Boracay is the most popular resort area to live in the Philippines, and outside the major cities, is one of the most expensive places to buy real estate.
Taxes, Fees, and Other Costs
When budgeting for a home in the Philippines, there are some additional fees and taxes to keep in mind.
First, you’ll have to pay taxes when buying any type of real estate. A transfer tax of 0.5% paid on the sale price when transferring property title. There’s also a documentary Stamp tax of 1.5% on the sale price.
Most important, there’s an Annual Real Property Tax of 1% (provinces) or 2% (cities). This is payable every year.
On top of that, you’ll need to pay condo management fees. This is also due on an annual basis, and the exact cost will depend on the nature of your condo building.
• Notary Fees for processing documents.
• Capital Gains Tax on profits if reselling.
• Broker’s commission if using a real estate agent.
It’s important to keep in mind that, unlike some other countries in Asia, there are ongoing financial obligations when buying a house in the Philippines. Taxes and condo fees don’t end after you’ve bought the property itself!
On top of that, you’ll have to account for occasional repairs. Water leakage is particularly common during monsoon season, and is simply part of living in Southeast Asia.
New Housing vs. Resale Property
One option to consider is having a home built from scratch on a purchased lot. Likewise, pre-selling by developers is common for new projects.
While building a custom house means higher upfront costs, buyers can get more features and space for their budget compared to buying existing resale properties.
Working with a decent property developer in the Philippines is key, and finding qualified contractors to handle construction is also crucial.
Let’s face it: finding a reputable builder is difficult in developed nations, let alone in the Philippines. Be sure to carefully review all building standards and quality to avoid issues down the road.
Ideally, any real estate company you choose should have completed dozens of successful projects in the past.
We don’t suggest building a house in the Philippines if you aren’t already living here and familiar with both construction and the local real estate market though. It’s not the sort of thing you’d ever want to manage from the other side of the world.
For most people, it’ll be much easier to buy from either a property developer or through the existing resale market. The cost savings simply aren’t worth the risk.
The Philippines is home to a large variety of developers. With a large company, you can be reasonably assured of the build quality when compared to a random general contractor.
If you’re buying a resale property in the Philippines, here’s a full summary of the process:
• Connect with a real estate broker familiar with your target locations.
• Find a property for sale, make an offer, and negotiate the purchase price.
• Sign a reservation agreement and provide an earnest deposit.
• Hire a lawyer to review documents and represent you.
• Sign a deed of sale once terms are finalized.
• Transfer the title and register at the Registry of Deeds.
The Cost of Philippines Property Varies
To summarize, Philippines house prices vary substantially based on exact location, size, type, and amenities.
If you’re buying in the city, your specific neighborhood and proximity to mass transit are important factors.
Similarly, out on the islands, you’ll pay much larger amounts for property located near the beachfront. Each city has its own unique market dynamics.
Researching the pricing structure, home costs in the Philippines, and differences between new build versus resale will help your real estate transaction go smoothly!
On a final note, navigating the sales process smoothly will require an experienced broker and/or attorney, especially if you’re a foreign buyer who isn’t living here.
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