BIR Form 2307 for Real Estate Brokers and Real Estate Service Practitioners: Withholding Rates Under RR No. 11-2018
Real estate brokers, appraisers, and consultants — collectively “real estate service practitioners” under Republic Act No. 9646 — are expressly listed among the professionals subject to expanded withholding tax under RR No. 11-2018. A developer, seller, or brokerage client paying a commission or professional fee to a licensed broker withholds 5% or 10% for an individual, or 10%/15% for a licensed real estate corporation, and issues BIR Form 2307 for the amount withheld.
This post is part of the BIR Form 2307 series. For the base professional-fee rules this post builds on, see BIR Form 2307 for Professional Fees: Withholding Rates, ATC Codes, and a Worked Example and BIR Form 2307 for Commissions and Brokers: Rates, ATC Codes, and a Worked Example.
Generate a Broker's BIR Form 2307 FREE →Why are real estate brokers a named category under RR No. 11-2018? #
RR No. 11-2018, which amended RR No. 2-98 to implement the TRAIN Law’s withholding tax provisions, specifically enumerates real estate service practitioners as a licensed professional group subject to expanded withholding tax — placing brokers, appraisers, and consultants in the same bracket as doctors, lawyers, engineers, and other government-licensed professionals. Real estate brokers, appraisers, and consultants require a government licensure examination administered by the Professional Regulation Commission under RA 9646, which is precisely the class of professional RR No. 11-2018’s enumeration targets. As tax practitioner commentary summarizing the regulation’s own enumeration puts it:
“Real Estate Service Practitioners (RESP), which includes real estate consultants, real estate appraisers and real estate brokers, [are] among other professions requiring government licensure examination” subject to the professional-fee withholding bracket under RR No. 11-2018.
This distinguishes a licensed practitioner from an unlicensed property “agent,” whose commission might instead fall under the general commissions/sales representative category rather than the professional-fee bracket.
What rate applies, and to whom? #
An individual real estate broker, appraiser, or consultant is withheld at 5% or 10% depending on cumulative gross income from the same payor for the year; a brokerage organized as a corporation or partnership is withheld at 10% or 15% instead.
| Payee type | Gross income from payor this year | Rate | ATC code |
|---|---|---|---|
| Individual broker/appraiser/consultant | ≤ ₱3,000,000 | 5% | WI010 |
| Individual broker/appraiser/consultant | > ₱3,000,000 | 10% | WI011 |
| Real estate corporation/partnership | ≤ ₱3,000,000 | 10% | WC010 |
| Real estate corporation/partnership | > ₱3,000,000 | 15% | WC011 |
This mirrors the same threshold-based structure that applies to other individual professionals under RR No. 11-2018 — the ₱3,000,000 figure tracks cumulative payments from that specific payor within the taxable year, not the broker’s total income across all clients.
Individual broker vs. corporate brokerage: why the rate differs #
A sole-practitioner broker earning a commission directly draws the individual 5%/10% rate, while a client paying a licensed real estate brokerage firm — a corporation employing several agents under a broker of record — withholds at the higher corporate 10%/15% bracket. This distinction matters in practice because many property transactions route commissions through an agency entity rather than directly to the individual salesperson who closed the deal; the developer or seller withholds against whichever entity actually appears as the payee on the official receipt and contract — the brokerage corporation, not the individual agent working under it — and the brokerage then handles its own internal commission-sharing and any related withholding to its in-house agents separately.
Worked example: a condominium developer’s broker commission #
A developer withholds 5% on a broker’s commission when year-to-date payments to that broker stay under ₱3,000,000, and switches to 10% once the threshold is crossed.
A condominium developer engages an independent, PRC-licensed real estate broker to sell units, paying a 3% commission per closed sale:
| Sale | Unit price | Commission (3%) | Cumulative commission from developer YTD | Rate applied | EWT withheld |
|---|---|---|---|---|---|
| Unit 1 | ₱3,500,000 | ₱105,000 | ₱105,000 | 5% (under ₱3M threshold) | ₱5,250 |
| Unit 2 | ₱4,000,000 | ₱120,000 | ₱225,000 | 5% (still under ₱3M threshold) | ₱6,000 |
| Unit 20 (later in the year, cumulative crosses ₱3M) | ₱3,800,000 | ₱114,000 | ₱3,150,000 (after this sale) | 10% (cumulative now exceeds ₱3M) | ₱11,400 |
The developer issues a BIR Form 2307 for each remittance period reflecting the ATC and rate actually applied, and the broker consolidates all certificates received when computing creditable withholding tax on their own annual income tax return. A broker who files the sworn declaration (Annex B-1) at the start of the year, representing they expect to stay under ₱3,000,000 across all payors, can lock in the 5% rate for that payor for the year regardless of the running total — the same mechanism available to any other individual professional under RR No. 11-2018.
Frequently asked questions #
Are real estate brokers subject to BIR Form 2307 withholding on their commissions? #
Yes. RR No. 11-2018 expressly enumerates real estate service practitioners — including real estate brokers, appraisers, and consultants licensed under RA 9646 (the Real Estate Service Act) — among the professionals subject to expanded withholding tax, and the developer or seller paying the commission must issue BIR Form 2307.
What withholding rate applies to a real estate broker’s commission? #
An individual real estate broker is withheld at 5% if their gross income for the current year from the payor does not exceed ₱3,000,000, or 10% if it does — the same threshold-based rate structure RR No. 11-2018 applies to other individual professionals under ATC WI010/WI011.
Does a real estate brokerage firm get the same rate as an individual broker? #
No. A real estate brokerage organized as a corporation or partnership is withheld at 10% (if gross income doesn’t exceed ₱3,000,000) or 15% (if it does), the corporate professional-fee bracket under ATC WC010/WC011, rather than the individual 5%/10% rate.
Does a broker need a PRC license for the withholding rules to apply? #
The withholding classification follows RR No. 11-2018’s enumeration of licensed real estate service practitioners under RA 9646, so a broker practicing without the required PRC license is still paid a commission that a developer or seller should withhold on — but operating unlicensed exposes the individual to separate professional-regulation penalties under RA 9646, independent of the BIR withholding treatment.
Can a real estate broker file a sworn declaration to get the lower 5% rate? #
Yes. Like other individual professionals under RR No. 11-2018, a broker who submits the required sworn declaration of gross receipts (BIR Form 0605-linked Annex B-1/B-2) to each payor at the start of the year, confirming they expect to stay under the ₱3,000,000 threshold, qualifies for the 5% rate instead of the default 10%.
Summary #
RR No. 11-2018 places licensed real estate brokers, appraisers, and consultants squarely in the professional-fee withholding bracket alongside other RA-licensed professions — 5%/10% for an individual practitioner and 10%/15% for a real estate corporation or partnership — and a developer, seller, or client paying them must issue BIR Form 2307 accordingly, tracking cumulative payments against the ₱3,000,000 threshold across the year.