Buying a Property

In general, only Filipino nationals and businesses or partnerships with at least 60% Filipino ownership are permitted to own or buy land in the Philippines. Foreigners or non-Philippine nationals, on the other hand, may buy condominiums, buildings, and enter into long-term land leases.

When it comes to purchasing property in the Philippines, foreigners face several limitations. It is feasible to purchase a condo or flat as long as the block is at least 60% locally owned, but owning land is more difficult. This essentially implies that foreigners can own a building but not the land on which it is built.

Purchasing a home in the Philippines might be very different than purchasing a home in Europe or North America.

Foreign purchasers face limitations, and the market is unregulated. It is critical that you get experienced local assistance to confirm that the property you are purchasing is being sold lawfully.

Here are the actions you’ll need to do once you’ve selected someone to assist you :

Step 1: Select the property you want to buy

Step 2: Look into alternate mortgage financing options. You can check with local banks.

Step 3: Agree on a sales price with the seller and, with the assistance of a lawyer, draft and notarize the Deed of Absolute Sale (DOAS).

Step 4: Obtain the Land Tax Declaration from the Bureau of Internal Revenue (BIR) and deliver it to the appropriate Assessor’s office.

Step 5: Pay the city treasury for the real estate tax.

Step 6: The Assessor’s office will evaluate the property’s worth.

Step 7: Pay the applicable transfer taxes. This must be sent to the Assessor’s office.

Step 8: The seller is responsible for paying the Capital Gains Tax and the Documentary Stamp Tax (to the BIR).

Step 9: On the Registry of Deeds, the previous property title — in the name of the seller — is replaced with the new one (RD).

Step 10: You will receive a copy of the new deed and will need to seek tax declaration documentation from the Assessor’s office.

An agreement is a legal contract between the seller and the buyer for the sale of property that governs each party’s mutual promises. It is an official document that certifies the sale and acquisition of the property. A sale agreement is a legal document that contains a written promise to transfer property in exchange for a fee. It documents the terms of such transfer and payment, as well as the penalty for failure to transfer or pay the dwelling.

If you intend to acquire land in the Philippines, make sure you follow these measures to avoid any land ownership issues.

Make sure to investigate or verify the owner of the land you’re buying to prevent being in a position where many parties claim ownership of the land you acquired. How? You can obtain the owner’s name and title number by requesting a photocopy of the title from the salesperson. These facts will be required in order to obtain a Certified True Copy of the title from the Registry of Deeds. The property’s Registry of Deeds is in the city or municipality where it is located.

You can verify the prominent details of the lot being sold, such as the name of the landowner and the size of the lot, once you have the CTC of the title.

Now that you have the CTC of the title, double-check to see if the description on the title corresponds to the land being sold. Aside from the title, you may also verify the description with the assistance of a surveyor, who can inspect and verify the lot’s technical description.

Another item to look for is the tax declaration for the property. You can inquire about its status at the Assessor’s Office of the municipality in where the property is located.

If the payment is not updated, the property owner/dealer must settle it or sign a notarized agreement to do so.

Finally, it is critical to confirm the identification of the person dealing for the property. Check that you are dealing with an authorized salesman or broker. With the rise of fraud in the real estate market, it is critical to investigate the agent’s or dealer’s past. You may do so by contacting the developer and asking if the agent is still with them. If you are not affiliated with a developer, you must determine whether he or she owns the land. You must ensure that all of his family members agree to sell the property via an SPA or Special Power of Attorney from the lot’s owner or owners. It is critical to confirm the identification of the one ed.

You can now proceed with the purchase of the property after you have confirmed that the title is clear. This stage requires you to get a notarized and signed deed of sale. This paperwork serves as confirmation that you own the property and contains all pertinent information about the buyer.

To begin the title transfer, you must furnish and submit the paperwork required by the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) where your property is situated.

The following documents are required:

After submitting the papers, you can obtain an assessment and pay the Capital Gains Tax or Value-Added Tax as well as the Documentary Stamp Tax at your BIR RDO’s Authorized Agent Bank or ABB.

Documents Required:

A contract is already evidence that two or more people have reached an agreement. However, there are times when a written contract is insufficient to assess someone’s sincerity in carrying out what was agreed upon. A deposit, often known as a “arras,” is normally paid by the potential buyer to the seller. This is to demonstrate that the buyer is serious about acquiring the home. The primary function of the earnest money is to tie the deal. It is also included in the purchase price and is removed from the overall price. When the earnest money is paid to the seller, the contract of sale is completed. A payment is only considered earnest money if it is included in the purchase price. If the sale does not go through, the money will be reimbursed.

In the Philippines, real estate tax, also known as Real Property Tax (RPT), is an annual tax levied on property owners. It is imposed by the Local Government Unit in accordance with the provisions of the Local Government Code. RPT is a method of increasing funds for the LGU in order for it to offer essential public services. To prevent misuse, tax rates were fixed at ceilings and restrictions.

RPT for any year shall accrue on January 1st and shall represent a lien, public record, or legal claim on the property. Nonpayment may be grounds for auctioning off the property.

Metro Manila has an RPT rate of 2%, whereas provinces have a rate of 1%. If you’re wondering how to calculate real property tax, the calculation is straightforward: RPT = RPT rate multiplied by assessed value. What exactly is assessed value? It is the fair market value of the property multiplied by the assessment level set by ordinance. It is the percentage used to the fair market value to determine the property’s taxable value. The assessment level for residential homes can be as high as 20% and 50% for commercial assets.