Things you should take care when you buy a property


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The best way to use your hard earned money from abroad is: By a land. Being a land owner will give you always a solid basic for doing business for your living.

Become a land owner

Your duties
It is always a good practice to inspect the land/property that you are going to buy. Inspect not only the physical location but also check the Register of Deeds to make sure, everything about the property is in the right place and legally documented. The Register of Deeds will help you to verify the authenticity of the title and the legitimacy of the owner, who is selling you the property.

buying a lot The process of buying a land/property does not end with paying the price to the seller and executing a Deed of Sale. What's important for you to remember: once the Deed of Sale has been signed and notarized, deadline for tax payments are already in effect. If you fail to meet this deadlines, the penalty and surcharges will certainly make a dent on your pocket.

Sometimes, if payments has been delayed for several years, this might be even bigger than the value of the land/property at the time it was bought. Even before the land/property is purchased, you should already plan on the Land Title transfer. Remember: that ownership is not complete until you register the title under your name.

These are the steps for transferring a land title:

1. File and secure the documentary requirements at the Registry of Deeds and Municipal or Provincial Assessor's Office.

2. Secure assessment of transfer taxes at the Bureau of Internal Revenue (BIR) and Municipal or City Treasurer's Office.

3. File documents at the BIR for the issuance of Certificate Authorizing Registration (CAR) or BIR Clearance.

4. Pay the Transfer Taxes and secure the Tax Clearance.

5. File documents at the Registry of Deeds for the issuance of new land title.

6. File the documents at the Municipal or Provincial Assessors Office for the issuance of new Tax Declaration.

It is important to note that this step is often missed out. Transferring ownership of a Tax Declaration should always be done after Land Title Transfer because the name on the Land Title should be the same with the name indicated on the Tax Declaration. These steps will require you to go back and forth between multiple government agencies. In addition the whole procedure could take several months to complete, especially if there are problems with the land/property's existing documents or records.

The process might require constant follow ups with the government agencies. Sometimes, it is necessary to personally visit the respective agencies to follow up and speed up the process.

The other cost in buying the land/property:

1. Philippines Capital Gain Tax
6% of actual sale price. This is paid by the seller but in some cases it might be expected that the buyer pays. This percentage could differ if the property assessed is being used by a business or the title is owned by a corporation. In this case the percentage is 7.5%

2. Philippines Documentary Stamp Tax
1.5% of the actual sale price. This is paid either the buyer or the seller upon agreement. But normally, it is the buyer who shoulders the cost

3. Philippines Transfer Tax
0.5% of the actual sale price

4. Philippines Registration Fee
0.25% of the actual sale price

It is not easy to buy property. But it is more better that our hard earned money will go to the property than we spent it in leisure.

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