Buying property in the Philippines
A step-by-step guide to the buying process, taxes, title verification, and what foreigners need to know about ownership rules.
This guide is for informational purposes only. Always consult a licensed Philippine real estate lawyer before transacting.
The buying process — step by step
Search & shortlist
Browse listings and visit properties in person wherever possible. Engage a licensed real estate broker (PRC-registered) — their commission is paid by the seller in most cases. Check that the asking price is in line with zonal values from the Bureau of Internal Revenue (BIR), as these affect transfer taxes.
Due diligence & title verification
Before making an offer, verify the title at the Registry of Deeds covering the property. Request a certified true copy of the Transfer Certificate of Title (TCT) for land/houses or the Condominium Certificate of Title (CCT) for condos. Confirm the seller's name matches the title, check for encumbrances (mortgages, liens, adverse claims), and verify that real property taxes are paid up to date at the local assessor's office.
Offer & contract to sell
Submit a written offer. If accepted, a Contract to Sell (CTS) is signed and an earnest money deposit — typically 2–10% of the purchase price — is paid. The CTS outlines payment terms, completion date, and conditions. Have a lawyer review it before signing. The CTS is binding; back out without cause and you may forfeit the deposit.
Pay taxes & transfer fees
Once the full purchase price is settled, taxes must be paid before title transfer. These include: Capital Gains Tax (6% of selling price or zonal value, whichever is higher — paid by seller but often negotiated); Documentary Stamp Tax (1.5% — usually split); Transfer Tax (0.5–0.75% depending on location); and Registration Fee (based on a BIR schedule). Budget approximately 8–10% of the purchase price for all transfer costs.
Title transfer & turnover
The seller files the Capital Gains Tax return at the BIR within 30 days of notarisation. The buyer pays the DST, transfer tax, and registration fee. The Registry of Deeds cancels the seller's title and issues a new TCT/CCT in the buyer's name. This process typically takes 2–6 months. Keep copies of all receipts and documents.
Taxes & transfer costs
Budget 8–10% of the purchase price on top of the agreed selling price to cover all government taxes and transfer fees.
| Cost | Paid by | Rate |
|---|---|---|
| Capital Gains Tax | Seller | 6% of selling price or zonal value |
| Documentary Stamp Tax | Buyer / split | 1.5% of selling price |
| Transfer Tax | Buyer | 0.5–0.75% (varies by LGU) |
| Registration Fee | Buyer | Per BIR schedule (~0.25%) |
| Notarial Fee | Buyer | ~0.1–0.2% of price |
| Broker's Commission | Seller | 3–5% (negotiable) |
Foreign ownership rules
Condominiums — foreigners can buy
Under the Condominium Act (RA 4726), foreigners can own condominium units outright, subject to the 40% foreign ownership cap per building. This is the most straightforward route for non-citizens.
Land — foreigners cannot own
The Philippine Constitution prohibits foreign nationals from owning land. Foreigners cannot hold a Transfer Certificate of Title (TCT) for land or a house-and-lot in their name.
Long-term lease (up to 75 years)
Foreigners can lease land for an initial period of 50 years, renewable for 25 years under the Foreign Investments Act. This covers the period most people would need and is usable with a valid notarised lease agreement.
Buying through a Filipino spouse
A foreign national married to a Filipino citizen may have property registered in the Filipino spouse's name. Legal and tax advice is essential, and the arrangement carries risk if the marriage dissolves.
Buying through a corporation
A Philippine corporation with at least 60% Filipino equity can own land. Some foreigners invest through a corporation — consult a lawyer as this is complex and carries its own risks.
Common pitfalls to avoid
Mistakes that catch first-time buyers in the Philippines.
Buying without personally verifying the title at the Registry of Deeds — fake titles do exist.
Trusting verbal promises about amenities or completion dates for pre-selling projects — get everything in writing.
Overlooking unpaid real property taxes or association dues — these attach to the property, not the seller.
Not checking for road right-of-way or easement restrictions on the lot.
Paying large sums before the Contract to Sell is signed and notarised.
Skipping a lawyer for the deed of absolute sale — notarisation is required for title transfer.
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