is available, the relevant treaty benefits should be proactively claimed through the BIR to avoid excess withholding tax being deducted at the standard rate.

Frequently asked questions about letting property in the Philippines

Can a foreign national own and let property in the Philippines?

Foreign nationals may own condominium units or a townhouse in the Philippines, provided the land on which the building stands is owned by a Filipino citizen or a corporation with at least 60% Filipino equity. Direct land ownership by foreigners is not permitted. Foreign owners of qualifying condominium units may legally let those units to tenants and are subject to the same rental legislation and BIR tax obligations as resident landlords, as of 2025.

What is the Rent Control Act, and does it apply to my property?

Republic Act 9653, commonly known as the Rent Control Act of 2009, regulates residential rentals across the Philippines and protects tenants from disproportionate rent increases. In Metro Manila and other highly urbanised cities, the Act covers units with a monthly rent of ₱10,000 or below; in municipalities and less urbanised cities, the threshold is ₱5,000 per month. Units with rents above these amounts are not subject to rent increase controls, as of 2025.

How much can I increase the rent each year in the Philippines?

As of 2025, the NHSB has set the maximum permissible rent increase at 2.3% for residential units with a monthly rate of ₱10,000 or less, effective from 1 January to 31 December 2025. Units with rents exceeding ₱10,000 per month are not subject to this restriction. The ceiling is reviewed annually — consult the DHSUD website for the most current figure.

How much deposit can I charge a tenant in the Philippines?

Under the Rent Control Act, landlords of covered units may collect no more than two months’ deposit and no more than one month’s advance rent. The deposit must be held in a bank account in the landlord’s name for the full duration of the tenancy, and any interest accrued must be returned to the tenant at the end of the lease. For units above the rent control threshold, deposit arrangements are subject to negotiation, but all terms should be documented in the lease agreement, as of 2025.

Do I need a local agent to let my property in the Philippines?

No legal requirement obliges a landlord to use a letting agent for residential property in the Philippines. However, non-resident and overseas landlords are strongly encouraged to appoint a local property manager or agent for day-to-day management and to ensure compliance with BIR withholding tax obligations and local government permit requirements. Full-service property management fees generally fall in the range of 5–10% of monthly rent, as of 2025 — obtain current figures directly from agencies when seeking quotes.

What taxes do I pay on rental income as a non-resident landlord in the Philippines?

Non-resident aliens not engaged in trade or business in the Philippines are taxed at a flat 25% on their gross Philippine-sourced rental income, as of 2025. International tax treaties may reduce the applicable withholding rate for landlords whose country of residence has concluded a double taxation agreement with the Philippines. Consult the BIR and a qualified Philippine tax adviser for current rates and to assess whether treaty relief applies to your circumstances.

What are the legal grounds for evicting a tenant in the Philippines?

Under the Rent Control Act, a landlord may seek to evict a tenant on any of the following grounds: the tenant has sublet part or all of the unit without the owner’s written consent; the tenant has accumulated unpaid rent of three months or more; the landlord has a genuine personal or family need to occupy the property; or the lease contract has expired. Eviction requires a court order — self-help measures are illegal. Landlords are expected to attempt resolution through the Barangay Justice System before resorting to court proceedings.

Is short-term letting (e.g. Airbnb) allowed in the Philippines?

There is no national prohibition on short-term letting platforms such as Airbnb in the Philippines. However, operators are subject to BIR registration and tax filing requirements in the same way as conventional landlords. Local government units may require business permits for short-term rental operations, and individual condominium developments may prohibit such arrangements under their internal house rules. Properties such as hotels and motels fall outside the Rent Control Act, and short-term commercial holiday lets are generally not subject to rent control. Always confirm current requirements with your relevant LGU and homeowners’ association before listing a property on a short-term rental platform.