Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Philippines tax professional before filing.
Philippines · Philippines · Short-term rental taxes
Short-Term Rental Taxes in the Philippines
Short term rental taxes in the Philippines: register with the BIR, choose the 8% gross-receipts option or graduated 0–35% rates, and pay 3% percentage tax or 12% VAT above ₱3 million, plus your city's business permit.
The 30-Second Answer
- Short-term rental tax in the Philippines starts with the BIR: leasing out a condo or house is a business, so you register (BIR Form 1901 for individuals) and receive a Certificate of Registration (Form 2303) before you take bookings.
- Individual hosts pay income tax at graduated rates of 0%–35% (the first ₱250,000 of taxable income is taxed at 0%) — or, if gross receipts stay at or below ₱3 million, can elect a flat 8% on gross receipts above ₱250,000 instead of graduated rates and percentage tax.
- Non-VAT hosts who do not take the 8% option pay 3% percentage tax on gross receipts; once annual receipts exceed ₱3 million you must register for 12% VAT. A residential unit let at ₱15,000 a month or less is VAT-exempt.
- Your city or municipality adds a business (mayor's) permit, a local business tax on last year's gross receipts and annual real property tax. Under the Tourism Act, home stay operators count as accommodation establishments, a category for which DOT accreditation is mandatory.
Deductions
What Philippine STR Hosts Can Deduct
Itemized deductions only matter on graduated rates. Hosts on the 8% option or the 40% Optional Standard Deduction (OSD) cannot claim the costs below on top — the flat rate or 40% replaces them.
Itemized deductions need BIR-compliant invoices and receipts in the host's name and TIN. The OSD is up to 40% of gross sales or receipts with no substantiation, but it is not available to nonresident aliens (NIRC Sec. 34(L), as amended by TRAIN).
Filing Calendar
Key Dates & Filing Calendar
The Philippine tax year is the calendar year. Income tax is filed quarterly and annually; percentage tax or VAT is filed every quarter, even in a quarter with no bookings.
The 8% election is made on the first quarterly return of the year (or the first return after you start the business) and applies for the whole year — decide before you file in April/May.
BIR Revenue Regulations 8-2018; BIR Forms 1901 and 1701A; Airbnb Host Tax Guide on Short-Term Accommodations — Philippines (2025)
Tax Treatment
8% Gross-Receipts Option vs. Graduated Rates
Every individual host whose receipts stay at or below ₱3 million chooses once a year: a flat 8% on gross receipts above ₱250,000, or graduated 0–35% rates on net income plus 3% percentage tax.
8% Income Tax Option
One flat rate on gross receipts — no percentage tax
- Tax is 8% of gross receipts in excess of ₱250,000 for purely self-employed hosts; mixed-income earners (salary plus rentals) pay 8% on all rental receipts with no ₱250,000 deduction.
- Replaces both the graduated rates and the 3% percentage tax under Section 116.
- Elect it on your first quarterly return of the year; you file BIR Form 1701A at year-end.
- No expense deductions — costs, depreciation and interest are ignored.
Only while gross sales/receipts and other non-operating income do not exceed ₱3 million a year
Graduated Rates (Itemized or 40% OSD)
Tax on net income at 0–35%, plus 3% percentage tax
- Net rental income is taxed at 0% up to ₱250,000, rising through 15%, 20%, 25% and 30% to 35% above ₱8 million.
- Claim itemized expenses with BIR-compliant receipts, or take the Optional Standard Deduction of up to 40% of gross receipts without receipts.
- Non-VAT hosts also pay 3% percentage tax on gross receipts each quarter (BIR Form 2551Q).
- Required once receipts exceed ₱3 million, when 12% VAT registration also becomes compulsory.
No ceiling — but above ₱3 million you move from percentage tax to 12% VAT
Depreciation
Depreciation for Philippine STR Property
Depreciation is an itemized deduction, so it only helps hosts on graduated rates who itemize. The Tax Code allows a reasonable allowance over an asset's estimated useful life rather than a fixed statutory schedule.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Condominium unit or house (building portion) | Estimated useful life | Land is never depreciable; condo owners depreciate the unit cost only — keep the deed of sale and tax declaration. |
| Furniture, beds & fixtures | Estimated useful life | Illustrated at 5 years in the worked example; document the basis you choose and apply it consistently. |
| Air-conditioners & appliances | Estimated useful life | Depreciate the portion used for the rental business only. |
| Renovations to the rented unit | Estimated useful life | Capital improvements are depreciated, not expensed; routine repairs are deducted in the year paid. |
Depreciation is irrelevant under the 8% option and the 40% OSD, which replace all itemized deductions. Keep an asset register with invoice, date placed in service and method.
There is no US-style depreciation recapture. How a later sale is taxed depends on whether the unit is treated as a capital asset or as an ordinary asset used in your rental business, so settle that classification with your adviser before you sell.
VAT, Percentage Tax & Local Taxes
VAT, Percentage Tax and Local Government Charges
The Philippines has no national occupancy or lodging tax on guests. The business tax on bookings is either 3% percentage tax or 12% VAT, and each city or municipality levies its own permit fees and local business tax.
Which national business tax applies to your vacation rental receipts depends on your income-tax election and your annual receipts:
0–12%: 12% VAT above ₱3 million, 3% percentage tax on graduated rates, or none on the 8% option
NIRC Secs. 109(1)(Q), 109(1)(BB) and 116 (RA 10963); Local Government Code (RA 7160); Airbnb Host Tax Guide — Philippines (2025)
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Booking by a non-VAT host on the 8% option | You pay the 8% with your quarterly and annual income tax returns | No business tax to add to the rate; track receipts against the ₱3 million ceiling |
| Booking by a non-VAT host on graduated rates | You file 3% percentage tax on BIR Form 2551Q each quarter | The 3% is your cost and is deductible; it is not charged to the guest as a separate tax |
| Booking by a VAT-registered host | You charge 12% output VAT and file BIR Form 2550Q | Issue VAT invoices, claim input VAT on costs, and price VAT into the nightly rate |
Local layer: your city or municipality requires a business (mayor's) permit renewed each January, charges a local business tax on the previous year's gross receipts at rates set in its own revenue code, and bills annual real property tax on the unit. Some LGUs also require a barangay clearance first.
Platforms
How Airbnb, Booking.com & Agoda Handle Philippine Taxes
Airbnb tax in the Philippines is the host's job: Airbnb does not list the Philippines among places where it collects and remits taxes for hosts, so you declare every booking and pay the BIR and your LGU yourself.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Airbnb's Philippine tax guide describes no automatic BIR report — declare all payouts | No — the Philippines is not on Airbnb's collect-and-remit list; Airbnb charges VAT on its own service fee | Earnings and transaction history in the host dashboard |
| Booking.com | Declare all payouts yourself; commission invoices support your expense claim | No — any VAT or percentage tax on the stay is yours to file | Reservation and invoice statements in the Extranet |
| Agoda | Declare all payouts yourself | No — the host files business tax with the BIR | Payout reports in the partner portal |
| Direct bookings | No third-party report | You — issue a BIR-registered invoice for each stay | Keep your own invoice series and bank records |
Listing on Several Platforms?
Add Airbnb, Booking.com, Agoda and direct receipts together when you test the ₱3 million ceiling for the 8% option and for VAT — the threshold is your total gross sales or receipts for the year, not per platform or per unit.
No DAC7 in the Philippines — RA 12023 Taxes the Platforms
DAC7 is an EU rule and does not apply here. The relevant law is RA 12023 (signed 2 October 2024): nonresident digital service providers, including online marketplaces and platforms, must charge 12% VAT on services consumed in the Philippines, in force from June 2025 under BIR RR 3-2025. It taxes the platform's fee, not your guest's rent — if you are VAT-registered, you account for that VAT yourself under the reverse-charge rule.
Airbnb Help Center — Where Airbnb collects and remits taxes (article 2509) and VAT on service fees (article 436); Republic Act No. 12023
Illustrative P&L — Philippine Condo Unit (Non-VAT, ₱)
Example only: one condo let 200 nights at ₱6,000, host has no salary income, receipts under ₱3 million. Graduated column uses itemized deductions; the 40% OSD would give ₱86,500 income tax. Not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
The BIR matches your invoices, quarterly returns and annual return; your city checks the gross receipts you declare at permit renewal. Keep one set of numbers that reconciles all of them.
| Keep | How long | Why |
|---|---|---|
| Certificate of Registration (Form 2303) and registered invoices | While operating + 5 years | Proves you are registered and issuing compliant invoices |
| Platform payout reports and booking records | 5 years after the filing deadline | Supports gross receipts on 1701Q/1701A, 2551Q/2550Q and the ₱3 million test |
| Receipts for itemized expenses | 5 years after the filing deadline | Without them, deductions are disallowed — or use the 40% OSD |
| Quarterly and annual returns with proof of payment | 5 years after the filing deadline | Evidence of timely filing if the BIR audits |
| Mayor's permit, local business tax and real property tax receipts | 5 years | Shows LGU compliance and supports the local-tax deduction |
Under the Ease of Paying Taxes Act (RA 11976), books and records must be kept for five years from the day after the deadline for filing the return.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational summary based on the Tax Code as amended by TRAIN (RA 10963), RA 11976, RA 12023, BIR regulations and forms, the Tourism Act, and Airbnb's official Philippine tax guide, checked in September 2026. Amounts in Philippine pesos.
- BIR — Revenue Regulations No. 8-2018 (digest) — Graduated rates from 1 January 2023 (0%–35%), 8% option, 40% OSD, election on first quarterly return. bir-cdn.bir.gov.ph/local/pdf/Digest%20RR%208-2018_copy.pdf
- RA 10963 (TRAIN) — NIRC Secs. 24(A), 34(L), 109(1)(Q), 109(1)(BB), 116 — ₱15,000/month residential lease exemption, ₱3M VAT threshold, 3% percentage tax. lawphil.net/statutes/repacts/ra2017/ra_10963_2017.html
- BIR Form 1901 (October 2025) and Form 1701A — Registration for self-employed and mixed-income individuals; 1701A for business-only income. bir-cdn.bir.gov.ph/BIR/pdf/1901%20October%202025%20ENCS%20Final.pdf
- RA 11976 — Ease of Paying Taxes Act — Five-year record retention; micro taxpayer class under ₱3M. lawphil.net/statutes/repacts/ra2024/ra_11976_2024.html
- RA 12023 — VAT on Digital Services — Signed 2 October 2024; 12% VAT on nonresident digital service providers; applied from June 2025 under BIR RR 3-2025. lawphil.net/statutes/repacts/ra2024/ra_12023_2024.html
- RA 9593 — Tourism Act of 2009 and IRR — Home stay operators are accommodation establishments; accreditation mandatory for primary tourism enterprises. tieza.gov.ph/wp-content/uploads/2020/06/RA-9593-IRR.pdf
- Airbnb — Host Tax Guide on Short-Term Accommodations, Philippines (2025) — Forms 1701Q/1701A/2551Q/2550Q and deadlines; LGU permit and RPT. assets.airbnb.com/help/Airbnb_TaxGuide2025_Philippines_ENGLISH.pdf
- Airbnb Help Center — articles 2509 and 436 — Philippines not on the collect-and-remit list; VAT charged on Airbnb service fees. airbnb.com/help/article/2509 and airbnb.com/help/article/436
Questions
Frequently Asked Questions — Philippine STR Taxes
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