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Foreigners and Property Buying: 11 Helpful Tips
The Philippines has long been a magnet for foreigners who wish to take up either temporary or permanent residency in a country that resembles a tropical paradise. Aside from its great weather, the country is also currently being seen as having one of the strongest economies in Asia due to the international corporations that are setting up offices in the nation.
While the constitution states that foreigners cannot own land in the Philippines, they can purchase a property through one of many conditions. In one of these exceptions, a foreign national can actually own a condo unit, so long as they only claim ownership to 40 percent of the single condo project unit. A second circumstance could have them building a house on a residential lot to be leased for 25 years (and re-leased for another 25 years). In another condition, the foreign national can form a corporation (of which he only owns 40 percent), which will then legally purchase and own a piece of land.
It’s important to keep in mind that whatever path a foreigner chooses to take, everything should be done legally. It’s no secret that the process will be quite complicated, which is why real estate expert Lamudi is giving foreign property buyers a guide to help them through the procedure.
1. Look for neighborhoods populated with expats
If you are looking for a property to call home, it might be a good idea to purchase one in expat-populated areas, such as Metro Manila (the cities of Makati, Parañaque, Quezon, and Taguig would be a good bet), Cebu, Angeles City in Pampanga, or Subic Freeport Zone.
There are several reasons why these areas are considered expat-friendly, and have amassed a considerable number of foreign national residents over the years. These reasons include the convenience of their location, secured communities and villages, family-friendly establishments and institutions, and proximity to transportation hubs. Angeles City and Subic were former U.S. military installations that have retained much of their American suburban ambiance.
2. Search online for available properties
To help you with your initial research, you may wish to check out online property listing platforms, where you can view thousands of properties for sale or for rent available in the Philippines. These listing platforms can show you the properties’ details, such as high-quality images, location, and price, as well as the seller’s or broker’s information. They even have search filters that allow you to customize your property search according to your preference, and are designed to allow you to compare properties simultaneously. They also have loan calculators to help you determine how much financing you would need per property.
3. Get a Special Resident Retirees Visa (SRRV)
Foreign nationals who want to retire in the Philippines must secure an SRRV issued by the Bureau of Immigration of the Republic of the Philippines. It is a special type of visa that grants the holder multiple-entry privileges and the right to stay in the country permanently or indefinitely. It may cost around $1,500 and has to be renewed with a yearly fee; however, an SSRV does give the foreign retiree the benefit of owning land in the Philippines.
4. Don’t be an impulsive buyer
Just because you have fallen in love with a property at first sight, it’s not always wise to purchase it straight away. Carefully evaluate the property first: check its condition, the neighborhood it is in, and perhaps the distance from key points of interest. It is also worth checking out are neighboring areas where better options might be located.
5. Consult with a licensed real estate broker
As a foreigner, it is important to work with a licensed real estate broker to help you find your perfect home in the Philippines. Find a broker who has a track record in successfully closing transactions and one who has strong emphasis on professionalism. A licensed broker is also an area or location expert who has plenty of connections and knows more about your desired area. Hence, he or she can show you plenty of properties that might suit your needs, taste, and budget. Moreover, a seasoned real estate agent can get you a great deal for your desired property.
6. Take not of the rules and regulations
Normally subdivisions and condominiums have a set of rules and regulations that must be followed in order to maintain a clean, orderly, and peaceful community. It is better to know these rules beforehand to see if you are comfortable conforming to all of them, or if you need to find another property should there be any rule that you do not agree with.
7. Verify that person selling the property is the actual owner
You may verify if the seller is the true owner of the property by asking for the original copy of the title and compare it against any valid—ideally government-issued—IDs presented. You may also seek the assistance of a licensed broker to verify the authenticity of said title in the local Registry of Deeds or the Land Registration Authority.
8. Make sure that the title is clean
It is also important to check the title for annotations, which documents that there is a certain claim to the property by another party. An example would be a bank or loan provider who writes entries (or annotates) in the land title to signify that the property is mortgaged (although ownership still resides with the owner). As a diligent property buyer, it is important to check titles for these annotations to ensure that the said property is free of encumbrances.
9. Get help from an attorney
Do not forget to consult an attorney to draft contacts, notarize documents, and to make sure that everything is authentic and legal. A lawyer can help ensure that you as a buyer are protected by the full extent of the law.
10. Don’t forget the transaction fees and taxes
Aside from shelling out money to pay for the property, keep in mind that there are other fees and taxes that need to be paid, such as Documentary Stamps Tax, Transfer Tax, Registration Fee, Notarial Fees, and Loan Fees. Taking these into consideration will let you know if your budget is still in check before signing the Contract of Sale.
11. Remember the required monthly dues
If you decide to purchase a condo, keep in mind that there are monthly fees that you need to settle. Commonly known as condo dues, the computation of which is based on the size of your unit. For example, for a 150-sqm unit in a condo that charges homeowners Php75/sqm, the monthly condo dues would be Php11,250. It is important to settle this every month as the money collected is used for the common areas’ upkeep and wages of security personnel, among many other property-related expenses
This article is originally posted on Lamudi Philippines.