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 verified 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 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 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 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