In part 1 of this 2-part post, we discussed the different aspects that a home buyer should take into consideration when choosing and buying property in the Philippines. These included location, security, developer’s track record and the costs associated with the property purchase. In this second part of the series we continue to tackle the other factors that a home buyer should consider when acquiring a home in the Philippines.
You should also estimate property taxes for your property. Property tax or real estate tax is paid yearly to your city or municipal assessor on all property that you own. Property tax is paid on all types of property – condo, house and lot, townhouse, residential or commercial. Real estate tax rate is usually pegged at 1.5% to 2% of the assessed value of your property depending on the city or municipality (you can get . Assessment is done by the city or municipal assessor and is determined once your property is ready for occupancy.
Generally assessment level for residential properties is at 20% of fair market value. For pre-selling projects you can estimate the fair market value by getting 50% of the selling price. Let us say you bought a condo unit at the pre-selling price of P2,000,000. Let’s say the fair market value of your condo unit is pegged at Php1,000,000. Assuming a tax rate of 1.5% the estimated real estate tax for your unit is Php15,000 per year (1.5% of Php1,000,000).
Find Out How Much The Monthly Dues Are
Condominium and homeowners’ associations usually charge monthly dues from residents that will cover services such as security, garbage disposal, building maintenance, and other expenses in common areas. The monthly dues are usually reflected on a per square meter basis. For example if the monthly dues are P80 per square meter and you have a 50 square meter condo unit then your monthly due is pegged at Php4,000.
Be Aware Of Condominium Or Subdivision Rules
Condos (and subdivisions alike) implement house rules which residents are expected to conform to. Therefore, you should take these into consideration when choosing the property you will invest in to make sure that the rules will suit your lifestyle and you can conform to them.
Some condo rules include:
*Limits to the number of occupants allowed per unit
*Prescribing proper attire in certain common areas like the lobby, elevators, corridors and garages. Usually pajamas and/or bathrobes are not allowed in these areas
*Rules on eating, smoking or sleeping in common areas.
*If you have pets make sure you confirm with the condominium management if pets are allowed.
*Prohibitions on noise which may interfere in the rights or comfort of other tenants
*Rules on guests, e.g. number of guests allowed and visiting hours
*Some condos impose limitations on any installations that can be seen from the outside of the building, e.g. curtains should match the overall color schemeof the building , no hanging of clothes in the balcony area, use of aluminium foil, newspapers or other makeshift materials to cover windows, etc.
Subdivision rules deal mainly with restrictions on the entry and exit of vehicles, visitors, house help and construction crew.
Work with a Reliable Licensed Real Estate Broker
A licensed real estate broker is knowledgeable about property and property ownership and can assist you in the property investment process, giving consideration to your budget, taste and lifestyle preferences. A licensed broker can give you guidance and educate you on the different laws governing property ownership and taxation in the Philippines. And since a licensed broker has access to property developers and sellers, he/she can offer you several choices to help you make that important investment decision.
Caveat: Be sure to deal only with licensed real estate professionals to ensure that you are getting proper guidance. Licensed real estate professionals are accredited with the Professional Regulation Commission (PRC). Dealing with unlicensed agents may do more harm than good and may even cost your hard-earned money to go down the drain.
Happy home buying everyone!
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