An OFW’s Guide To Buying A Home in the Philippines

One of the most common investments OFWs make includes real estate properties. Investing in a property is not always as easy as one might wish, especially if you are not physically present. To help you get started, continue reading this complete OFW’s guide to buying a home in the Philippines.

Given all the years you have spent working far from your loved ones as an OFW, you truly deserve to own a house from the top subdivision developers in the Philippines. The good news is, you will find buying your dream home in the Philippines easier if you know the requirements needed to complete and the other factors to consider. Continue reading on to learn about these. 

OFW Requirements For Property Purchase

Given that you are out of the country, you must appoint a representative to purchase the property. The representative will sign the forms and contracts and pay the necessary reservation fees on your behalf. The real estate agent will send you a Special Power of Attorney (SPA) document that must be signed and consularized by the Philippine embassy of the country where you reside as an OFW.

Keep in mind that the cost of the consularization will depend on the country you are working from. The legal document you receive should have a real and a red ribbon. Once you have secured the SPA, here are the OFW requirements to be submitted within the next 30 days:

• Consularized SPA
• Proof of Income – must include 3 months of pay
• Certificate of Employment and Compensation
• TIN Number in the Philippines
• Proof of Billing in the Philippines
• Employment Contract – must be in English and have a seal of the employer and/or signature of authorized personnel (HR)
• Scanned Copies of Your Passport Entries – must include up to the last entry
• Post Dated Checks – needed for the down payment

OFW Financing Plans

Like other investment options, buying a home in the Philippines can cause hefty money. This is why the following financing plans or housing loans from government institutions and banks are available for OFWs:

• Pag-Ibig Overseas Program
• BPI Housing Loan
• SSS Direct Housing Loan
• BDO Kabayan Loan
• HSBC Home Loan

Real Estate Transaction Costs in the Philippines

If you’re an OFW trying to buy a home in the Philippines, you have to consider all the fees included in the purchase. Here are the following real estate transaction costs when buying a house in the Philippines as an OFW:

• Notary Fee – This is the expense incurred from getting documents notarized. In general, the notary fee costs 1% to 2% of the property’s value. However, this amount can be negotiated upon by the buyer and seller.
• Capital Gains Tax – This is a type of tax paid on the profit made from capital invested. According to the  Bureau of Internal Revenue (BRI), the capital gains tax amounts to 6% of whichever is higher among the property’s sale price, zonal value, or fair market value.
• Transfer Tax – This is a type of tax paid when the title of a property is passed from the seller to the buyer. The transfer tax can range either be 0.50% (provincial rate) or 0.75% (Metro Manila rate) of whichever is higher among the property’s sale price or zonal value.
• Documentary Stamps Tax – This is the expense incurred on all the documents that evidence the sale of the property. It costs 1.5% of whichever is higher among the property’s sale price or zonal value.
• Real Property Tax – This is a type of tax paid every month based on the property’s value, including the land. It is used to fund the local government unit’s public services such as water maintenance, law enforcement services, and other services that are associated with your property. The amount for real property tax is calculated based on the assessed property value.
• Maintenance Fees – Even if you are an OFW and you are far from your property, you would still need to pay maintenance fees. These fees can come in the form of association dues.

OFW Tips For Buying A Home in the Philippines

Buying a home in the Philippines is no easy task. There are several considerations to take to ensure the property you choose fits your needs as well as your loved one’s needs. Here are a few tips to help you make a more thoughtful purchasing decision:

Conduct Extensive Research

It should go without saying that OFWs must research if they want to buy a quality home. Given that you are away from the Philippines, it is much harder to assess properties. You must research the property’s community, amenities, and accessibility to essential establishments like schools or hospitals. Make sure to get information from reliable sources. A good way to do this is to proceed to the property developer’s website. As the website will have complete details about the property listing, you will be able to evaluate if the property is worth your investment.    

Find A Reliable Real Estate Developer

As an OFW, you will not be able to check the property listings on your own. This means you won’t be able to assess if the home is not suitable for you. To avoid any future problems, make sure you find a reliable real estate developer with a good reputation for building quality homes.

Key Takeaway

In this OFW’s guide to buying a home in the Philippines, we delved deeper into the requirements for property purchase, financing plans, real estate transaction costs, and tips for buying a home. You deserve to reap the fruits of your labor because of all your hard work as an OFW.

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