Real estate costs (to purchase a house). Are there annual real estate taxes ? ).

[Bret]

To buy a house in Dumaguete vs in the USA? What are the differences in costs, fees and commissions? In the Philippines in general, are there real estate taxes to pay at all? 

[scott h]

3 hours ago, Bret said:

are there real estate taxes to pay at all?

Welcome to the forum. As to real estate taxes. Yes, property tax is due once a year. It is normally based (in my experience on the "zip code", for lack of a better term). What is interesting (in our city) if you pay your taxes early we get a 20% discount.

[Mike J]

Comparing the cost of buying a house here versus the USA is a bit like asking how much does it cost to live here versus the USA.  The answer almost always becomes "it depends".  Depends on location big city, small city, town, or province.  Depends on the size and type of construction of the house grand house, nice house, small house, livable house.  

I have not been back to the USA for 10 years but my wife tends to view real estate adds in the city where we used to live (Yakima, WA).  I glance over her shoulder occasionally and am amazed at how expensive it is for even small/moderate houses in what is a rather small city.   So it "appears" to me that buying a house here would be less expensive than buying in the US.  That being said many houses here may not appeal to a US buyer based on construction, location, neighbors, lack of infrastructure, etc.

Commissions, etc. on sales. <snip>If the real estate is a capital asset, the purchase is subject to capital gains tax (CGT) of 6% of the gross selling price or current fair market value, whichever is higher, and documentary stamp tax (DST) of 1.5% of the actual consideration for the sale.<end snip>.  It is common here for the seller to tell agents "I want to NET XX number of peso".  The agent then tries to sell the property at a price that provides commission, taxes, etc.  And to make it more complicated, the asking prices is often absurd to start with and unrealistic compared to any recent actual sales in the area.  Buying houses/property here can be a very risky, frustrating, and time consuming process.  Final warning - As far as I know there is no such thing as "Title Insurance" in the Philippines.  I think that, in an of itself, gives you an idea of how property sales work here.

Real estate taxes - Called property taxes here are due annually but are far lower than what you find anywhere in the US.  The low property taxes also mean that local schools, infrastructure, government services, etc. really do not compare to what you find in the US.

All in all, it is quite a bit less expensive here for affordable housing.   Should you decide to live in the Philippines, rent first for a few years, then buy/build if you like the area.

All of the above are my opinions of course.  I am very content here and moving to the Philippines was a good choice for me.

[hk blues]

5 hours ago, scott h said:

Welcome to the forum. As to real estate taxes. Yes, property tax is due once a year. It is normally based (in my experience on the "zip code", for lack of a better term). What is interesting (in our city) if you pay your taxes early we get a 20% discount.

We get 15% discount if we pay before end of December for the following year.  

[Gator]

It should also be noted that as a foreigner you are not permitted to own property here. They’re a few exceptions, like for condos and corporations that are owned by at least a 60% Filipino majority. If you’re married your name can go on the title / deed along with your wife’s name. 

[Guy F.]

Real estate agents' commissions in the Philippines are in the vicinity of 5 to 6%, similar to those in the US.

I didn't know about that "Document stamp" tax.

Edited September 2, 2023 by Guy F.

[Joey G]

On 9/1/2023 at 1:45 AM, Gator said:

It should also be noted that as a foreigner you are not permitted to own property here.

You can't own land.... but you can own the residence.  And there are several different scenario's that can be played out where a foreigner can own land. 

Actually this is the most accurate answer:

On 8/31/2023 at 6:52 PM, Mike J said:

The answer almost always becomes "it depends". 

My wife and I have weaved through several of the scenario's.... and the biggest hurdle is often getting clear title of what you're purchasing.  In the USA ,Title Insurance is usually purchased and rarely needed if a thorough job is done on checking the title history.  In the Philippines I can't find comparable Title Insurance, but do know that clear title is often hard to verify. The Philippines has some complicated laws about how land is inherited, sold, and acquired. "Costs, commissions and fees" are the easy part.

[Sea Turtle]

If purchasing inherited property,  ensure to have a non judicial or judicial partition provided by the seller along with the deed of sale, if one exists.  Without this document, relatives of the seller can make a claim.  There is no title insurance.  Just go to the ROD (register of deeds) and see who has a title filed.  This doesn't 100% protect the buyer,  as it is possible for an older title to appear and challenge the one in ROD.  It ends up in court,  with a judge to decide.  Attempted forgery of documents is more common than in the west.

Many busy people use an Attorney to handle a land buy or sell.  Attorneys function a little different than in western countries and can really help; if they want to.

 

 

[Guy F.]

23 hours ago, Guy F. said:

Real estate agents' commissions in the Philippines are in the vicinity of 5 to 6%, similar to those in the US.

 

The commission is split among all agents involved.