The Philippines has an enticing economy that makes its real estate investment a worthy undertaking. Investing here as a foreigner is not as complicated as it’s being portrayed. However, those who experienced some frustration during the process are mostly wrongly informed. Hence, a proper guide and self-awareness with the latest news about The Philippines real estate industry are essential if you must succeed in buying any property of your choice. Below are eight steps to follow before you buy a real estate in the Philippines.
A step-by-step guide to buying real estate in the Philippines
- Choose a Location
Consider the demographics, climate, infrastructures, and landscape of different areas in the country before settling for a particular place. You can consult renowned real estate agents for enlightenment about the best location and property to invest in. Alternatively, AXE Real Estate displays a variety of valuable properties you can easily choose from.
- Hire an Agent
This is an integral step that will affect the entire procurement procedure. Even if it’s not your first time investing in real estate, you would want to hire a trustworthy and experienced agent to guide you through the process.
- Agree with the Seller
Once you choose your preferred property, meet the owner to reach an agreement on price and every other thing before starting a legal process. Your agent can be very useful at this stage.
- Hire a Lawyer
Just like hiring an agent, you should find a reliable, qualified, and competent lawyer to work with. You can trust your real estate agent to direct you to a good one. The lawyer will create a legal document called Deed of Absolute Sales to show the agreement between you and the seller to purchase the particular property.
- Get a Land Tax Declaration
Obtaining a Land Tax Declaration from the country’s Bureau of Internal Revenue (BIR) is vital as you will submit it at the Municipal Assessor’s office. This step is to be taken by both the seller and the buyer.
- Real Estate Tax Payment
This real estate tax is placed on the buyer. You must pay this at the Municipal Treasurer’s office. A document called Tax Declaration is used to calculate the tax on the acquired real estate property you will pay.
- Determine the property value and pay due taxes
The Municipal Assessor determines the property’s zonal or fair market value. Depending on which is higher, you will be charged between 0.5% to 0.75% of that for the transfer tax. This must be paid to the Assessor’s office.
Also, either you or the seller will be required to pay a Capital Gains Tax. This costs 6% of the market value, zonal value, or sales price – whichever costs most. The next payment to be made is a Documentary Stamp Tax, which costs 1.5% of a property’s market value. These last two taxes are to be paid at the BIR office.
- Registry of Deeds swaps buyers
At this point, you would pay 0.25% of the sales price as a Title Registration Fee. The Registry of Deeds will then award a new title to the buyer and cancel the seller’s title. Your lawyer must ensure you receive a Certificate of Title from the Registry of Deeds as proof of ownership.
This article highlights eight steps to buy a real estate property in the Philippines. Whatever you do, keep your agent and lawyer updated to avoid making costly mistakes. This stepwise guide is practical for buying most properties available in the Philippines.