The Philippines, our archipelagic nation attracted more than 5.3 million visitors in 2015, according to the United Nations World Tourism Organization (UNWTO). However, this country magnetizes more than just a tourist. In addition, the Philippines is dwelling to a large and welcoming community of emigrants who enjoy the low cost of living. Not to mention, the beautiful and inviting land beaches, the tropical climate and the friendly locals.
It is estimated that one can comfortably live in the Philippines for around $1,000 a month, that is around P40,000 to P45,000 including foodstuff, activities, essential healthcare, and housing costs.
Just like everyplace in this universe, housing makes up the large percentage of the finances. That’s one reason why many people stick to renting but if you’re planning to stay in the Philippines for good, it can be cost effective to buy.
Property prices vary greatly in the Philippines depending on location, size, condition, and features. Buying a property or land in the Philippines is difficult, complicated and a long process. As a buyer, you must know what to do and what to be aware of before completely deciding to buy your dream property or land in order to avoid problems in the future.
Real estate transactions always involve more than just the price tag. If you buy property in the Philippines, you can expect to pay some fees, including:
- Capital Gains Tax – this is 6% of the real estates’ sales price, zonal value, or fair market value, whichever is highest. This is normally paid by the seller, but it some instances the buyer pays it, or it ends up rolled into the sales price.
- Documentary Stamp Tax – normally 1.5% of the real estates’ sales price, zonal value or fair market value, whichever is highest.
- Transfer Tax – this is generally 0.5% to 0.75% of the real estates’ sales price, zonal value, or fair market value, whichever is highest.
- Title Registration Fee – this varies according to a published registration fee table and commonly around 0.25% of the real estates’ sales price.
Here are some great and useful tips if you are planning to buy a land in the Philippines
1. The law requires you to be more diligent in buying.
Make sure that the “Transfer Certificate of Title” (TCT) is authentic. The easiest and simplest way of checking is to get a “Certified True Copy” of the title from the Registry of Deeds which is usually located at the city or municipal hall where the property is located. You can request from the seller a photocopy of the title in order to get the title number and the name of the owner in order to avail a Certified True Copy of the title.
2. When you’re buying a registered lot or land, verify that the title is clean.
If it’s clean or if the Title has no problems, or the property is not mortgaged, no liens and encumbrances you can rely on the four corners of the title. You’re considered already a buyer in good faith. So you’re already protected if you buy it. If the seller shows you the title, it has to be the Owner’s Duplicate Title. If the seller is the owner. Then this only mean one thing – buy it now!
Consider these things when looking at the title.
- Is the land has an adverse claim? This is a problem when somebody claims the land owned by the seller.
- Is the land has encumbrance or mortgaged. Alternatively, if the land has been used as collateral by the owner during loan.
- Is the land has “lis pendence“? Or the land has a pending litigation or under investigation.
If you found any of these problems, try finding ways to remedy those problems or maybe you can find another land to buy.
3. Make sure that the land described on the title is really the land that you are buying.
You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don’t have any street name and number to pin point a property, it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of the Title.
4. Make sure that the sellers are the real owners.
If you are buying from an individual property owner, ask for identification papers like passport or driver’s license, it is also a good idea to talk to the neighbors to confirm the identity of the sellers or you might as well ask some history of the property.
5. Confirm that the yearly real estate taxes are paid.
Ask for a copy of the Tax Declaration and Tax Receipts to confirm that the real estate tax payments are up to date.
6. If you are buying through the Real Estate Agent, check the authority of the Real Estate Agent who sells the property.
Does the agent have SPA (Special Power of Attorney)? Is the signature valid? It is safer to deal with a licensed Real Estate Agent/Broker. If the landowner is outside the Philippines or has a serious problem where he cannot personally see the buyer, the Real Estate agent/broker or the dealer must have an SPA.
7. See to it that you have a road right of way.
Don’t simply look at the property and seeing a road; it is not enough. Check the title and see whether or not it is actually bounded by a road lot, road, or street. The surveyor can point this out to you and be sure therefore that you have access to the land otherwise, you might be required to purchase a right of way.
One of the things you should ask yourself when buying a land, “Is the land cheap or expensive?” If the price of the land is too low, beware of this property.
There are many cases being reported where unsuspected victims fall for fake land titles despite all the regulations that were put in place to fight scammers. Therefore, you’ll have to be careful in dealing with strangers. If you have any doubts to the land you’re going to purchase, it’s best to consult a lawyer and ask questions. Protect yourself from fraud or hidden issues of the land you want to buy by being careful.
- Documentary Requirements for Land Transfer in the Philippines
- How to replace lost or damage Land Titles