Buying and, consequentially owning, a residential property in the Philippines can be considered a significant investment. After all, residential properties can cost up to tens of millions of pesos.

But whether you pay for this purchase in cash or through monthly mortgage payments, there are different financial obligations you need to fulfill before, during, and after closing the deal.

We hope this guide can help you understand and plan for the costs associated with owning properties in the Philippines.

#1 – Registration Fees

When you purchase or sell a home or any other property, the transaction needs to have a record in the Registry of Deeds office. These registration fees are crucial in ensuring that the true owner has the proper legal documentation of their ownership of such property.

Some of these fees include:

• Registration Fee = The cost may vary depending on the value of the property. This is the fee to pay for recording the sale of the property with the Registry of Deeds.
• Documentary Stamp Tax = This is the tax that you pay for certain documents, such as contracts, deeds of sale, and more. The amount varies depending on the type of document.

#2 – Notarial Fees

A notary public will have to verify and sign documents associated with the sale or purchase of a property, such as deeds of sale. Of course, you’ll need to pay for notarial fees to have these documents signed. The cost will vary depending on how complex the document is and the value of the particular transaction.

#3 – Transfer Tax

A transfer tax is imposed on a transaction that involves transfer of property ownership. In most cases, the buyer will pay for this amount which will depend on the local government that regulates the area where the property is located.

#4 – Capital Gains Tax

When selling a property anywhere in the Philippines, you will need to pay for the capital gains tax. The seller of a property usually shoulders this amount which is the higher value between the property’s current fair market value and 6% of the gross selling price.

#5 – Real Property Taxes

If you own a property (whether land, building, or any other improvements), you will need to pay real property tax for it which is on a yearly basis. The local government of the area where the property is located will determine the amount, depending on the property’s assessed value.

Bonus – Homeowner Association Dues

Those living in condominiums, subdivisions, or other gated communities usually need to pay homeowner association dues. These usually cover the costs of operating and maintaining the common areas of the community, security, and other amenities shared by the members. This amount will vary depending on the developer first, then on what the agreed-upon amount between the homeowner-members.

Conclusion:

There are definitely financial obligations you’ll need to fulfill when you own properties in Cebu and other areas in the Philippines. Knowing what these are can help you plan and pay for them so you can continuously enjoy the property.

Please note that these are only general fees and taxes associated with homeownership. It’s always best to consult with a legal expert or tax professional for actual costs.

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