
THE Philippine real estate industry is celebrating the Marcos administration’s decision to shelve a proposed increase in capital gains, donor’s and estate taxes, a move attributed to stronger-than-expected government revenues.
The Department of Finance (DoF), under Secretary Ralph Recto, announced the withdrawal of the Government Revenues Optimization through Wealth Tax Harmonization (Growth) bill, which had aimed to raise tax rates on property-related transactions from six percent to 10 percent between 2025 and 2030.
“The government is properly managing its finances, ensuring that public needs are met without burdening the citizenry with new taxes,” Recto said on Tuesday, April 29, 2025, emphasizing a shift towards strengthening non-tax revenue sources to meet fiscal targets.
A Better Real Estate Philippines (Abrep), a trade association representing brokers, developers and allied professionals, welcomed the policy reversal. The group had previously advocated for fiscal audits and expenditure reforms over new tax measures, warning that the proposed hikes could stifle investment and burden middle-income households.
“Raising taxes is not the solution,” said Abrep president Anthony Gerard Leuterio. “The issue isn’t a lack of funds, but how those funds are managed. Without accountability, higher taxes risk punishing property owners and ordinary families.”
The Growth bill, part of the DoF’s broader strategy to generate up to P300 billion in additional revenues, faced strong opposition from the private sector. Business groups, including Abrep and the Management Association of the Philippines (MAP), cited inefficiencies in public agencies, underfunding of state hospitals, and deteriorating public services.
MAP, in a letter to President Ferdinand Marcos Jr., called for a moratorium on new tax laws until a full review of public spending and fiscal leakage is completed.
“This is not a matter of rich versus poor,” Abrep argued, noting the disproportionate impact on middle-income families.
In a letter to House Ways and Means Committee chair Rep. Jose Ma. Clemente Salceda, Recto formally requested the withdrawal of proposed amendments to the Capital Markets Efficiency Promotion Act, citing the “better-than-expected revenue performance” in the first quarter.
Burden
Steven Yu, past-president of the Mandaue Chamber of Commerce and Industry, echoed the sentiment, saying, “The proposed increase of capital gains tax on real property, donor’s tax and estate tax to 10 percent, under the Growth bill, will discourage the transfer of real and personal properties and will be a burden to the majority of the population. We learned it was withdrawn by DOF, and we welcome this development.”
He further emphasized that maintaining the current rates would generate more revenue, especially given the current headwinds in the real estate sector.
Mark Ynoc, president of MCCI, highlighted the potential negative impacts of the proposed tax hikes.
He noted that increasing the estate tax rate could undermine the recent estate tax amnesty, while raising the capital gains tax could exacerbate housing affordability issues. He also warned that a higher donor’s tax could discourage philanthropic donations.
While the Marcos administration reaffirms its commitment to long-term fiscal consolidation, the recent decision signals a shift towards revenue-neutral strategies and a greater emphasis on structural reform over direct taxation.
However, Ynoc said they remain vigilant, as other tax reforms targeting passive income are still under consideration.
“But we are quite happy that Secretary Recto reconsidered and will not push through with this Growth bill proposal,” said Ynoc.
For the first quarter of 2025, the DOF said total tax collections increased by 13.55 percent to P931.5 billion, with the Bureau of Internal Revenue posting P690.4 billion in collections, 16.67 percent higher than the same period last year. Similarly, the Bureau of Customs’ collections grew by 5.72 percent, reaching P231.4 billion. / KOC