Advice on buying Philippines Real Estate Property

You have found an Philippines property you wish to purchase what next?

Buying Property in Philippines - Costs of Purchasing Philippines Property

Philippines Property Buyer's Guide explains the legal fees, legal procedures, purchase taxes and mortgage procedure.

The foreigner can own the building but not the land, unless the foreigner has a Philippine Special Retirement / Investment Visa. Foreigners can own condominium units or apartments in high-rise buildings as long as the foreign proportion does not exceed 40%. To qualify for this visa you must be at least 35 years old and meet the bank deposit requirement which can be withdrawn at a later date for your investments. There is a processing fee and the amount of the deposit / investment needed depends on whether or not you are married to a Filipino or former Filipino. This allows you almost all of the investment privileges of a Filipino citizen.

Holders of Special Resident Retiree's Visa (SRRV), a non-immigrant resident visa, can get additional benefits aside from being allowed to buy a condo unit or lease a parcel of land or a house and lot. The SRRV holders can reside in the Philippines permanently, with multiple-entry privileges and zero travel taxes.

The BUYER pays for the:

Documentary Stamp Tax - 1.5% of the selling price or zonal value or fair market value, which ever is higher.

Transfer Tax - 0.5% of the selling price, or zonal value or fair market value, which ever is higher.

Registration Fee - 0.25% of the selling price, or zonal value or fair market value, which ever is higher.

Incidental and miscellaneous expenses incurred during the registration process.

The SELLER pays for the:

Capital Gains Tax equivalent to 6% of the selling price on the Deed of Sale or the zonal value, whichever is higher. (Withholding Tax if the seller is a corporation)

Unpaid real estate taxes due (if any).

Agent / Broker's commission.

The above sharing of expenses is the standard practice in the Philippines.

However, buyers and sellers can mutually agree on other terms as long as it is done during the negotiation period (before the signing of the "Deed of Sale").

The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal transfer of real estate property ownership. The deed of sale is then taken to the Registry of Deeds to be officially recorded after paying the documentary stamp, transfer tax and registration fees. Always verify from the Registry of Deeds the authenticity of a Transfer Certificate of Title before buying a property. If the seller only has a tax declaration, be extra cautious and check with neighbours, the Barangay captain or anyone in the know in the community to verify the seller/owner's true identity and the property's history.

Your Agent / Broker will usually do the registration process (sometimes for a fee); however, all government, taxes, transfer fees and incidental or miscellaneous expenses will be shouldered by the buyer.

An adapted form of the "Torrens" system of land registration is used in the Philippines. The system was adapted to assure a buyer that if he buys a land covered by an Original Certificate of Title (OCT) or the Transfer Certificate of Title (TCT) issued by the Registry of Deeds, the same will be absolute.

Documents needed when transferring the title (TCT or CCT) to the new owner:

Certified true copy of the title

Copies of the Deed of Absolute Sale

Latest tax declaration of the property

Certificate from the Bureau of Internal Revenue that the capital gains tax

and documentary stamps have been paid

Receipt of payment of the transfer tax and registration fees

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These guidelines are meant for guidance only and describe a straightforward purchase scenario. However this information is not meant to replace proper legal advice, which we always insist you take.

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