How to Buy Property

[hchoate 446]

Any old hands willing to provide a few bullet points, bases that must be tagged in the process?

[BossHog 39,282]

bullet points as requested (and I do appreciate the baseball metaphor of tagging bases):

 

• It will be mind-boggingly stupid
• You'll need to pay for something you can't own. Where I'm from we call that 'charity'.
• People get violent about land: prepare firearms
• Flip a profit if you do buy and get that shit outta country and into the NYSE as quickly as bionic-man possible.
• Things don't close at closing. You got years of getting paperwork for land you can't own.
• But if you want to donate a house to a cute woman, then you've come to the right place.

[smokey 22,005]

Add strange with no real escrow u will stress every day then stress more when someone offers to buy in cash 

[+to_dave007 6,061]

Make sure that the property is actually OWNED by the person who stands in front of you trying to sell it.

If the last person who is the registered owner is already dead..  then make a list which contains (a) his or her spouse, (b) his or her siblings, (c) his or her children, both legitimate and illegitimate, (d) the spouses of his or her children, (e) his or her grand children and great grandchildren, and their spouses..  Now..  be prepared that ANY of them may make a claim that the property should NOT have been sold to you.. and that THEY are the rightful owner.

Oh..  and be prepared to pay the estate taxes for that deceased owner.. and anyone else in the family who is deceased but with a possible claim ..  since no one else paid the taxes.

And wrap your head around the fact that in the Philippines..  capital gains tax is paid by the buyer most often..  and many sellers do NOT want you to have bank financing.

In short..  it's a learning process.. and an adventure.

Oh..  and lastly..  like @BossHogsays..  you can have ALL that fun.. for an asset that you will not own.

[BossHog 39,282]

3 hours ago, to_dave007 said:

Now..  be prepared that ANY of them may make a claim that the property should NOT have been sold to you.. and that THEY are the rightful owner.

This may sound like over-kill but it's saved our bacon a few times. When you are at a closing and have all the itchy-palm relatives of the seller lined up then make sure and take pictures of them. Filipinos love having their pictures taken. That way they can't dispute the sale and say they were unaware of it.

 

[Fresh 52]

4 hours ago, smokey said:

 no real escrow

All the banks are set up for escrow transactions, the problems is Filipino sellers aren't interested in it.

[smokey 22,005]

$$$$$$$$$$$$$$$$ seller will let u pay if u want

[HongKongPhooey 438]

4 hours ago, BossHog said:

This may sound like over-kill but it's saved our bacon a few times. When you are at a closing and have all the itchy-palm relatives of the seller lined up then make sure and take pictures of them. Filipinos love having their pictures taken. That way they can't dispute the sale and say they were unaware of it.

 

We told all parties with a claim we wouldn’t pay cash; only deposit into their bank accounts. Unsurprisingly, none of them had bank accounts (or at least that’s their story). At closing, my wife arranged with our bank (PNB) for everyone to come in, right before the branch closed, to open accounts and deposit the payment. The bank was happy to facilitate because they probably met whatever quota they had for the month that day. 
 

It wasn’t my brilliant idea, probably common/makes a lot of sense, but I would have never thought of doing that.

[seanm 83]

this is probably the best article i have found on the subject

Quote

 

https://toughnickel.com/real-estate/how-to-buy-land-in-the-philippines?fbclid=IwAR2PiEjBENHR6qMVGLHwxFMxFwZvXQxpwfUerGeqCiVxBdpIOZq4iXbVr2I

How to Buy Land in the Philippines
EASTWARD
Eastward is a US citizen, MBA graduate, and former business and management lecturer relocating to Cebu, Philippines with his lovely wife.

Getting Started
First and foremost, there are ownership restrictions for foreigners in the Philippines. You can own a house or condo but not the land it rests on. However, you can obtain a long-term lease for land. Those 35+ can also obtain a retirement visa by putting $50,000 USD or the equivalent in a Philippine bank and then can use that money in government-approved investments (including real estate).

In my case, I am married to a Filipina and we purchased our land in her name. My name is on the documents and I needed to provide personal information in addition to my wife's, however my rights are extremely limited. This is something that aspiring ex-pats will also want to keep in mind and be sure they make any decisions thoughtfully.

Our plan is to build a house on the land that we own and lease that house long term to my American parents (who we will rent from). Of course, depending on your situation, you will need to come up with an agreement that all parties are comfortable with. Single ex-pats looking for a house, condo, or long-term land lease in the Philippines would be well served with the assistance of a trusted Filipino friend, family member, or agent.

For ex-pats with a trusted Filipino advocate, it may be best to stay out of the land purchasing process as much as possible. While most Filipinos are trustworthy, as with any country, there are those that are not. It is not unheard of for prices to rise at the sight of a foreigner.

Step One: Check to Be Sure the Land Owner You Are Buying From Has the Original Title
Sometimes land and residency agreements in the Philippines reach back for generations. Things are becoming more strict and organized but you may still run into situations where the title was never transferred to the seller in order to avoid the associated fees. This is a complex situation that you certainly want to avoid. If the seller does not possess the original title for the property, continue your search elsewhere.

Step Two: The Deed of Sale, Signed and Notarized
After you have found the land you desire and have agreed on a price with the seller, you'll need to read the deed of sale carefully and sign it in front of a notary public. The deed of sale should also state whether the buyer or seller is responsible for the capital gains tax and documentary stamp tax. Notaries set their own fees but a normal fee is around 1% of the purchase price.

The capital gains tax (6% of the purchase price) and documentary stamp tax (1% of the purchase price) needs to be paid to the Bureau of Internal Revenue (BIR) within the 30 days after the deed has been signed.

Step Three: Certificate of Authorizing Registration (CAR) and Tax Clearance (TCL) from the BIR
Once the capital gains tax and documentary stamp tax are paid, you need to process the CAR and TCL at the Bureau of Internal Revenue. These are prerequisites for a title transfer and there are small fees associated with these steps (around 150 Philippine pesos).

We ran into an issue due to our lot being part of a subdivided property. We needed to follow up with BIR repeatedly until the arrangements between the seller and multiple buyers were clarified.

This CAR and TCL step took a few months to complete and required multiple visits to the BIR. My wife and her father were able to complete this step, however, there are "fixers" that will also handle this process for a fee.

Step Four: Pay the Transfer Fee on Property and Transfer Tax
With the CAR and TCL certificates in your possession, you then need to pay the transfer fee and tax at the provincial treasurer's office. This should be done ASAP as there is a fee applied for each day from the CAR certificate date to the date the transfer tax is paid.

In addition to the CAR and TCL, you will need to bring the following with you to the treasurer's office (may vary by province):

Step Five: The Register of Deeds
With your transfer fees and taxes paid, you are almost ready to get your title. The Register of Deeds will have some requirements you need to satisfy as well. You will need an affidavit of publication, affidavit as to the nationality of any owner (if not a citizen of the Philippines), and the owner's copy of the title.

There may be other requirements as well such as DAR (Department of Agrarian Reform) clearance if the land is agricultural, approved subdivision plans if the land is part of a subdivision, etc.

Step Six: Celebrate
Congratulations! You will now have the title transferred to you and you are the proud owner of land in the Philippines. It has been a long and strenuous journey so take some time to relax and enjoy your own piece of paradise.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

Questions & Answers

Question: Who will pay the capital gains tax and documentary stamp tax at the Bureau of Internal Revenue (BIR)?
Answer: Generally, the buyer will pay the capital gains tax and documentary stamp tax unless it is otherwise agreed upon and specified in the deed of sale.

Question: How can I verify that the title of some land in the Philippines is authentic?
Answer: The title should be stamped with an official government stamp and the title can be further verified by checking the number at the Register of Deeds.

Question: How are the payments made to the seller if the buyer is directly buying from the property owner via an agent?
Answer: The price you agree to pay for the property will generally include the agent's fee. As a side note, be sure to use a well-established agent that you can trust.

Question: Can you check the authenticity of the land or property title by requesting a copy from the Register of Deeds and making a comparison?
Answer: Yes. Requesting a copy of the title from the Register of Deeds and comparing it with the seller's title would be an appropriate way to assure authenticity.

Question: Who will pay to notarize the deed of sale, pay the transfer of property fee, and pay the transfer tax?
Answer: Generally, the buyer will pay to notarize the deed of sale (approximately 1% of the property price). The buyer also will pay the property fee and transfer tax unless specifically stated otherwise in the deed of sale. Agents are available to help with these processes but, as always, be sure to find one that is reputable and trustworthy.

Question: Is a title transfer required before full payment is made for the land by the buyer or buyers attorney?
Answer: No. Transferring the title prior to making payment is not required. If an attorney advises this procedure, the details will need to be negotiated between the buyer/buyer's attorney and should be specified in the deed of sale (possibly by amendment to the existing deed of sale).

Question: If the land or property is inherited from the parents of the seller (the wife inherited the property from her parents, for example), who will sign the deed of sale?
Answer: The title should be transferred into the name of the inheritor following the process here:  https://www.lamudi.com.ph/journal/how-to-transfer-...Then, the inheritor would rightfully be able to sign a deed of sale for the land or property.

Question: When will we need the help of a surveyor?
Answer: I would recommend getting the land surveyed prior to signing the Deed of Sale. Make sure the boundaries of the land are clearly marked and that there are no unexpected structures or other sources of dispute. This could save one from a lot of potential headaches and is relatively inexpensive (our survey costs approximately 5,000 pesos or less than $100 USD). For smaller or larger lots, prices may vary.

Question: Who will prepare the deed of sale when buying a home in the Philippines?
Answer: The deed of sale should be prepared by an attorney specializing in real estate. Either party can obtain a deed of sale document, but each party should have the document reviewed by an expert representing their interests (or a mutually trusted third party).

Question: If I sell half of my lot (400 square meters of 800 square meters, for example), do I need to provide the buyer with the title?
Answer: As this is a more complex transaction, I would advise you to contact an attorney. In the end, both parties will need a unique title as proof of ownership of their portion of the divided lot.

Question: Can a foreigner buy land in his Filipino son's name?
Answer: Assuming the Filipino son is a citizen of the Philippines, the son would be able to own land and lease it to the foreign parent. The land can be leased for 25 years with an option to renew for 25 more.

Question: What percent of property tax must I pay in the Philippines?
Answer: Property tax in the Philippines varies by municipality and province. It is a percentage of the assessed value (which is a percentage of the fair market value). More information can be found at https://www.foreclosurephilippines.com/real-proper...

Question: Did you hire a lawyer to help you with the process?
Answer: No. Fortunately, our process was fairly straight forward and the seller's daughter is a government official and was able to assist with the details.

Question: If the buyer is already on step 5 (Register of Deeds), but is unable to obtain DAR clearance, can the seller buy the land back?
Answer: Optimally, the deed of sale would stipulate DAR clearance as a required part of the transaction (and delay payment until clearance is obtained or specify the return of any amount paid in case of complications). If this is not the case, the buyer should approach the seller regarding amending the deed of sale. Should the seller be unwilling to return the amount paid, the buyer may need to contact an attorney.

Question: Is there a penalty for failure to pay the capital gain tax and documentary stamp tax within 30 days? If so, how much?

Answer: Yes, there are penalties for late payment. The amount will depend on the variables of your particular situation. For more information, I would like to refer you to this capital gains tax article by Garry S. Pagaspas https://taxacctgcenter.ph/overview-of-capital-gain...

Question: Is it possible to transfer a title to a buyer who purchased a lot from his or her mother when the title is in the father's name?
Answer: Yes. In the Philippines, the property is considered to be jointly owned by both the mother and the father, so the title transfer is possible.

Question: After we've paid the existing tax and have the notarized deed of sale, what is the next step?
Answer: The next step would be to pay the capital gains tax at the Bureau of Internal Revenue (BIR).

Question: Can we purchase land and pay via installments?
Answer: It is possible to purchase land and pay via installments. The details should be outlined in the Deed of Sale.

Question: Is it possible for the owner to transfer the title to the buyer before the price of the lot is paid in full?
Answer: Yes. The method and time period for payments and transfer of title can be agreed upon in the deed of sale. You may want to have a legal professional review the deed of sale prior to finalizing the agreement.

Question: How can we transfer the title and determine what tax needs to be paid when we buy land?
Answer: Hello. To secure ownership of the land, you will need to process the title transfer at the Register of Deeds. You can negotiate who will be responsible for the taxes in the deed of sale (which you opt to have an attorney prepare).

Question: If a land seller in the Phillippeans is not communicating with buyers regarding the legal subdivision of a property, what options do the buyers have?
Answer: In this case, you have a few options. You can contact the barangay (https://en.wikipedia.org/wiki/Barangay) captain or chairperson for assistance. Aside from this, an attorney would be advisable.

Question: How can I find a reputable real estate company/agent in order to buy raw land in Leyte, Philippines?
Answer: You may begin by contacting agents from Lamudi (https://www.lamudi.com.ph/). When browsing Lamudi, please look for the green checkmark and indication that the agent or agency is a certified partner. After making initial contact, you can ask for additional references and testimonials.

Question: Can a Filipino landowner who became a European citizen legally sell their land in the Philippines?
Answer: Yes. In this case, constitutionally-defined natural-born Filipinos who lost their Filipino citizenship through naturalization or foreign citizenship can apply to regain citizenship according to the Dual Citizenship under Republic Act No. 9225 (RA 9225) https://www.philippineconsulatela.org/dual-citizen...