Buying a property in the Philippines: A step-by-step guide

The Philippines is sizzling hot for real estate investors these days! With gorgeous beaches, a vibrant culture and a booming economy, who wouldn’t want a piece of the action?

But before you pack your bags and start browsing listings, understanding the legalities and processes involved in buying a property in the Philippines is crucial. 

This guide will answer your questions about eligibility, cost, documentation and the step-by-step process of buying a property in the Philippines. We’ll also introduce TransferGo, a platform that allows you to make international money transfers faster, and for less.

Let’s get started.

Can I buy property in the Philippines?

Yes, you can buy property in the Philippines, but fully owning one depends on your nationality.  

The Philippines has some rules about foreigners owning land outright. But don’t worry; there are still ways to get your own slice of paradise! You can buy property in the Philippines through:

• Condominium ownership: The Philippine Condominium Act allows foreigners to purchase condominium units in buildings. However, the catch is that at least 60% of the units should remain owned by Filipino citizens. 
• Long-term lease: Another route foreigners use is entering a long-term lease agreement. The duration is typically 50 years, with a possibility of renewal. Yet again, the land ownership should be by a Filipino citizen. This option paves the way for a foreigner to build property on the leased land.
• Corporation ownership: If you’re a foreigner, you can purchase property through a corporation. The company’s ownership must also be 60% owned by Filipino citizens. Using this route, you can invest in a Filipino company, and the company helps you buy the land. This route is usually riddled with complex legal and financial considerations. 
• Ownership through marriage: If your spouse is a Filipino citizen, you can buy property in their name. Your name won’t be on the title, but you can include it in the contract to purchase the property. The unfortunate thing about this route is that you can only partially own the property in case of a divorce. But not all hope is lost! You may still have the freedom to sell and collect the proceeds.

Consulting with a reputable lawyer specialising in Philippine real estate is highly recommended, regardless of your route.

How much money do you need to buy a house in the Philippines?

So, how much will buying a property in the Philippines cost? It depends on the following few things:

Location

The Philippines is a vast country with both busy cities and quiet countryside. So, where would you like to settle or do business?

If your pick is a major city like Manila, Quezon or Davao, be ready to pay more. These cities have populations in the millions and are popular with business hubs. They’re well developed with well-connected roads and other social amenities, as well as plenty of restaurants, markets and healthcare facilities. 

Maybe you prefer stunning mountain views like Tagaytay or chilling by the beach in Dumaguete. The more desirable the location, the higher the property price.

Property type, size and amenities

Spacious luxury condominiums in prime locations will naturally cost more than a modest house in a rural setting. The size of the property is also a cost factor. More significant properties in huge cities cost an arm and a leg compared to the same-sized property in rural areas. 

The proximity to social amenities like educational institutions, hospitals and sporting facilities also affects costs. As does proximity to roads and other transportation means, such as airports and train stations.

Extra cost considerations

Besides the above cost constraints, here are some extra costs to consider when buying a property in the Philippines:

• Purchase price (the initial cost of the property itself).
• Foreigners make numerous tax payments to the government throughout the buying process. These may include transfer taxes, documentary stamp tax and potentially capital gains tax for the seller.
• Registration fees are associated with registering the property under your name.
• If you use a real estate broker, they will charge a commission fee.
• Additional costs like permits and licenses also apply if you build or renovate a property on leased land.

If you want to properly budget for buying property in the Philippines, always allocate a buffer for unforeseen expenses. You should also collaborate with reliable financial institutions that aid the seamless transfer of funds if you’re outside the Philippines.

TransferGo can help with this. 

Our high-speed, hassle-free platform allows you to send money worldwide. In three easy steps, you can pay for any fee we have listed above for acquiring a Filipino property. You can use it both as an individual or business.

What documents do I need to buy a property in the Philippines?

Alright, so you’ve found your dream property. Now comes the paperwork. What documents will you need? Here’s a general list of the documents you need:

• Passport: Valid passport with proof of entry into the Philippines
• Alien certification of registration (ACR): Required for foreigners residing long-term in the Philippines.
• Proof of funds: Documentation demonstrating your financial capacity to purchase the property
• Marriage certificate: If you’re buying through your spouse, the Filipino government will need a marriage certificate as proof.
• Tax identification number (TIN): A Philippine tax identification number
• Sales and purchase agreement (SPA): The formal agreement between you and the seller
• Transfer certificate of title (TCT): This document verifies ownership of the property

Ensure all documents are appropriately translated and notarised if required to avoid any back and forth.

How to buy property in the Philippines?

After you’ve gathered all the documents, here are the steps for buying property in the Philippines:

Step 1: Research and due diligence

Do your research! This is where you figure out what kind of place you want and how much you can spend. This research will help you decide on your ideal location. It also lets you set a realistic budget, considering all associated costs. Before buying property in the Philippines, research property listings online or consult a reputable real estate agent to understand current market trends and pricing in your desired area.

Step 2: Find the right property

It’s best to consult the experts to find the right property. A knowledgeable real estate agent can help you navigate listings, schedule property viewings and negotiate the purchase price.

Even after finding a few you fancy, don’t skip a thorough inspection of the property—tag along a qualified professional to identify any potential issues.

Step 3: Make an offer and secure the property

Once you’ve found the right property, negotiate a fair purchase price with the seller.

After you’ve landed at an agreed price, sign the sales and purchase agreement (SPA). This agreement outlines the terms of the sale, including the purchase price, payment schedule and conveyance date. This document is legally binding, so ensure you understand all terms before signing.

Step 4: Secure funding

If you have the funds, transfer them to buying property in the Philippines. However, if you need financial aid, explore financing options from Philippine banks or international lenders. Some developers may also offer financing plans.

After securing the funds from these institutions, prepare for transfers to the seller and relevant authorities for taxes and fees.

Step 5: Property transfer and registration

Fund transfers may offer you a breather, but the process still has a few last steps. 

The first is to settle all associated taxes and registration fees with the government agencies. Next, the Transfer Certificate of Title (TCT) is processed. The TCT will be transferred to your name or spouse upon successful registration.

Step 6: Closing and property management

Finally, after completing all the steps above, attend the closing meeting with your lawyer and real estate agent to finalise the transaction and ensure all documents are in order.

If you need any help with property management, consider hiring a property management company. These professionals with knowledge of the Filipino market handle rentals or maintenance if you plan to use the property as an investment.

Perks of buying a property in the Philippines

Owning and buying a property in the Philippines can be an excellent investment! Here’s how you can win big:

Financial perks

Buying a property in the Philippines, whether residential or commercial, opens potential financial doors. 

The foremost income channel is when you decide to rent the space out. Buying a home in a highly populated area in the Philippines is lucrative because you can set the rent higher than in rural areas. You can do the same for a commercial space.

The second lucrative perk is buying property in the Philippines, which possibly becomes a long-term investment. With the bustling and growing economy of the country, with time, there are possibilities for property value appreciation. 

Buying a home in the Philippines today might cost you this year, but that number might be worth several more in a decade.

Lifestyle perks

The Philippines is super affordable compared to most Western places. Groceries, rent, the whole shebang—it’s easy on the wallet. 

A retiree buying a home in the Philippines can fully take advantage of this benefit and still live a comfortable life.

Another benefit that links to your lifestyle is the simple allure of living in beautiful scenery and rich culture. Imagine sipping your morning coffee on your balcony, facing a lovely, lush panorama daily. Bliss!

Considerations beyond the cost of buying property in the Philippines

Beyond costs, documentation and perks, you still need to remember a few things. This section will highlight some things you must remember before, during and after buying property in the Philippines.

Safety and security

Safety is important! There can be some crime in big cities like Manila. However, many safe areas, like Palawan, have a strong police presence. Still, even after buying property in the Philippines, exercise caution while you walk and do business. Avoid the red zones and take the appropriate measures when moving to these locations.

Healthcare

After buying a home in the Philippines and living there, knowing your healthcare options is wise. The country has both private and public medical facilities. The public facilities are affordable, but overcrowding is typical. Private healthcare options tend to offer better services but with higher pricing.

Getting medical insurance can help you properly navigate the healthcare system.

To buy or not to buy property in the Philippines?

So, should you buy property in the Philippines? 

If you have the funds and it fits your plans, go for it!

Buying property in the Philippines, residential or commercial, is linked to many perks. You can enjoy a lavish lifestyle and potentially make a good investment. On the other hand, you should be informed about the healthcare system and the crime rate and take the appropriate precautions to keep yourself safe and well. 

Buying a home in the Philippines can involve additional complexities depending on the specific circumstances. However, you can consult a qualified property lawyer specialising in Philippine real estate to ensure a smooth and successful buying experience.

When you transfer your funds, ensure you use a reliable and trustworthy platform like TransferGo.

FAQ 

Can a British citizen buy property in the Philippines?

Brits can buy in the Philippines but can’t fully own the land. Condos with at least 60% Filipino ownership are okay. Long leases and buying through your spouse or a corporation are also viable options. Brits can own property in the Philippines.

Can a foreigner buy a property in the Philippines?

Foreigners can buy property, but limitations apply. Land ownership is restricted.

Can a dual citizen own property in the Philippines?

Thanks to Republic Act 9225, Filipinos with dual citizenship enjoy the same rights as natural-born Filipinos regarding owning land in the Philippines. 

What kind of property can foreigners buy in the Philippines?

Condominiums, long-term land leases and buying through corporations and spouses are options for foreigners.

______________

Sign up to send money to the Philippines with TransferGo today. You can also earn money every time you invite a friend to make seamless, affordable money transfers.