How to Buy Property in the Philippines

Before starting your property search, establish a realistic budget that includes:

• Property price: The actual cost of the property
• Down payment: Typically 20-30% of the property price
• Closing costs: Usually 5-7% of the property value (taxes, fees, registration)
• Monthly amortization: If financing, ensure it doesn't exceed 30% of your monthly income
• Reserve fund: For renovations, moving costs, and emergencies

If you need financing, get pre-approved before house hunting:

Bank Financing

• Interest rates: 6-9% per annum
• Down payment: 20% minimum
• Term: Up to 20 years
• Requirements: Proof of income, IDs, employment certificate

Pag-IBIG Financing

• Interest rates: 5.375-6.375% per annum
• Down payment: 10-20%
• Term: Up to 30 years
• Maximum loan: PHP 6 million
• Requirement: Must be a Pag-IBIG member

Start your property search strategically:

• Use MLS.PH to browse listings
• Filter by location, price, and property type
• Schedule viewings with sellers or agents
• Visit multiple properties to compare
• Check at different times (morning, evening, weekday, weekend)
• Inspect the neighborhood for amenities and accessibility

When you find the right property:

• Submit a Letter of Intent (LOI) expressing your interest
• Pay a reservation fee (typically PHP 10,000-50,000)
• Negotiate the price and terms if needed
• Get the reservation fee receipt and LOI acknowledgment
• Note: Reservation fee is usually deducted from the down payment

Before finalizing, verify everything:

Title Verification

• Request a Certified True Copy of Title from the Registry of Deeds
• Check for liens, encumbrances, or adverse claims
• Verify the seller's ownership

Tax Verification

• Request the latest Real Property Tax receipts
• Check for unpaid taxes at the Assessor's Office
• Get a Certificate of No Tax Delinquency

Property Verification

• Confirm lot boundaries match the title
• Check building permits (for structures)
• Verify zoning compliance

Once due diligence is complete:

• Review the Contract to Sell (CTS) carefully
• Have a lawyer review the contract if possible
• Key items to check:
• Property details and boundaries
• Total price and payment schedule
• Penalties for late payment
• Turnover date
• Warranties and representations
• Sign and notarize the contract

Follow the agreed payment schedule:

Typical Payment Structure

• Reservation fee: PHP 10,000-50,000
• Down payment: 20-30% (can be split over several months)
• Balance: Through bank/Pag-IBIG financing or cash

Important

• Always get official receipts
• Keep copies of all payment records
• Monitor your loan application status

When full payment is made or financing is approved:

• Prepare the Deed of Absolute Sale (DOAS)
• Pay Capital Gains Tax (6% of selling price or zonal value, whichever is higher) — typically the seller's responsibility
• Pay Documentary Stamp Tax (1.5% of selling price)
• Sign and notarize the DOAS
• Get the owner's duplicate copy of the title

Complete the transfer of ownership:

• File at the BIR for tax clearance (CAR — Certificate Authorizing Registration)
• Pay Transfer Tax at the Treasurer's Office (0.5-0.75%)
• Register at the Registry of Deeds to get the new title in your name
• Pay registration fees (approximately 0.25% of property value)
• Update the Tax Declaration at the Assessor's Office

Finally, receive your property:

• Conduct final inspection before turnover
• Get all keys and access cards
• Transfer utility accounts to your name
• Keep all documents safe:
• Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
• Tax Declaration
• Deed of Absolute Sale
• Official receipts