Documentary stamp tax on a lease, over the total rent for the full term.
Documentary stamp tax
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Total rent over term
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DST per year of term
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How a lease gets stamped over its whole term
When you sign a lease in the Philippines, the Bureau of Internal Revenue treats the contract as a stampable document, the same family of charges that covers deeds and loans. What makes lease DST different from a property sale is the base. It is not the monthly rent and it is not a single year. The stamp is computed on the total rent payable over the entire term of the lease. A two-year contract and a ten-year contract at the same monthly rate carry very different DST, because the longer one commits to far more total rent.
The formula is a fixed amount plus a step. As modelled here, the lease DST is PHP 6 for the first PHP 2,000 of total rent over the term, then PHP 2 for every PHP 1,000, or fraction of PHP 1,000, above that PHP 2,000. The fixed PHP 6 floor is why even a tiny lease is never stamp-free. This calculator asks for the annual rent and the term in years, multiplies them to get the total consideration, and runs that step formula. It is built for landlords, tenants, and anyone drafting a commercial or residential lease who wants the stamp figure before signing.
Why a longer lease costs more in stamp tax
Because the base is total rent, the DST scales almost linearly with the term once you are past the small fixed floor. Doubling the term roughly doubles the total rent, which roughly doubles the stamp. That is worth knowing when you negotiate, because a five-year lease with one renewal clause can be cheaper to stamp than a single ten-year lease, although the legal protection differs and you should weigh that with your lawyer rather than chasing the smaller stamp alone. The figures here are the structure of the rule, but confirm the current PHP 6 base and the PHP 2 per PHP 1,000 increment with the BIR, since stamp amounts can be revised.
Stamping a three-year shop lease at PHP 240,000 a year
Take a small retail unit leased at PHP 240,000 a year for three years. Total rent over the term is PHP 720,000. The first PHP 2,000 is covered by the PHP 6 floor, leaving PHP 718,000 above it. That excess is divided into PHP 1,000 blocks, rounding any fraction up, which gives 718 blocks, each charged PHP 2. Here is the step-by-step the tool runs, using the rates it applies:
| Step | Amount |
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The chart shows how the stamp climbs as the same PHP 240,000 annual rent runs over one, three, and five years. The line is close to straight because the fixed PHP 6 floor is tiny next to the per-block charge.
The fraction rule that rounds up
A detail that quietly raises the bill: the PHP 2 charge applies to every PHP 1,000 or fraction of PHP 1,000. So total rent of PHP 720,500 is not 718 and a half blocks, it is 719 blocks, because the law rounds the partial block up to a whole one. The calculator does this for you, but if you compute by hand and round down, your figure will come out a few pesos short. The same logic underpins the fixed PHP 6 floor: a token PHP 500 lease still owes the full PHP 6.
A common mistake worth flagging is stamping a lease on one year's rent when the contract clearly runs longer. The base is the whole term, and an under-stamped lease can be challenged. If a lease has an indefinite term or auto-renews, get advice on how to size the base, because the rule keys off the committed total rent rather than a guess about how long you might stay.
Who pays the DST on a lease, the landlord or the tenant?
The lessor and the lessee are jointly liable, which means the BIR can collect from either party. In practice the contract usually states who shoulders it, and it is often passed to the tenant. Settle this in writing before signing so it does not become a dispute at registration.
Is lease DST a yearly cost or a one-time charge?
It is a one-time charge tied to executing the contract, computed on the total rent for the whole term. You do not pay it again each year. The per-year figure this tool shows is just the total divided across the term to help you compare leases, not a recurring annual stamp.