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datkins587

buying a house in S. Leyte

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datkins587

Probably need to get my head checked but me and wife are considering buying the house were staying in Tomas Oppus. Australian with Filipina wife built it in 2007 to western designs. What do I need to concern myself with here in PI. I have owned many houses in USA and title companies pretty much handle everything. Kind of doubting they have that here.

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Dafey

The first and foremost thing I ask is if the title is clean and in the seller's name.

@Davaoeno has always been my go to guy for Real Estate questions...hopefully we'll hear from him soon.

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Davaoeno

There are no title insurance companies here.

You can not necessarily trust your attorney [ even more so than in the West]

Start by going to the ROD and getting a Certified True Copy of the Title. This is the only accurate way to know the current state of the Title.  

Make sure the seller has the Title in hand - and that there are no encumbrances listed on it 

Just because it was built to western designs [ I assume you meant western standards ?] it does not mean that it is worth western prices. Many people who build houses here to western standards never get their money back when they sell - so make sure you are not paying too much

Just because the seller tells you a house is built to certain standards does not mean that it is . Get an engineer to check it out 

Unlike in the West where the title company or lawyer does all the searches, prepares the docs , and makes sure that you are safe, here you are pretty much on your own. The lawyer/attorney will prepare the Deed of Sale - that is it . They do not make any adjustments for taxes, probably will not even check that the taxes are paid, will not process the transfer [you have to do it yourself or hire someone to do it - again not an easy thing since you make no mention of a Broker being involved ]

Make sure you get the Seller to give you a Tax Clearance [ not a Tax Declaration!]  That is the only way to ensure that the property taxes are current

If in a subdivision go to the HOA and make sure the fees are current

Edited by Davaoeno
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Dafey
22 minutes ago, Davaoeno said:

Start by going to the ROD and getting a Certified True Copy of the Title.

Sorry for my ignorance...what is ROD?

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Bama

 

Just now, Dafey said:

Sorry for my ignorance...what is ROD?

Registry of Deeds

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datkins587

No brokers involved, I dont think there is any here or civil engineers either. May have to get one out of Maasin City. House seems solid other than a few wall cracks in interior finished walls. I think thats typical but not sure.

I saw copies of  transfer of Title docs in their name. Is that the actual title or just a transfer form? I saw 2 of those, one from 1986 to previous owner and one in 2007 to current owner.

The other concern is a small sea wall they built and registered with DNR its basically a revocable permit to use a small area of sea shore maybe 12x60 feet to build wall. Im asumeing they can be transfered to us or do we even need it to be transfered!

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Woolf

remember to agree about who pay the 6% gains tax

here gains tax is 6% of the total sales price

some one else must know what more taxes is needed to pay

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Davaoeno

Regarding the Transfer of Title doc- normally I would say that that is the Title, but the fact that you say they have one from 1986 makes me guess that it isnt . [ when a transfer is effected you hand in the old Title and the ROD issues a new Title in the buyers name ]

Ah wait - you said " copies" and not the actual document , so its possible. Is it yellow ? [ new ones are now blue] 

 

DNR- cant help you there

2 minutes ago, Woolf said:

remember to agree about who pay the 6% gains tax

here gains tax is 6% of the total sales price

some one else must know what more taxes is needed to pay

Good advice. Who pays the capital gains tax [ which has nothing to do with capital gains! lol] is who the agreement specifies will pay it . I usually do 50-50 between seller and buyer for cgt and all transfer costs but its up to the parties themselves.

The actual cost to the BIR is 7.5% , that being 6% cgt and 1.5% doc stamps.   You will pay that amount based on either the actual sale price or the current zonal value - which ever is higher.  The zonal value can be obtained from the BIR or online 

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Bama

If you do all the "legal" checks that Davaoeno has suggested and everything is correct then the taxes for this transaction need to be considered.It's almost expected that the buyer will pay almost all of them including Capital Gains.All of this is negotiable though. I would certainly try to split up the CG tax bill if possible or perhaps lower the price of the house to allow for this. It is charged at a flat tax rate of 6% of the gross selling price, and must be paid within 30 days after the transaction.

Getting the seller to pay their share of negotiated Capital Gains tax can be a problem. Penalties for late payment of CG taxes are pretty severe.Consider your options carefully.

I see that Woolf has weighed in on this subject and he is most correct.6% of 5M PHP (for example) is not an insignificant number.

 

Edited by Bama
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datkins587

yep Im aware if the 6% capital gains tax and told seller he needs to pay. 

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datkins587

my thought is if possible to hold back enough pesos to cover CG tax. Just in case they do agree to pay but never do.

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Davaoeno
8 minutes ago, datkins587 said:

my thought is if possible to hold back enough pesos to cover CG tax. Just in case they do agree to pay but never do.

There is no need for a " hold back" - you just deduct it from the sales price . [ IF they have agreed to pay the cgt . Do NOT let that matter go unanswered and  not agreed on !   And agreed on when you make your deal  ] 

Edited by Davaoeno
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datkins587

makes since, she was vaque about it saying they were looking at their options. We dont have a deal in writeing yet, still negoitating price. About ready to just make a final offer, take it or leave it deal.

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SkyMan

Even if you've seen their copy of the title,  get a certified copy from the ROD. There may be liens on it the owner's copy won't show.  

Any CGT amount agreed to be paid by the seller should be held back from the sale and then you (your lawyer) should make sure that's paid quickly.  There's really no incentive for the seller to pay the CGT once they have the cash while you won't be able to get the title until it's paid with heavy fines if you wait for them to pay.  By law, sellers pay CGT and buyers pay DST but it's whatever you agree to in the DoS. If you insist they pay the CGT, they might simply raise the price to cover that and then you'll actually pay more because the CGT and DST will be based on the higher price. 

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Davaoeno
6 hours ago, Bama said:

must be paid within 30 days after the transaction

Just to be precise its within 30 days after the day that the Deed of Sale is notarized .   If something happens and you go past 30 days it is much cheaper to get the other party  to sign another Deed of Sale and get it notarized than it is to pay the penalty 

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