Real Estate Commission Rates in the Philippines, Explained
New agents ask this constantly, and the honest answer is: there's no legally fixed rate — commission in the Philippines is entirely a market convention. Here's what's actually standard.
Typical rates by property type
| Transaction type | Typical commission |
|---|---|
| Residential resale | 3–5% of gross selling price |
| Raw land | 5% of gross selling price |
| Leasing | 1 month's rent (or a % of total lease value) |
These aren't set by law — RA 9646 (the Real Estate Service Act) regulates who can practice as a broker, not what they charge. The percentage is negotiated between the broker and the seller/developer, and can vary based on property value, exclusivity of the listing, and local market norms.
How commission is computed
Commission is calculated on the gross selling price, not the net amount the seller receives after taxes and fees. If a property sells for ₱5,000,000 at 5% commission, that's ₱250,000 — before any tax or fee deductions on either side.
Broker–salesperson splits
If you're a licensed salesperson working under a broker (rather than a broker yourself), the broker typically splits the commission with you. Common splits are 60/40 or 70/30, with the larger share going to whichever party brought in the client or did the bulk of the closing work — this varies by agency and is usually spelled out in your agreement when you join.
VAT on commissions
If your annual gross receipts from brokerage exceed ₱3,000,000, you're required to register for VAT and add 12% VAT on top of your commission when invoicing. Below that threshold, you're generally subject to percentage tax instead — worth discussing with an accountant once your business scales.
Setting expectations with clients
Since commission isn't legally fixed, put it in writing early — a simple listing agreement stating the rate, what triggers payment (signed deed, full payment received, etc.), and who's responsible for it avoids disputes at closing, which is one of the most common sources of broker-seller friction.
Source: Respicio & Co.'s commentary on broker commission practices.
This article is provided for general information about the Davao Region property market and does not constitute legal, tax, or financial advice. Rules and figures change — verify current requirements with the BIR, Registry of Deeds, PRC, or a licensed professional before acting on anything here.