The land-related law of Philippines does not allow the foreigners to own the land, however, they can invest in apartments as well as condos in high-rise buildings. The only restriction is that the foreign proportion does not exceed a total of 40 percent. The foreigners can buy a house, however, not a land on which the house is built. The lease on land is given up to 50 years and the same is renewable for the next 25 years.
Land by foreigners can also be acquired by the way of corporations. The property in Philippines, both in case of residents as well as non-residents, be acquired by the way of a simple agreement. The buyer signs a binding notarized Deed of Sale. While buying condominiums by the foreigners, a down payment of 10-30 percent is to be made. The ownership of these condo units is then evidenced by the Condominium Certificate of Title. But the process of buying land in the country by the foreigners is very tedious and cumbersome.
The following are the legal procedures carried out during the transfer of the title:
- Owner and buyer agree upon the sale of a piece of land. A Deed of Absolute Sale is created and notarized by the lawyer.
- Real estate tax is paid to the City Treasurer’s Office by the buyer.
- Market value of property is made.
- All the transfer taxes are paid by the buyer.
- Capital Gains Tax as well as Documentary Stamp Tax are paid.
- Old titles are canceled by the Registry Deed and the new ones are issued in the name of the buyer.
- Buyer becomes the new owner of the property.
The following is the charged ratio of the tax while making an investment in the property in Philippines, both by the residents as well as non-residents:
- Notary fee is charged at the rate of 1-2 percent of the property value.
- Local transfer tax is charged at the rate of 0.50 percent of the property value.
- Documentary stamp tax is charged at the rate of 1.5 percent of the property value.
- Real estate agent’s fee is charged at the rate of 3-5 percent of the property value.
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