Understanding Property Taxes and Closing Costs in 2025

What Every Buyer and Seller Should Know

Buying or selling a home in 2025? Beyond the purchase price, there are important costs that can easily catch you off guard — property taxes and closing costs. Understanding these fees can help you avoid surprises and budget wisely.

Here’s what you need to know about these often-overlooked expenses.

What Are Property Taxes?

Property taxes are annual fees paid by homeowners, based on the assessed value of the property. These funds support:

• Public schools

• Roads and infrastructure

• Police and fire departments

• Local government services

How They’re Calculated:

Property Tax = Assessed Value x Local Tax Rate

Note: Assessed value may differ from market value and is determined by your local assessor.

In many U.S. states, rates range from 0.3% to 2.5% of the home’s value. In the Philippines, real property tax (RPT) is commonly 1% to 2% depending on whether it’s in a city or province.

Who Pays Property Taxes During a Sale?

• Sellers: Pay the portion of taxes up until the closing date.

• Buyers: Cover the remaining portion for the year.

• These amounts are usually prorated and appear on the closing disclosure.

What Are Closing Costs?

Closing costs are the fees and charges due at the time of transferring property ownership. Both buyers and sellers are responsible for different portions.

Common Closing Costs for Buyers (2025)

Cost Type	Description
Loan Origination Fee	Charged by the lender to process your loan
Appraisal Fee	Verifies the home’s market value
Credit Report Fee	Required by lender
Title Search & Insurance	Confirms ownership and protects against claims
Escrow Fees	Paid to the escrow company handling the transaction
Recording Fees	For recording the sale with the local government
Transfer Taxes	May be charged by local government
Prepaid Taxes & Insurance	Reserves for upcoming property taxes and homeowner’s insurance

💵 Estimated Buyer Closing Costs:Usually range between 2% to 5% of the purchase price.

📋 Common Closing Costs for Sellers

Cost Type	Description
Real Estate Commission	Typically 5%–6% of the sale price (split between agents)
Title Fees	Seller’s portion of title insurance
Outstanding Taxes/HOA	Any unpaid dues must be settled
Transfer Taxes	Required in some jurisdictions
Attorney or Notary Fees	Varies by location

Estimated Seller Closing Costs:Usually around 6% to 10% of the sale price (mostly due to commission).

Special Note for the Philippines

For those buying or selling property in the Philippines, common additional fees include:

• Capital Gains Tax (CGT) – 6% of selling price or zonal value (seller pays)

• Documentary Stamp Tax (DST) – 1.5% (buyer pays)

• Transfer Tax – 0.5% to 0.75% (buyer pays)

• Registration Fee – Around 0.25% (buyer pays)

• Notarial Fee – Usually 1%–2%

Final Tips

✔ Ask for a Closing Disclosure early to review costs✔ Get a Property Tax Estimate from the local assessor✔ Negotiate who pays what — especially in competitive markets✔ Plan for Prepaid Costs — like taxes and insurance at closing

Final Thoughts

Property taxes and closing costs are a crucial part of the home buying or selling process. Being informed helps you budget better, negotiate smarter, and avoid last-minute stress.

Need help estimating your total costs for a sale or purchase in 2025?Let’s connect — I’ll walk you through the numbers, help you understand the breakdown, and make sure you're financially ready to close the deal with confidence.