Below is the standard for such a transaction. Please be aware of it when negotiating and do not allow them to tell you that otherwise is "mandatory:"
Notary Fee 1% - 2% buyer pays
Local Transfer Tax 0.75%buyer pays
Registration Fee 1% buyer pays
Capital Gains Tax 6.00% seller pays
Real Estate Agent´s Fee 3.00% - 5.00% seller pays
Document Stamp Tax 1.50 % seller pays
Costs paid by buyer 2.75% - 3.75%
Costs paid by seller 10.50% - 12.50%
Typical steps to buying real estate in the country:
- Owner and Buyer agree on sale of a piece of land. Through a lawyer, a Deed of Absolute Sale (DOAS) is created and notarized.
- A Land Tax Declaration is secured from the Bureau of Internal Revenue (BIR) and submitted to the city or municipal Assessor’s office.
- Buyer pays real estate tax to the City Treasurer’s Office.
- The Assessors office assesses the market value of the property.
- Transfer taxes are paid by the buyer to the Assessors Office.
- Capital Gains Tax and Documentary Stamp tax are paid to BIR.
- The Registry of Deeds (RD) cancels old title and issues a new one in the name of the buyer.
- The buyer, now the new owner, obtains a photocopy of the new title and requests tax declaration from the Assessors office.
Also, know that foreigners are restricted from purchasing land in The Philippines. However, there are workaround ways to do so anyhow - see HERE.
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