Philippines Real Estate Regulations and Laws: What Buyers and Sellers Need to Know
Introduction
The real estate sector in the Philippines has been growing a lot. The government made rules and laws to protect people who buy and sell properties. If you want to buy or sell a property in the Philippines, you need to know these rules and laws. This article will tell you the important rules and laws that buyers and sellers should know in the Philippines.
Property Ownership Laws
In the Philippines, there are rules about who can own properties. Only Filipino citizens and Filipino-owned companies can own land, according to the 1987 Constitution. But foreigners can own condominium units or buildings, as long as they don’t own more than 40% of the total units.
Real Estate Brokerage Regulations
Real estate brokers or agents help people buy and sell properties. To make sure buyers and sellers are protected, the government has rules for real estate brokerage. The main law is called the Real Estate Service Act (RESA) of 2009. This law says that brokers and salespersons need to be licensed by the Professional Regulation Commission (PRC) and follow the rules for their job.
Property Taxes and Fees
When you buy or sell a property, there are taxes and fees you need to pay. The Bureau of Internal Revenue (BIR) collects these taxes. There are different taxes like capital gains tax, documentary stamp tax, and transfer tax. Usually, the buyer pays these taxes, but the people involved can talk and decide to split the costs. The seller may also have to pay a commission fee to the real estate broker, which is a percentage of the selling price.
Contractual Obligations and Disclosures
To protect buyers and sellers, there are things they need to do when they make a deal. Sellers need to tell the truth about the property they are selling. Buyers should check the property and get important papers like the land title or tax declarations. They also need to write an agreement called a Deed of Sale to avoid any problems later on.
Financing and Mortgage Regulations
Some buyers need to get a loan to buy a property. There are rules that banks and other financial institutions have to follow when they give out loans. The main rule-maker is the Bangko Sentral ng Pilipinas (BSP), which is the country’s central bank. Buyers should look at different loan options, interest rates, and terms from different banks. They also need to have a stable income and good credit history to get a loan.
Frequently Asked Questions (FAQs)
Q1: Can foreigners own land in the Philippines?
A1: No, only Filipino citizens and Filipino-owned companies can own land in the Philippines. But foreigners can own condominium units or buildings with certain limits.
Q2: Are real estate brokers required to be licensed?
A2: Yes, real estate brokers and salespersons need to have a license from the Professional Regulation Commission (PRC) to do their job in the Philippines.
Q3: Who is responsible for paying the taxes and fees in a real estate transaction?
A3: Usually, the buyer pays the taxes and fees for buying a property like the capital gains tax, documentary stamp tax, and transfer tax. But the people involved can talk and agree on how to share the costs.
Q4: What documents should buyers get before finalizing a real estate purchase?
A4: Buyers should get important papers like the land title, tax declarations, tax receipts, and clearances for the property. It’s also a good idea to check the property and have a lawyer look at the papers.
Q5: How can buyers get a loan to buy a property?
A5: Buyers should go to banks or financial institutions regulated by the Bangko Sentral ng Pilipinas (BSP) to learn about loan options. They also need to have a stable income and a good credit history to get a loan.
References
1. Constitution of the Republic of the Philippines – [Link](https://www.officialgazette.gov.ph/constitutions/the-1987-constitution-of-the-republic-of-the-philippines/)
2. The Civil Code of the Philippines – [Link](https://www.chanrobles.com/civilcodeofthephilippinesfulltext.html)
3. The Property Registration Decree – [Link](https://www.lawphil.net/statutes/presdecs/pd1972/pd_1529_1972.html)
4. Republic Act No. 9646 – The Real Estate Service Act of 2009 – [Link](https://www.officialgazette.gov.ph/2009/06/29/republic-act-no-9646/)
5. Bureau of Internal Revenue (BIR) – [Link](https://www.bir.gov.ph/)
6. Bangko Sentral ng Pilipinas (BSP) – [Link](https://www.bsp.gov.ph/)
