How to Buy Land in the Philippines
First and foremost, there are ownership restrictions for foreigners in the Philippines. You can own a house or condo but not the land it rests on. However, you can obtain a long-term lease for land. Those 35+ can also obtain a retirement visa by putting $50,000 USD or the equivalent in a Philippine bank and then can use that money in government approved investments (including real estate).
In my case, I am married to a Filipina and we purchased our land in her name. My name is on the documents and I needed to provide personal information in addition to my wife's, however my rights are extremely limited. This is something that aspiring expats will also want to keep in mind and be sure they make any decisions thoughtfully.
Our plan is to build a house on the land that we own and lease that house long term to my American parents (who we will rent from). Of course, depending on your situation, you will need to come up with an agreement that all parties are comfortable with. Single expats looking for a house, condo, or long-term land lease in the Philippines would be well served with the assistance of a trusted Filipino friend, family member, or agent.
For expats with a trusted Filipino advocate, it may be best to stay out of the land purchasing process as much as possible. While most Filipinos are trustworthy, as with any country, there are those that are not. It is not unheard of for prices to rise at the site of a foreigner.
Step One: Check to be sure the land owner you are buying from has the original title
Sometimes land and residency agreements in the Philippines reach back for generations. Things are becoming more strict and organized but you may still run into situations where the title was never transferred to the seller in order to avoid the associated fees. This is a complex situation that you certainly want to avoid. If the seller does not possess the original title for the property, continue your search elsewhere.
Step Two: The deed of sale, signed and notarized
After you have found the land you desire and have agreed on a price with the seller, you'll need to read the deed of sale carefully and sign it in front of a notary public. The deed of sale should also state whether the buyer or seller is responsible for the capital gains tax and documentary stamp tax. Notaries set their own fees but a normal fee is around 1% of the purchase price.
The capital gains tax (6% of the purchase price) and documentary stamp tax (1% of the purchase price) need to paid to the Bureau of Internal Revenue (BIR) within the 30 days after the deed has been signed.
Step Three: Certificate of Authorizing Registration (CAR) and Tax Clearance (TCL) from the BIR
Once the capital gains tax and documentary stamp tax are paid, you need to process the CAR and TCL at the Bureau of Internal Revenue. These are prerequisites for a title transfer and there are small fees associated with these steps (around 150 Philippine pesos).
We ran into a an issue due to our lot being part of a subdivided property. We needed to follow up with BIR repeatedly until the arrangements between the seller and multiple buyers were clarified.
This CAR and TCL step took a few months to complete and required multiple visits to the BIR. My wife and her father were able to complete this step, however, there are "fixers" that will also handle this process for a fee.
Step Four: Pay the Transfer Fee on Property and Transfer Tax
With the CAR and TCL certificates in your possession, you then need to pay the transfer fee and tax at the provincial treasurer's office. This should be done ASAP as there is a fee applied for each day from the CAR certificate date to the date the transfer tax is paid.
In addition to the CAR and TCL, you will need to bring the following with you to the treasurer's office (may vary by province):
Step Five: The Register of Deeds
With your transfer fees and taxes paid, you are almost ready to get your title. The Register of Deeds will have some requirements you need to satisfy as well. You will need an affidavit of publication, affidavit as to the nationality of any owner (if not a citizen of the Philippines), and the owner's copy of the title.
There may be other requirements as well such as DAR (Department of Agrarian Reform) clearance if the land is agricultural, approved subdivision plans if the land is part of a subdivision, etc.
Step Six: Celebrate
Congratulations! You will now have the title transferred to you and you are the proud owner of land in the Philippines. It has been a long and strenuous journey so take some time to relax and enjoy your own piece of paradise.
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