Eastward is a US citizen, MBA graduate, and former business and management lecturer relocating to Cebu, Philippines with his lovely wife.
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 ex-pats 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 ex-pats 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 ex-pats 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 sight 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) needs to be 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 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.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
Question: Who will pay the capital gains tax and documentary stamp tax at the Bureau of Internal Revenue (BIR)?
Answer: Generally, the buyer will pay the capital gains tax and documentary stamp tax unless it is otherwise agreed upon and specified in the deed of sale.
Question: How can I verify that the title of some land in the Philippines is authentic?
Answer: The title should be stamped with an official government stamp and the title can be further verified by checking the number at the Register of Deeds.
Question: Can you check the authenticity of the land or property title by requesting a copy from the Register of Deeds and making a comparison?
Answer: Yes. Requesting a copy of the title from the Register of Deeds and comparing it with the seller's title would be an appropriate way to assure authenticity.
Question: If the buyer is already on step 5 (Register of Deeds), but is unable to obtain DAR clearance, can the seller buy the land back?
Answer: Optimally, the deed of sale would stipulate DAR clearance as a required part of the transaction (and delay payment until clearance is obtained or specify the return of any amount paid in case of complications). If this is not the case, the buyer should approach the seller regarding amending the deed of sale. Should the seller be unwilling to return the amount paid, the buyer may need to contact an attorney.
Question: If I sell half of my lot (400 square meters of 800 square meters, for example), do I need to provide the buyer with the title?
Answer: As this is a more complex transaction, I would advise you to contact an attorney. In the end, both parties will need a unique title as proof of ownership of their portion of the divided lot.
Question: Can we purchase land and pay via installments?
Answer: It is possible to purchase land and pay via installments. The details should be outlined in the Deed of Sale.
Question: How are the payments made to the seller if the buyer is directly buying from the property owner via an agent?
Answer: The price you agree to pay for the property will generally include the agent's fee. As a side note, be sure to use a well-established agent that you can trust.
Question: Is there a penalty for failure to pay the capital gain tax and documentary stamp tax within 30 days? If so, how much?
Answer: Yes, there are penalties for late payment. The amount will depend on the variables of your particular situation. For more information, I would like to refer you to this capital gains tax article by Garry S. Pagaspas https://taxacctgcenter.ph/overview-of-capital-gain...
Question: If the land or property is inherited from the parents of the seller (the wife inherited the property from her parents, for example), who will sign the deed of sale?
Answer: The title should be transferred into the name of the inheritor following the process here: https://www.lamudi.com.ph/journal/how-to-transfer-...
Then, the inheritor would rightfully be able to sign a deed of sale for the land or property.
Question: Who will pay to notarize the deed of sale, pay the transfer of property fee, and pay the transfer tax?
Answer: Generally, the buyer will pay to notarize the deed of sale (approximately 1% of the property price). The buyer also will pay the property fee and transfer tax unless specifically stated otherwise in the deed of sale. Agents are available to help with these processes but, as always, be sure to find one that is reputable and trustworthy.
Question: When will we need the help of a surveyor?
Answer: I would recommend getting the land surveyed prior to signing the Deed of Sale. Make sure the boundaries of the land are clearly marked and that there are no unexpected structures or other sources of dispute. This could save one from a lot of potential headaches and is relatively inexpensive (our survey costs approximately 5,000 pesos or less than $100 USD). For smaller or larger lots, prices may vary.
Question: Who will prepare the deed of sale when buying a home in the Philippines?
Answer: The deed of sale should be prepared by an attorney specializing in real estate. Either party can obtain a deed of sale document, but each party should have the document reviewed by an expert representing their interests (or a mutually trusted third party).
Question: Can a foreigner buy land in his Filipino son's name?
Answer: Assuming the Filipino son is a citizen of the Philippines, the son would be able to own land and lease it to the foreign parent. The land can be leased for 25 years with an option to renew for 25 more.
Question: Is a title transfer required before full payment is made for the land by the buyer or buyers attorney?
Answer: No. Transferring the title prior to making payment is not required. If an attorney advises this procedure, the details will need to be negotiated between the buyer/buyer's attorney and should be specified in the deed of sale (possibly by amendment to the existing deed of sale).
Question: What percent of property tax must I pay in the Philippines?
Answer: Property tax in the Philippines varies by municipality and province. It is a percentage of the assessed value (which is a percentage of the fair market value). More information can be found at https://www.foreclosurephilippines.com/real-proper...
Question: Did you hire a lawyer to help you with the process?
Answer: No. Fortunately, our process was fairly straight forward and the seller's daughter is a government official and was able to assist with the details.
Question: Is it possible to transfer a title to a buyer who purchased a lot from his or her mother when the title is in the father's name?
Answer: Yes. In the Philippines, the property is considered to be jointly owned by both the mother and the father, so the title transfer is possible.
Question: After we've paid the existing tax and have the notarized deed of sale, what is the next step?
Answer: The next step would be to pay the capital gains tax at the Bureau of Internal Revenue (BIR).
Question: Is it possible for the owner to transfer the title to the buyer before the price of the lot is paid in full?
Answer: Yes. The method and time period for payments and transfer of title can be agreed upon in the deed of sale. You may want to have a legal professional review the deed of sale prior to finalizing the agreement.
Question: How can we transfer the title and determine what tax needs to be paid when we buy land?
Answer: Hello. To secure ownership of the land, you will need to process the title transfer at the Register of Deeds. You can negotiate who will be responsible for the taxes in the deed of sale (which you opt to have an attorney prepare).
Question: If a land seller in the Phillippeans is not communicating with buyers regarding the legal subdivision of a property, what options do the buyers have?
Answer: In this case, you have a few options. You can contact the barangay (https://en.wikipedia.org/wiki/Barangay) captain or chairperson for assistance. Aside from this, an attorney would be advisable.
Question: How can I find a reputable real estate company/agent in order to buy raw land in Leyte, Philippines?
Answer: You may begin by contacting agents from Lamudi (https://www.lamudi.com.ph/). When browsing Lamudi, please look for the green checkmark and indication that the agent or agency is a certified partner. After making initial contact, you can ask for additional references and testimonials.
Question: Can a Filipino landowner who became a European citizen legally sell their land in the Philippines?
Answer: Yes. In this case, constitutionally-defined natural-born Filipinos who lost their Filipino citizenship through naturalization or foreign citizenship can apply to regain citizenship according to the Dual Citizenship under Republic Act No. 9225 (RA 9225) https://www.philippineconsulatela.org/dual-citizen...
© 2018 Eastward
Eastward (author) from Bangkok, Thailand on September 08, 2020:
Hi, Tine. Thanks for the question. The amount of taxes and fees can vary depending on location. I'd recommend this article by James Ryan Jonas to give you a general idea of what those taxes and fees might be https://www.pinoymoneytalk.com/costs-taxes-buying-...
As he mentions, the Deed of Sale should contain detailed information about who shoulders the cost of all taxes and fees involved in the transaction. The DoS should also specify the amount of commission and how/when it should be paid--which would typically be in accordance with the terms of payment.
Tine Mae on September 08, 2020:
Approximately how many percent of the total amount will be deducted of the total taxes and fees. For example, It amounts to 100,000,000, and all expenses will be subtractes to this either on the seller/ buyer side. How many percent would it be. Another question, when will the agents usually get their comissions?
Eastward (author) from Bangkok, Thailand on September 04, 2020:
Hi, Bob. I would recommend that the buyer pay for the land survey to verify the actual property boundaries and other issues that may arise in connection with the lot. A surveyor you trust will have your interests in mind and the surveys are inexpensive. Alternately, you could request that the seller survey or re-survey of the land (in case markers are missing or removed, or structures have been constructed that encroach on the land, etc.) before you are willing to sign a deed of sale. If you do foresee complications, it would be best to work together with both an attorney and surveyor.
Bob Hillier on September 04, 2020:
Who pays for survey of land, buyer or seller?
Eastward (author) from Bangkok, Thailand on August 27, 2020:
Although holding only the tax declaration is a common occurrence in the Philippines, I would advise against buying a lot without a title. As the government doesn't require the taxpayer to be the owner, the declaration doesn't give you adequate proof of ownership. If you do wish to try and transfer the tax declaration and title the land, it would be necessary for you and the seller to work with an experienced attorney. Good luck!
Christine Mae on August 27, 2020:
Someone I know is selling her lot but no title only tax declaration. I'm interested on the lot Should I take?
Eastward (author) from Bangkok, Thailand on August 04, 2020:
You are most welcome, Es. I'm glad you found it helpful. Thanks for the comment.
Es on August 04, 2020:
Thank you for this article. Helps me understand the process.
Eastward (author) from Bangkok, Thailand on August 04, 2020:
Hello and good day, delidev. I believe what you need to obtain is the Consularized SPA. It may be more complicated for you due to the lack of an embassy, but I would begin by checking with Department of State on the appropriate embassy or consulate with jurisdiction over your area. This article has some good info on the Consularized SPA itself: https://filipiknow.net/special-power-of-attorney/
delidev on August 03, 2020:
good day, I'm currently working abroad( in a US military base), we don't have an embassy here, and our contract requires us to stay one year+ before we get to go home, and right now we can't go home due to COVID19 related lockdowns.
Is there a workaround that I could do to get an Special Power of Attorney. because from what I read, I personally need to get one thru Philippine Embassy.
Eastward (author) from Bangkok, Thailand on June 08, 2020:
You are most welcome, Rene! Glad you found the information useful.
Rene Mikhael Bajaro Resurreccion on June 08, 2020:
Well this was immensely useful, no thanks to my government as usual and as expected.
And what's more, it's a foreigner who gave this excellent input. Shameful for us, but impressive for you. Many thanks good sir!
Eastward (author) from Bangkok, Thailand on June 04, 2020:
Hi, WR. I'd agree that FB posts can be pretty hit or miss. I'd start with a known real estate organization such as Lamudi https://www.lamudi.com.ph/ (or something similar). When searching the site, make sure the listing is by a green check, certified agent. Even with a certified agent, I'd ask for additional references/testimonials when making contact.
WR Smith on June 04, 2020:
I am an American married to a Filipina. My wife has expressed interest in buying/building a home in Ph.
Occasionally, my wife passes FB posts to me about land in Balamban, the area in which she is interested.
It's fine but it strikes me as not the most reliable way to go about
Eastward (author) from Bangkok, Thailand on March 04, 2020:
Thank you, Alexander. I appreciate the kind comment!
Alexander James Guckenberger from Maryland, United States of America on March 04, 2020:
This is very informative.
Eastward (author) from Bangkok, Thailand on March 01, 2020:
Hi, Joi. The assessed value will be determined by the tax authority and used to calculate property taxes. The market value is the reasonable price the land could be sold/bought for given the current market conditions.
Joi on March 01, 2020:
Is the appraise market value of the land considered as the selling price of the land? Or just basing the tax of the buyer to be paid.
Eastward (author) from Bangkok, Thailand on June 01, 2019:
My wife already had a TIN number from previous employment. She didn't apply for status change because she already had my last name when she got the TIN. If you don't have one, you should be able to get it at the BIR. Best of luck!
nhajo saguin on June 01, 2019:
Just a question, when your wife went to BIR did she have to apply for change status to get her TIN number? Or she only ask for verification of her TIN number. Thanks.
Eastward (author) from Bangkok, Thailand on May 30, 2019:
You're most welcome. Your mom and aunt should be able to get your TIN being your special power of attorney. And yes, be sure to get the CGT filed since you will incur penalties after 30 days. I know it is quite a convoluted process but you'll get there!
nhajo saguin on May 30, 2019:
Thank you for responding to my queries. It is considered high for the processing fee. But if the seller decided to file the CGT on her own, probably the fees on our side would lower down,most especially the processing fee. My special power of attorney is under my mom's and aunt's name and not on the fixer. And I'm not sure if my mom and aunt has to get my TIN, if the SPA would work to get my TIN. I contacted the seller of the property and told her that she needs to file the CGT right away since the deed of sale was notarized May 17th, and she might get a penalty if we went due. I was not expecting that it will be so hard when you are not actually there to do the works. Especially right now that school is starting next week in the PI. It will be more hard to get a hold for the seller,since she is a teacher and my aunt and mom will be busy with their kids to go to school.
Eastward (author) from Bangkok, Thailand on May 29, 2019:
Thanks for sharing the breakdown. The fees don't look so far off but the processing fee seems fairly generous in the fixer's favor (and it never hurts to have someone else try to confirm the fees). My wife did need to get both her and my TIN number from the BIR. If the fixer is your power of attorney, they should be able to get the TIN on your behalf. My wife and I hope the process continues to move along for you without too much difficulty!
nhajo saguin on May 29, 2019:
I was so surprised too when the fixer gave me the total cost. She also gave me the breakdown of the cost for the whole transaction:
1.BIR - P69,255 (Seller's reponsible payment for Capital Gains Tax)
2. TRANSFER TAX - P4,275
3. ASSESSOR (fee I guess) - P5,000
4. CANCELLATION (fee? For the old title?) - P10,000
5. REGISTER OF DEEDS - P15,000
6. PROCESSING FEE - P40,000
The fixer gave is this qoutes for everything. But she said that we don't have to do anything, they will only needed our ID's and Notarized SPA. When you went to BIR for Capital Gains Tax, did your wife has to get her TIN number or retrieve her TIN number? Because it's one of the requirements when filing CGT for BIR. If my representative has to do it theirselves, they might have a hard time because I don't know my TIN number. I tried contacting the agency in the PI on how to retrieve your TIN number but no response from them. And please let me know if the prices for the Assessor fee, and Transfer fee are sounds about right. The cancellation and register of deeds are quite high for me. I'm gonna need to ask my aunt and mom if they can inquire in the municipal for the fees. Thanks.
Eastward (author) from Bangkok, Thailand on May 28, 2019:
Hi, Nhajo. Thanks for the status update. Glad to hear you are making progress. If you have a whole day to set aside for the BIR once the capital gains and documentary tax stamp are taken care of, it would be best. You'll certainly want to set aside at least a half a day. The fixer's price sounds quite high and even though we were quoted less, we decided to do the processing on our own (with the help of family). Best of luck on your next steps!
nhajo saguin on May 28, 2019:
It's been a while since my last post here. We finally got the title and the cancellation of mortgage from the seller. And now we tried to speak with a fixer that will do the BIR through transfer of title and we are really surprised with the amount they are asking for us. We bought the property for 950k and the fixer gave us the computation they are asking which is 150k. And now we are running behind because the seller are communicating with us thoroughly, because we asked the seller that she should need to pay the capital gains tax and documentary stamp tax after they did the deed of sale. It's part of our memorandum of agreement that the seller would be responsible for the taxes. I'm not so sure if we really need a fixer for that amount. I told my SPA representative if they could just do it for us, since it is very expensive. I'll keep you posted once we finish the transaction with the BIR. Anyways how long does it usually takes to go to BIR? Was it whole day? Thanks.
Eastward (author) from Bangkok, Thailand on April 29, 2019:
You're most welcome, Nhajo! Looking forward to hearing the good news!
nhajo saguin on April 29, 2019:
Thank you so much for the information. I'll be posting something here once we got the title from the seller and move forward to getting the absolute deed of sale and get it notarize. Hoping to get it done very soon as the clock is ticking and don't want to waste anytime.
Eastward (author) from Bangkok, Thailand on April 27, 2019:
Hi Nhajo, You're most welcome. 2 years of processing is a long time but we are making a point to try our best do do things "by the book". If you continue using your Filipino passport for all transactions related to the property, I don't see an issue with your dual citizenship (though that wasn't a concern for us). My wife did do all the processing in the Philippines and says the SPA should still be valid. Best of luck with the transfer of title and just let us know if there's anything else we can do to help!
nhajo saguin on April 26, 2019:
Thank you for your response. Wow!! 2yrs. is longer than I thought. I am gonna be a US citizen by then. Will there be any problems if for example, that I bought the property when I am still Filipino Citizen? Then become US citizen or Dual citizen while the property is still in the process of transferring to my name (transfer of title)? Did your wife have to come back to PI for those process? I was thinking of going back once the paperwork is halfway done. But I'm not sure if the SPA that I gave to my mom and auntie will still be valid if did it myself but didn't finish the process and have to go back to US? Sorry, for so many questions. I just want to make sure I'm on the right path of doing this.
Eastward (author) from Bangkok, Thailand on April 24, 2019:
Hi, nhajo. Thanks for the comment. Hiring a fixer can certainly make things faster and easier for you and your representative. However, it can be a challenge to find one that will work for a reasonable price (especially knowing that you are overseas). We had some price quotes that were pretty unreasonable, so my wife and father-in-law have handled the processing. Although, it takes a lot of time and likely will require multiple trips back and forth from the BIR and other government offices. While it can differ from case to case, without a fixer you should be prepared for the process to take over a year (possibly two years).
nhajo saguin on April 24, 2019:
As I was browsing the website for some answers with my inquiries I found this thread. So recently, I just bought a property in PI (vacant lot). btw, I am a filipina from California. My husband and I bought this property to a teacher that happened to be the teacher of my mom. She's selling her lot because the lot was pawned in the bank, so she owed like P530k in the bank and we bought the property to her for P950k. We made a Memoramdum of Agreement with the seller, that we will pay her partially according to the conditions of the MOA we made, we want it to be legal and notarized. Unfortunately the attorney that looked the MOA that my husband made is saying that our MOA is like a Deed of sale so he was charging us P9,500 for the notarization of the MOA. So I told the seller and my representative ( SPA for my mom and aunt) to just not do the notarization of the moa if the atty. will charge us the same as deed of sale. We paid the 530k that the seller owed in the bank and we are just now waiting for the release of the title from the bank. And now, I am trying to find a real estate agent that will run as a fixer to do the process going to the bir, municipal hall to file everything. ( I don't know if it's worth it to hire an agent to help my representative run the paperworks FASTER and EASIER,so my mom doesn't have to keep going back to bir, etc. the agent will do that for them.) Or my representative can just it themselves to do all the paperworks. As soon as we get the title we will file the deed of sale and get notarize. So how long do you think it will take for the property to be under my name or how long will it take the process for the title to be mine? Thank you.
Eastward (author) from Bangkok, Thailand on March 26, 2019:
Hi, Mary! Thanks for reading. I'm glad you found the article helpful. To answer your questions:
1. You should get the tax declaration from the seller (it comes from the assessor in the municipality where the land is located).
2. It will be the title in the seller's name.
3. This will depend on who is responsible for processing the transfer of title and the payment details you specify in the deed of sale. The party responsible for the transfer of title will need to have an original copy.
Mary on March 26, 2019:
Hi! Thanks for this very helplful article. I have a few questions that im confused about:
1. Where do I get the Tax Declaration?
2. On step 5, do you mean that I should bring an orignal copy of title or the actual title (still named with the seller)?
3. I assume I pay the seller the moment I sign the deed of sale, once I paid and signed and have the DOS notarised, do I takr the original land title from the seller or the seller will get to keep it and i only need an original copy?
Eastward (author) from Bangkok, Thailand on December 22, 2018:
Thank you, Liz! We hope to follow-up with our experience of building a house here soon.
Liz Westwood from UK on December 22, 2018:
This is a clear and helpful guide to buying land in the Philippines.