Comprehensive FAQ with answers for real estate in the Philippines.
Buying a Property.
What are the requirements for buying a property in the Philippines?
Requirements include valid government-issued IDs, proof of income (if financing), a Tax Identification Number (TIN), and a reservation fee (for pre-selling properties). If buying from a developer, a Contract to Sell (CTS) is issued after payment of the down payment.
Can foreigners buy real estate in the Philippines?
Foreigners cannot own land but can buy condominium units (up to 40% of a building’s total units). They can also lease land for up to 50 years (renewable for 25 more years) or invest in a corporation that owns real estate (with at least 60% Filipino ownership).
What is the process of purchasing a property?
-
Choose a property and verify ownership (request a copy of the title).
-
Sign a Contract to Sell and pay the required deposit.
-
Secure bank or in-house financing if needed.
-
Execute the Deed of Absolute Sale upon full payment.
-
Pay necessary taxes and fees.
-
Transfer the title and tax declarations to the new owner.
How much are the taxes and fees when buying a property?
-
Transfer Tax: 0.5% to 0.75% of property value
-
Documentary Stamp Tax: 1.5% of the selling price or zonal value (whichever is higher)
-
Registration Fee: 0.25% of the property value
-
Notarial Fee: Around 1% of the selling price
-
Other processing fees: Varies depending on the transaction
How can I verify if a property title is clean and legitimate?
Request a Certified True Copy of the Title from the Registry of Deeds and check for encumbrances or annotations. Verify the title with the Land Registration Authority (LRA) and ensure the Tax Declaration is up to date.
Selling a Property
What documents do I need to sell my property?
- Original Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
- Tax Declaration for Land and Improvement
- Certificate of No Encumbrance
- Special Power of Attorney (if selling on behalf of someone)
- Valid IDs of seller and buyer
What are the taxes and fees involved when selling real estate?
- Capital Gains Tax (CGT): 6% of the selling price or zonal value (whichever is higher)
- Documentary Stamp Tax: 1.5% (usually shouldered by the buyer)
- Broker’s Commission: Typically 3% to 5% of the selling price
- Notarial and processing fees
Can I sell a property if I still have an outstanding loan on it?
Yes, but the buyer needs to settle the loan balance first or assume the mortgage with lender approval. The title transfer will only proceed after the loan is cleared.
Leasing a Property (For Landlords and Tenants)
What are the common lease terms in the Philippines?
Lease terms vary but typically:
- Residential leases: 1 year (renewable)
- Commercial leases: 3 to 5 years
- Security deposit: Equivalent to 2-3 months’ rent
- Advance rent: 1-2 months
Can a landlord increase the rent anytime?
No. Under the Rent Control Act, landlords can only increase rent by 2% to 10% per year, depending on rental amount and lease term.
What should be included in a lease contract?
The contract should specify:
- Rental amount and due date
- Lease term and renewal conditions
- Security deposit and advance payment
- Maintenance responsibilities
- Grounds for termination or eviction
Who is responsible for repairs and maintenance?
The landlord is responsible for major repairs affecting the property’s livability, while tenants should handle minor maintenance and damages caused by negligence.
Property Management
What does a property management company do?
They handle tenant screening, rent collection, maintenance, legal compliance, and marketing of rental properties. They ensure smooth operations for landlords.
How much does property management cost?
Fees range from 5% to 10% of the monthly rent for residential properties and higher for commercial properties.
What happens if a tenant fails to pay rent?
The landlord can issue a Demand Letter for payment. If unresolved, legal eviction may be pursued through a court order.
Property Appraisal
What is a real estate appraisal?
It is the process of determining a property’s fair market value, usually done by a licensed real estate appraiser.
How is property value determined?
Based on:
- Market value of similar properties
- Location and demand
- Property condition and improvements
- Zoning and land classification
How much does a property appraisal cost?
Fees depend on the property type but typically start at ₱5,000 for residential properties and higher for commercial properties.
How long does an appraisal take?
The appraisal process takes 1 to 2 weeks, depending on the property size and location.
