 When buying or selling a property in the Philippines, one must know that there are still expenses to consider aside from the cost of the property itself. The taxes and fees that both buyers and sellers have to pay vary, depending on whether the seller or the buyer is an individual or a corporation. Another factor is the city where the property is located. The local government of each city computes the taxes involved in a real estate transaction differently. Here is a rundown of the taxes, fees and miscellaneous expenses involved when buying or selling a property, presuming the property is being purchased or sold by an individual and not a corporation: 1. Capital Gains Tax. Capital Gains Tax or CGT is 6% of the total selling price, zonal value or fair market value of the property, whichever is higher. This is paid at any authorized bank of the revenue district office (RDO) of the Bureau of Internal Revenue (BIR) where the property is located; 2. Documentary Stamps Tax. The tax rate for the Documentary Stamps Tax is 1.5 percent or PHP 15.00 for every PHP 1,000.00 of the property’s selling price, zonal value, fair market value, or whichever is higher. Like the CGT, this is paid at any authorized bank of the RDO of BIR where the property is located; 3. Transfer Tax. Transfer Tax is a tax imposed by the local government unit on the sale, donation, barter or any other means of transfering ownership of a real property. Since it is the city government that imposes this kind of tax on real property transfer, the rate depends on the city where the property is located. In Metro Manila, the rates usually fall around 50%-85% of 1% of the property’s selling price, zonal value, fair market value, or whichever is higher. The transfer tax is paid at the Treasurer's Office of the City Government. 4. Registration Fee. The Registration Fee is paid at the Registry of Deeds where the property is located. It is based on the value of consideration or the selling price of the property. Please refer to the link below for a more detailed explanation on the registration fees of LRA, including the registration fee table for the sale or purchase of a property. But just to give you an idea how much one has to pay at the Registry of Deeds when buying or selling a house, this is how to compute for it: a. If the selling price does not exceed PhP1,700.00.00, refer to the registration fee table found on the link; b. If the selling price exceeds PhP1,700,000.00, add PhP90.00 for every PhP20,000.00 or fraction thereof, in addition to the fee of PhP 8,796.00. e.g. Selling Price: PhP2,000,000.00 Registration Fee = ((PhP2,000,000.00 – PhP1,700,000.00)/hPP20,000.00)xPhP90.00+Php8,796.00 https://www.lra.gov.ph/mediafiles/pdf%20forms/LRA%20Fees/lrafeeschedule1.pdf 5. Real Estate Brokers' Professional Fee/Commission. It is standard practice that when a seller requests the service of a licensed broker to sell his/her property, the professional fee is 3-5% of the Selling Price. 6. Notarial Expenses. Attorney's Notarial Fee is usually 1% of the selling price. Of course, there are cheaper ones but make sure these are legitimate legal offices. 7. Certification Fees. Certification fees are usually imposed by the BIR and the local government but they only cost around PhP 500.00. 8. Miscellaneous Fees. Miscellaneous fees usually cover the costs of certified true copies of documents, tax clearances, etc. There are more taxes involved when the property is owned by a corporation or when the buyer is a corporation. So, before deciding to sell your property and naming your price, or before you buy a property, do consider all these additional expenses and seek the advice of a real estate professional. *Please note that these tax rates, fees and expenses may change in time.  Buying Your First Home So you’re finally ready to get that dream house you’ve been slaving away for, for decades. Now how and where do you start? House-hunting can be stressful and overwhelming, given the thousands of properties for sale in the Philippines. If you don’t plan ahead, you’re most likely in for a headache, not to mention wasted time and money. Here’s a rundown of the important things to keep in mind before you go out scouting for that dream home. 1. Know what you want. Where do you want to live? Which areas are you open to scouting? What kind of house do you like? Modern? Tropical? Are you looking just for newly built properties or even old and refurbished ones? Does your house have to face the sunrise? Are you more concerned about a big garden or a big master bedroom? The key is to be very specific with what you want. List them down before checking out the ads online and in newspapers, because the moment you start looking at all those beautiful properties with your broker/agent, you might be overwhelmed by the choices. 2. Set a budget and stick to it. One of the most common mistakes people make when scouting for their dream home is going beyond their budget. From the get-go, set a budget or a range, and stick to that. Looking at properties whose prices are higher than what you can really afford is a waste of time. Buyers who say they have an “open-budget” usually end up not buying anything for a really long time. By stating a budget, you’re not saying you don’t have money, you’re just saying you’re willing to spend this much on a property—and that is nothing wrong with that. Aim for a home you can really afford, not a place that will give you sleepless nights thinking how you’ll pay for it. A dream home doesn’t always have to be expensive. 3. Let a professional help you. There are so many real estate brokers and agents in the country, so make sure you find the right one. Do your own research, talk to several agents, or your friends who have been assisted by brokers. Look for someone who genuinely shows interest and passion in the real estate field. These are the ones who know a lot about the market and can advise you about great buying opportunities. It is also very important to choose a professional who is sincere in helping you find your dream home. A real estate broker does not only help you in your house-hunting, they can also assist you in the entire buying process–making an offer, negotiating with the seller, getting a loan and completing paperwork. A good real estate broker’s expertise can protect you from any pitfalls you might encounter during the process. 4. Enjoy the process. This is it! The joy you feel when you finally find and buy your own home is indescribable. But it may take time. House-hunting alone can take weeks, and the paperwork will take even longer. That’s okay. Relish this time. It’s all part of the experience. Enjoy your journey as well as your destination. Ask experts (architects, interior designs, etc). Involve your loved-ones, especially those who will be living in the house with you. Let your family and friends tag along. Their advice could be worth a million—or save you a million.  We know that housing loan is a very common (and usually chosen) option when buying a house. It allows families to buy their dream home without having to spend their entire lives saving up for it. Many banks are offering low interest rates and easy and affordable monthly amortizations for most buyers of real property. Even real estate developers avail of these bank financing options when purchasing a property. So what do we really have to know about housing loans? 1) Banks' interest rates can either be fixed or flexible. There are banks that offer fixed interest rates for the whole duration of the loan, be it a year or fifteen years. However, there is also what we call short-term flexible rates. These short term rates, if availed, can be very tricky. Usually, the interest rates are very low for the first year and the re-pricing happens in the succeeding years. Banks will never offer the same rate for both options. So it is advised that you go for fixed interest rates. 2.) Your approved loan is based not just on your capacity to pay but also on the collateral that you'll use for the loan. Even if you have a high approved loan, it is important that the appraised value of the collateral you'll be using for the loan is high as well. There are banks who are very conventional when appraising the value of a property. This means that their appraised value of the property is really low compared to the fair market value of the property.. There are some, on the other hand, who are fair in their appraisal reports. 3) There are additional expenses tied up to your loan. Most buyers who opt for bank financing don't know that there are additional expenses tied up to the loan. Some of these include mortgage registration fee, insurance premiums, taxes, etc. Most often, borrowers are unaware of these additional expenses. It is advisable that borrowers ask their banks about these expenses before pushing through with the loan. 4) Banks background check. It is common knowledge that before you're approved of a housing loan, the banks will do a background check on you. Banks share information with other banks. Not declaring everything in your application could raise a problem in your loan. One's integrity is at stake here as well so better be honest from the start than suffer the consequences later on. 5.) You can negotiate with the bank. Banks have quotas in terms of the number of housing loans they can have approved in a month. Of course they could negotiate the terms of payment with you. Deal with banks that you're comfortable with. * Bahaypinas is an accredited agent to most banks here in the Philippines. We would gladly assist you with your housing loans should you need one.  Styling Up a Small Space By Che Fernandez Got a small flat? Fret not. You don’t need a mansion to get the home you want. We look to experts for tips on how you can make your small space serve a huge purpose. § Choose your colors. While playing with dark colors may be tempting, lighter shades work better with smaller spaces. Pale blues, grays, greens, yellows and creams will make your space appear more open, according to nest.com. If you must use dark or deep hues, do so on trims and detailing, and use the same color as your walls. § Use multi-purpose furniture. Invest in functional pieces such as an ottoman that doubles as a storage unit or a desk that can be extended to serve as a dining table. Because you have limited space, make every furniture count. "Use two small round tables instead of one big coffee table. "They're better for traffic flow than those huge knee-knobbler coffeetables," designer Ken Fulk says on House Beautiful. § Mirror, mirror on the wall and on closet doors. Snow White’s stepmother may be on to something when she filled the castle with mirrors. Mirrors reflect images, doubling your room’s visual square footage. Floor-to-ceiling or wall-to-wall mirrors do the trick. § Let there be light. Do not block the flow of natural light into your house. Do away with heavy curtains or headboards that stand in the way of light or views that can connect your interior to a pretty landscape outside. The continuity of perspective will trick eyes into thinking your space is bigger. § Have a statement piece. Just because you have a small space doesn’t mean everything else should be small, too. Make a statement with one item, such as a huge sofa or reading chair. Having one prominent furniture or décor will create the illusion of a huge space more than several small pieces. § Customize if you can. Built-in shelves, storage nooks and furniture that are tailored to your room’s exact size and needs are ideal so you can put everything together. Install carefully measured pendant lamps so lighting does not take up precious space on the floor or your table. § Think vertically. Draw the eye upward by using catchy ceiling fixtures or hanging wall art or pictures so that the guests will tend to look up. Cabinets and bookshelves that go all the way to the ceiling will create the illusion of space. § Say NO to clutter. Arrange knickknacks, books and tabletop décor in a way that will let them breathe. Not everything has to be displayed. "Don't fill every inch," House Beautiful designer Chris Barrett says of accessorizing on shelves. "Group your collections and give them room to breathe." Preselling 101 Metro Manila has been bustling left and right with real estate projects. Different condominiums, townhouses and even subdivisions are sprouting in every corner. The property boom has resulted in overwhelming options for buyers. But before you grab that great-looking offer, take some time to read our guide to everything preselling: What is Preselling? In real estate, preselling properties, such as condominium units, townhouses, houses in subdivision projects, are being offered for sale even before they are completed, usually during the planning or construction stages. What Should You Consider When Buying Preselling Properties? The difference between making huge money on your real estate investment or losing everything you got on an unfinished project depends on these factors: The Developer. Who’s financing the project is as important as what’s being built. How do you know if the developer is reliable, trustworthy and can deliver quality projects on time? Do your research. Determine whether the developer has the financial capacity to complete the entire project. You can make a quick check with the HLURB to verify records of condominium and subdivision developers. In the case of townhouse developers, a visit to their previous finished projects is imperative before making decisions. Speak with previous buyers of these developers for insights on the quality of their work. If you encounter first-time developers, get to know them by setting an appointment to discuss the project. Ask questions about their company, their plans, their finances, and their contractors, architects and engineers who are involved in the project. The Location. Location is the single most important factor in real estate. It can make or break everything. Understand that most people prefer locations that are easily accessible to public transportation and important institutions like schools, hospitals and even malls. In the Philippines, a peaceful and flood-free neighborhood has become non-negotiable for most buyers as well. For investment purposes, check whether the development meets your needs now or in the future, Will its value increase over the long term? Or will it eventually become part of a crowded, deteriorating area? The Law of Supply and Demand. If there are too many properties being sold in a certain area, naturally, the prices should be competitive. Take advantage of this. However, if developments in one area are few and far between, sellers can mark up their prices as much as they want. Nowadays, the number of condominiums being constructed and sold at preselling rate is dangerously high. The competition for selling these condominiums can be really stiff, which makes it a buyer’s market right now. What are the benefits of buying preselling units? Lower Introductory Price. Almost always, the preselling price of a property is around 10 percent lower than when the property is completed. For investors, this means that they will get a chance to offer the same property for sale to prospective buyers for a higher price. For those who invested for personal use, they get an immediate added value to their property upon turnover. Based on our experience, the price of a preselling project increases by 5-10 percent upon turnover. Flexible Payment Schemes. Because the project is still under construction, sellers—especially first-time developers—can be lenient when it comes to payment schemes, and may offer buyers more flexible payment terms. You get to choose the best unit. Investing on preselling projects gives you first dibs on the best units in the project. The better unit you have, the higher its market value goes over time. What are the risks usually involved in buying/investing on preselling projects? Delayed turnover or failure of completion. This is the most common pitfall of preselling projects. There are instances when developers are not able to complete the project on time, or worse, not able to complete it at all for insufficient resources. This is why it is very important to know the developers before committing to buy from them. Changes with building plans without prior notice. Sometimes, developers deviate from their proposed building plans. Some investors or buyers may or may not like the idea depending on how big the changes are compared to the original plan. If you are the buyer/investor, always check the progress of the project from time to time. Difference between the perspective and the actual unit. An architectural perspective of what or how a project would look like can be very different from the actual project once it is completed. Sometimes, it is better. Other times, the result is not what you imagined it to be. This is why it’s important to see previous projects completed by the developer. |
Everything you need to know about Real Estate.
|
Find housing loan options.
|
Can you afford that house?
|
|
