What to pay when buying property in Philippines?

What to pay when buying property in Philippines?

Purchasing real estate in the Philippines is a major investment, and the process can be both complicated and costly. Whether you’re buying a condo or a house, there are a few key costs that you should be aware of and plan for when preparing your budget.

The first cost you should consider is the down payment. This is often the largest expenditure up-front when making a real estate purchase, since it will be taken out of your pocket and applied to the purchase price. Generally, the standard down payment for a residential property in the Philippines is 10 to 20 percent of the total purchase price, however you may need to put down more or less depending on the lender you work with.

Another major expense associated with buying a property in the Philippines is capital gains taxes or value-added tax, if applicable. This fee is a form of tax that applies when purchasing real estate, and typically covers the recording of a title transfer. Generally, this fee covers 6 percent of the total purchase price for CGT and 12 percent for the VAT, unless you are buying the property with a loan. If that’s the case, the stamp taxes will generally apply to the total loan amount.

In addition to stamp taxes and down payments, you should also plan to pay for other costs associated with the purchase, such as appraisal, inspection and broker fees, as well as attorney or notary fees. In most cases, these costs can easily be covered by the purchase price of the property, however, it’s important to do your research and make sure you know exactly how much needs to be budgeted for these additional expenses.

Lastly, you should also double-check with your lender about any potential closing costs you may need to pay. These are sets of administrative costs that are typically associated with closing a real estate purchase, such as title insurance and document processing fees. In many cases, these costs can be rolled into the amount financed with your lender, but it’s still important to understand what potential closing costs may be involved so you can plan for them in your budget.

Purchasing a property in the Philippines is a major investment, and one that should not be taken lightly. By understanding the various costs involved and planning a budget to accommodate them, you’ll have a much better chance of making the process stress-free and successful.

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