Zonal value vs fair market value vs selling price

By Jose Dante Almeda Jr., PRC Licensed Real Estate Appraiser No. 11261 & Licensed Real Estate Broker No. 33179 · Last updated June 2026

When you buy or sell property in the Philippines, three different values come up, and they get mixed up constantly. They are not the same, and confusing them can cost you money or cause trouble with the BIR. Here is what each one means.

Zonal value

Zonal value is a figure set by the Bureau of Internal Revenue for a given area, used to compute taxes such as capital gains tax and documentary stamp tax. It is a tax reference, updated only periodically, and it is usually lower than what property actually trades for, sometimes far lower in prime locations. Zonal value is not market value, and it is not what you should price a property at.

Fair market value

Fair market value is the price a willing buyer and a willing seller would agree on, neither under pressure and both reasonably informed. This is what a professional appraisal estimates, using real evidence such as recent sales of comparable properties, the income a property can earn, or the cost to replace it, rather than a tax table. It is the number banks rely on for lending and the number that protects you in a negotiation.

Selling price

The selling price is simply what a property is listed at or eventually sells for. It can sit above or below fair market value depending on how motivated the seller is, how the property was marketed, and current demand. An asking price reflects hope; fair market value reflects evidence.

Why the difference matters

For the BIR, taxes are computed on whichever is higher between the zonal value and the price stated in the deed, so understating the price to save on tax can backfire. For a bank loan, the lender lends against the appraised fair market value, not the asking price. And for a fair sale, knowing the true market value keeps you from overpaying or selling short.

Which number should guide you?

Use zonal value to anticipate your tax. Use a licensed appraisal of fair market value to set or check a price, secure financing, or settle an estate. The asking price is a starting point for negotiation, not a measure of worth.

If you need a defensible fair market value, learn about our appraisal service or get in touch. We appraise property across Cavite, Metro Manila, Laguna, and beyond.