Information about procedure for buying property, condo, apartments or house in the Cebu, Philippines
In this article you can find answers to many questions regarding the procedure for acquiring real estate in the Philippines. Information provided by GlobalPropertyGuide, an English analytical real estate agency.
Foreigners may acquire homes and apartments in the Philippines, but cannot own land. When buying a house, citizens of other countries do not at all acquire the land on which it is built. Land can be leased up to 50 years, then, if desired, the lease is extended for another 25 years.
If a foreigner really wants to buy land, there are several possibilities. First: marriage to a Filipino citizen (citizen), which gives the right to become the owner of the land already under the Filipino name. True, in the event of the death of a spouse or divorce, land cannot be transferred to a foreigner. There is another opportunity to acquire land through a firm. The company should have no more than 40% of the share of foreign capital.
The maximum area that can be purchased for housing is 1 thousand square meters. m. in the city, or 1 ha in the countryside.
When buying a new property in the Philippines, it is very important to get the help of reputable developers and licensed real estate agents or brokers. This advice is especially relevant at a time when the object you want to purchase is still unfinished or is at the project development stage at all.
In general, real estate can be purchased by simple agreement. After deciding which property to buy, as well as after inspecting the premises and reviewing the documents, the buyer usually signs a notarized sales contract. Using the services of reputable sales agencies is also convenient because they provide not only the necessary information regarding real estate and all operations related to it, but also help the buyer in obtaining a mortgage loan.
Buying an apartment in a condominium
When buying an apartment, the owners are given a Certificate of Ownership (FTA), but the document is usually not given until the property is paid in full. Down payment is usually required in the amount of 10-30% of the cost of the apartment. Foreigners can own no more than 40% of the apartments in the house.
The owner of the so-called Special Resident Retiree’s Visa (SRRV - a visa that can be obtained by a foreigner who is ready to invest in the economy of the country) can receive additional benefits - in addition to permission to buy an apartment, or rent land, or a house with a plot. SRRV owners can live in the Philippines permanently, they are granted a multi-visa, they are not charged fees for their trip. Investments in the Philippines economy required to obtain SRRV must be at least $ 50 thousand. An investor must be at least 35 years old.
The process of buying land in the Cebu, Philippines is tedious and time-consuming. Besides the fact that foreigners cannot buy land, the land registration and classification system will make any investor think twice before. The farther you are from the capital, the more you should be careful.
However, serious land problems also exist in the metropolitan area (NCR). In the Cebu, Philippines, 11 laws have been passed that are directly related to land registration and nine others governing land disposition and management. In addition to the Department of the Environment and Natural Resources and the Bureau of Land Property, there are several more agencies that exercise direct or indirect control over land property. The Cebu's courts also have the right to decide on land allotment.
Procedures for the transfer of ownership (land or apartment)
1. The owner and the buyer agree on the sale of the land. Through a lawyer, an Absolute Sale Act (DOAS) is created and certified.
2. The land tax declaration is certified by the Bureau of Internal Revenue (BIR) and submitted to the city or municipal office of the tax inspector for consideration.
3. The buyer pays property tax to the city treasury.
4. The tax office provides an assessment of the market value of the property.
5. Taxes on money transfer are levied on the buyer by the Office of the Tax Inspectorate.
6. VAT and stamp duty on documents are paid to the Bureau of Internal Revenue.
7. The Registration Chamber (RD) cancels the old ownership, and writes out a new one in the name of the buyer.
8. The buyer, now the new owner, receives a copy of the new property right and requests a tax return from the tax office.
In order to register acts with the Registration Chamber, real estate owners need the following documents: Certificate of Transfer of Ownership (TCT) - in the event that these are single houses or uncultivated land, and the Land Registration Act. Acts must be registered in the same province where the property is located. However, the records are so inaccurate that from year to year in the Philippines, the number of errors and duplicate acts is growing quite rapidly. The inventory of all lands in the country, sanctioned by the Public Land Law back in 1903, is far from complete. The whole process of registering real estate, including eight procedures, can take more than a month.
|Philippine Peso||Act USD|
|Registration fees||4,398 + 45 for every 20 thousand in excess of 1,700 thousand||88 + 0.9 for every 400 in excess of 33.9 thousand.|
|Notary fees||200 (per act or document)||4|
|Example||The cost of Property||12 500 thousand||250 thousand|
|At a cost exceeding 1,700 thousand fil. pesos||10 800 thousand||215 thousand|
|for every 20 thousand Philippine pesos, 45 Filipino pesos are paid||24 300||485|
|Fixed amount||4 398||88|
|All fees||28 898||577|
|% of property value||0,231%||0,231%|
|type of expenses||percentage of property value||who pays|
|Costs of legal support of the transaction||5,00–10,00%||buyer|
|Local property transfer tax||0,50–0,75%||buyer|
|Certificate of sale||0,225–0,50%||buyer|
|Tax on realized capital gains (on the difference with an increase in the value of an object for the period between its acquisition and sale)||6,00%||seller|
|Real estate agent fee||3,00–5,00%||seller|
|Costs borne by the buyer||5,73–11,25%|
|Costs borne by the seller||10,50–12,50%|
|Total costs for the purchase and subsequent resale of a property||16,23–23,75%|
Notes to the table:
The total costs
For the purchase and subsequent resale of a property include fees to lawyers, a notary, registration fees, taxes, fees to real estate agents, etc.
Philippine Peso (PHP). Exchange rate at the time of the publication of this article (05/04/08): $ 1 = 42.2585 Philippine pesos
Local Property Transfer Tax
Charged by the municipal or city government. It is 0.5% –0.75% - depending on the amount of the transaction, the distance from the capital or the real market value, which is usually higher than the state’s assessment of the object.
Legal transaction costs
On a contractual basis. As a rule, from 20 thousand Philippine pesos and above. In some cases, the amount may be 10% of the value of the property.
The tax on realized capital gains on the property sold is levied in the amount of 6% of the total price, or real market value, whichever is higher. The so-called tax on realized capital gains from the property sold is actually a local transaction tax, which depends on the distance from the capital. Who pays this tax depends on the agreement between the seller and the buyer. In some cases, the seller or buyer pays all taxes and fees, and the price is debited from the account or taken into account in the sale price.
Payment for real estate agent services
An agent or broker usually receives only his commission in the amount of 3-5% of the transaction amount.
15 Philippine pesos ($ 0.30) for 1 thousand Philippine pesos ($ 20) in the value of the transaction before payment of this stamp duty, or 1.5%.
Compiled from GlobalPropertyGuide