In recent years, the Philippine economy has developed rapidly, attracting the attention of many overseas investors. The Philippines' real estate, due to its low price and high rental yield, has become the first choice of many investors. As a foreigner, what are the policies and regulations for buying a house in the Philippines?
Can Foreigners Buy Properties in Philippines?
Foreigners are allowed to buy properties in Philippines, and they can buy as many as they want. Foreign buyers should provide valid passport and drivers’ licence, as well as the eligible bank account or tax certificate. However, they can only buy apartments. Houses or land plots are not open to foreigners. What’s more, if more than 40% of the building is held by foreigners, then other foreigners can no longer buy properties of this building. For example, if there are 100 apartments in a building. 40 are owned by non-Filipino, then the rest 60 apartments can only be sold to Filipino.
Although foreigners cannot directly buy land, there are other indirect ways to obtain one. The first method is to purchase shares in the country club; the second method is to purchase Philippine land through setting a company. The third method is to marry a Filipino.
Can Foreigners Get Mortgages in Philippines?
Like locals, foreigners can also apply for bank loans if they are unable to pay off the house in one lump sum. Those who hold a working visa can generally get a loan of up to 70% for a maximum of 10 years. However, it is best for applicants to understand whether the bank they already have an account has opened any branches in the Philippines, and if there is one, it will be easier to apply for a bank loan. Not all banks support loans to foreigners. Therefore, it is best to find a local real estate agent, they will know better which bank has an easier accessibility.
After paying the full payment, you can get the Condominium Certificate of Title (CCT), and the property is officially yours.
What are the Fees to be Paid?
For buyers, the fees to be paid are actually very simple:
a. Local transfer tax: 0.75% of the total buying price
b. Notary fees: Usually 1-2% depending on the circumstance
c. Registration fees: 1%
While for sellers, there are two kinds of fees to be paid:
a. Real estate agent fee: 3-5%
b. Capital gains tax: 6%
Buying a house is an important matter, so buyers must understand the corresponding policies and regulations and prepare the required materials in advance. The easiest way is to find a real estate agent, which can save you a lot of trouble.