Tips When Buying Real Properties in the Philippines

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If you’re looking to buy a property in the Philippines, you’ll want to make sure you know what you’re doing. There are a lot of things to consider – from getting your finances in order, to buying real properties, to making an offer. In this blog post, we’ll give you 15 tips that will help make the process go as smoothly as possible including paying real property tax. So whether you’re a first-time buyer or have bought property before, be sure to read on!

What is Real Property Tax?

A real property tax is a levy imposed on real or immovable properties by the government. In the Philippines, real property taxes are collected by the local government units (LGUs).

The amount of real property tax to be paid is based on the property’s assessed value, which is determined by the LGU where the property is located. The tax rates also vary depending on the municipality, city, or province where the property is located.

What are the Documents needed to check when buying real properties?

To make sure that you are buying a legitimate property, it is essential to check and verify the following documents:

  1. Title of the propertyThis document proves that the seller is indeed the property owner and has the legal right to sell it. The title should also be free from any liens or encumbrances.
  2. Tax declaration – This document shows that the property taxes have been up-to-date.
  3. Latest real estate tax receipt is proof that the real property taxes have been paid for the current year.
  4. Transfer certificate of title (TCT) or Condominium Certificate of Title (CCT) – This document will be issued by the Register of Deeds once the sale is registered and the new owner’s name is reflected on the title.
  5. Blueprint or survey plan with technical description – This document is needed to determine the exact location of the property and its boundaries.
  6. Certificate of Locational Clearance (CLC) – This document is issued by the Housing and Land Use Regulatory Board (HLURB) and certifies that the property is located in a properly zoned area and does not violate any zoning regulations.
  7. Certificate of No-Objection to Transfer (CNOBT) – If the property is part of a subdivision or housing project, CNOT must secure this document from the developer to ensure that there are no objections to the transfer of ownership the unit being sold.
  8. Approved building plans and occupancy permit. For newly constructed buildings.-These must secure these documents from the local building office to ensure that the construction has been approved and that the building is safe to occupy.
  9. Deed of real estate mortgage – If the property being bought is still under a loan or mortgage, this document must show that the new buyer will assume the loan balance.
  10. Special power of attorney (SPA) – If the seller cannot be present during the sale, they may authorize a representative to sign on their behalf through this document.
  11. Certificate of capital gains tax – This must secure this document from the Bureau of Internal Revenue (BIR) if the property is sold within five years from the date it was acquired, as capital gains tax will be imposed on the sale.
  12. Certification from the Bureau of Internal Revenue (BIR) – This document certifies that the seller has no outstanding tax liabilities with the BIR.
  13. Clearance from the Homeowners’ Association (if applicable) – If the property is located in a subdivision or housing project with a homeowners’ association, It must secure this clearance to ensure that there are no delinquent dues or other obligations that need to be settled.
  14. Certificate of non-encumbrance – This document proves that the bought property is free from any legal claims or encumbrances.
  15. Official receipt – This serves as proof of payment for the property’s purchase price.

These are just some of the most critical documents you need to check when buying real estate properties. Make sure to do your due diligence to avoid any problems in the future.

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Here are 15 tips you should know about Real Estate Properties Tax in the Philippines:

  1. Real Estate Properties Tax is levied on all real property owners in the Philippines.
  2. Amount of tax imposed depends on the assessed value of the property and the location and type of property.
  3. Pay real Estate Properties Tax annually.
  4. The real property tax rates vary depending on the municipality or city where the property is located.
  5. Tax rates are generally lower in rural areas than in urban areas.
  6. Property owner usually pays real Estate Properties Tax, but it can also be paid by the lessee or occupant of the property.
  7. If the real property is leased, the lessee is generally responsible for paying the Real Estate Properties Tax.
  8. It may pay the Real Estate Properties Tax in advance for up to five (5) years.
  9. A real property owner who fails to pay the Real Estate Properties Tax within the prescribed period shall be liable to pay a late payment penalty of two percent (2%) per month.
  10. Owner who fails to pay the Real Estate Properties Tax for two (2) consecutive years shall be liable to pay a surcharge of twenty percent (20%) of the total amount of tax due.
  11. When the owner fails to pay the Real Estate Properties Tax for three (3) consecutive years or more shall be liable to pay a surcharge of fifty percent (50%) of the total amount of tax due.
  12. Any sale, transfer, or conveyance of real property will not exempt the new owner from paying the Real Estate Properties Tax.
  13. Tax may be paid online through the official website of the Department of Interior and Local Government (DILG).
  14. In addition, it may also pay the real property tax at any authorized collecting bank or payment center.
  15. For more information on Real Estate Properties Tax, please visit the Department of Interior and Local Government (DILG) website at www.dilg.gov.ph.

15 Tips When Buying Real Estate Properties in the Philippines

Tip 1: Check the Real Estate Property Tax.

It is one of the most important things to consider when buying a real estate property in the Philippines. Ensure that you know how much the property tax is and that it is up to date.

Tip 2: Check the Documents Needed in Buying Real Properties in the Philippines.

These include the title, deed of sale, and other relevant documents. Ensure that all these documents are in order and that you have a copy of them.

Tip 3: Consider the location of the real estate property.

It is essential to consider the property’s site before making a purchase. Make sure that the property is located in a safe and secure place.

Tip 4: Consider the type of real estate property you want to buy.

There are different types of real estate properties available in the Philippines. You can choose from commercial, residential, or industrial properties.

Tip 5: Consider the size of the real estate property.

Make sure that the property is of the right size for your needs.

Tip 6: Check the amenities offered by the real estate property.

Some real estate properties provide special amenities such as swimming pools, gyms, and playgrounds. If you need these amenities, make sure that the property you are considering has them.

Tip 7: Consider the price of the real estate property.

Make sure that you are getting a good deal on the property by comparing prices with other real estate properties in the same area.

Tip 8: Check the terms of the sale.

Make sure that you understand the terms of the deal before making a purchase.

Tip 9: Consider your financing options.

There are different financing options available when buying a real estate property in the Philippines. Make sure that you understand these options and choose the best one for you.

Tip 10: Get a real estate agent.

A real estate agent can help you find the right property and negotiate the price.

Tip 11: Have a lawyer review the contract.

It is vital to have a lawyer review the contract before signing it.

Tip 12: Get a home inspection.

Before you finalize the purchase, make sure that you get a home inspection to check for any problems with the property.

Tip 13: Get insurance for the property.

It is essential to get insurance for the parcel to protect your investment.

Tip 14: Be prepared for negotiations.

Be ready to negotiate the price of the real estate property.

Tip 15: Have realistic expectations.

Buying a real estate property is a big decision, and it is essential to have realistic expectations about the process and the outcome.

Who Pays Real Properties Tax in the Philippines

The property owner pays the real property tax in the Philippines. The tax is based on the value of the property and any improvements made to it. The tax is paid annually and is due on the first day of January.

The real property tax can be paid at any city or municipal treasurer’s office in the Philippines. The payment can be made in cash, through a bank draft, or credit card.

Absolute property tax exemptions are available for certain types of properties, such as those used for agricultural purposes, those owned by the government, and those used for religious or charitable purposes. There are also exemptions available for senior citizens and persons with disabilities.

How To Transfer Real Properties Ownership in the Philippines

The process of transferring real property ownership in the Philippines is called conveyancing. The transfer of ownership must be done through a public instrument, such as a deed of sale, and must be registered with the Registry of Deeds.

The deed of sale must be signed by the seller and the buyer and must contain the following information:

  • names of the parties involved;
  • address of the property;
  • a description of the property;
  • price agreed upon by the parties;
  • date of the sale; and
  • signatures of witnesses.

The deed of sale must then be registered with the Registry of Deeds, the required documents and the registration fee. Once the act is written, the buyer will be the property’s new owner.

How To File Real Property Tax?

The real property tax in the Philippines is filed and paid annually. The tax return must be filed on or before the 20th day of January.

The following documents must accompany the tax return:

  • Latest real property tax bill;
  • A copy of the title of the property;
  • Copy of the deed of sale, if applicable; and
  • A copy of the real estate tax declaration.

These documents can be submitted to the city or municipal treasurer’s office where the property is located. The payment can be made in cash, through a bank draft, or credit card.

What Are The Penalties For Late Payment Of Real Property Tax?

If the real property tax is not paid on or before the due date, a penalty of 2% per month will be imposed. This penalty will be applied to the unpaid balance of the tax.

In addition, interest at the rate of 12% per year will be charged on the unpaid balance of the tax. This interest will accrue from the date the tax is due until it is paid in full.

Conclusion

So whether you’re a first-time buyer or have bought property before, be sure to read on! And if you need any help along the way, don’t hesitate to give us a call. We’ll be more than happy to answer any of your questions and guide you through the process.

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