The Know-hows of Buying a Property in Philippines

Buying a piece of property in the Philippines is not that easy, especially for foreigners, as they are not allowed, under Philippine laws, to have 100% ownership of a piece of land anywhere in the country. But they can buy the house situated on the land where their ownership will not exceed 40% . The best deal they can get is to lease the land for 50 years which can be renewed for another 25 years. Another option is to marry a Filipino and have the title of ownership under the name of the Filipino spouse. However, the maximum area that a foreigner can own for residential purpose is 1000 square meters within urban areas and 10,000 sq.m in rural areas.

Documentation also entails a lot of works for both buyer and seller. The following are the average transaction costs and who pays what:

• Notary Fee 1% - 2% buyer
• Local Transfer Tax 0.50% - 0.75% buyer
• Registration Fee 1% - buyer
• Documentary Stamp Tax 1.50% buyer
• Capital Gains Tax 6.00% seller
• Real Estate Agent´s Fee 3.00% - 5.00% seller
• Costs paid by buyer 2.50% - 3.75%
• Costs paid by seller 4.50% - 6.50%
• ROUNDTRIP TRANSACTION COSTS 7.00% - 10.25%
• Source: Global Property Guide

It should be remembered by every buyer to look for properties owned by established developers like Vista Land, Makati Development Corp, SMDC, Robinsons and other reputable homebuilders and developers which are well advertised on prominent papers and even on TV Commercials.

Condominiums are like mushrooms sprouting everywhere in Metro Manila and the nearby suburbian districts. It’s much easier to own a condo unit as the usual down payment is only about 10 to 20% depending on the amenities that go with your unit of choice. A big number are offered as rent to own after giving the initial down payment which ranges from Php500K to Php1M, depending on the size of the condo unit. A CCT or Condominium Certificate of Title is issued as proof of ownership once the unit has been fully paid. Foreigners, as mandated by the law can only have 40% ownership while the remaining 60% must be owned by a Filipino partner or associate. The buyer should be extra careful in buying off-plan or pre-selling units. This simply means that the property is still on the planning stages or construction is on-going. For some developers whose names do not exactly ring a bell, these schemes are used to finance, partially or wholly, the construction of the condo buildings.