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The Complete Guide to Investing In Philippines Property

The Complete Guide to Investing In Philippines Property


Perhaps you always considered real estate as the best domain to invest money, as a way to secure your future.

We all know that safekeeping our money will not guarantee a successful backup plan in case of financial instability, as investing them is the best way to multiply them.

But now that you have sufficient capital to make an investment in the property market, you’re probably looking for ways to make this happen in a smart and precautious matter.

After all, you’re making such a step so that you’ll gain some benefits in the future.

Well, you came to the right place because this guide will help you find relevant information about the real estate in the Philippines, so that your decisions will always be the best ones.

This step-by-step guide will introduce you to this domain and give you the power of knowledge for making informed decisions.



The economy in the Philippines is enjoying an exceptional growth in recent years, making this period more than suitable for real estate investments.


As a foreigner, you need to know that the laws in the Philippines will not allow you to own land in the county. So how will you be able to invest, you may wonder.


The answer lies in buying a condo for sale I Philippines.


Yes, buying a condominium is allowed in case of expat investors, so don’t miss the chance of making a great investment in a country that is developing slowly, but surely.


In case you need more reasons to make such an investment, here they are:

  • Brands known all over the world can also be found in the Philippines

If we are to compare the Philippines with other countries in Asia, it has a much wider offer of western brands that the rest, which makes this country highly desirable in the eyes of foreigners.


Nike, Old Navy, Adidas, and many more, have shops available here.


Not to mention that most people in the Philippines know how to speak English pretty well, so there won’t be any communication problems.


  • The culture here is amazing

Unlike other countries that are not too fond about welcoming foreigners, the culture in the Philippines is rather open, making outsiders feel welcome.


It is easier to adapt in this country as well, due to an interesting society composed out of east and west cultural elements alike.

  • You will definitely have what to gain

Many western investors are looking to take advantage of the decent yields provided by rentals in the Philippines, which are usually around 7%.


For example, purchasing a condo for sale in Manila will provide properties that are easy to rent and offer a good return on investment.


Having in mind that western currencies, like the euro and dollar, are going down, many investors directed their attention to the property markets in the east, considered safer at this point.

  • Living here costs less

The best part about the Philippines is that the costs of living in the country are rather low.


If you choose to invest in a Philippines property, then it won’t be hard living here as the income you’ll make from renting it will cover a good part of your expenses.


You need to have in mind that, in big cities, small apartments can be rented for sums between PHP 15,000 and PHP 25,000, while large apartments can generate rents between PHP 40,000 and PHP 80,000.


Also, believe it or not, it will cost even less to live in the country if you decide to find a house for sale in the Philippines and purchase it.


This is ideal if you plan on spending time in the Philippines for longer periods, as it will save you from paying rent month by month.

In case you have sufficient money to invest in a condominium and rent out several apartments, then you will secure a comfortable life in the Philippines for years to come.

  • Many foreigners are attracted here by the pleasant weather and gorgeous scenery

When investing in a Philippines property, not only locals will be interested in it, but also a lot of expats.


The truth is that everybody wishes to enjoy their own corner in this country, drawn in by the warm climate and beautiful landscapes.


Also, luxury here is still highly affordable, in comparison with other countries, so you can be sure that if one decides to live here, he or she will enjoy the best conditions.


Great schools and hospitals, large malls, exceptional restaurant, and gorgeous beaches, all act like magnets that invite people in.


foreigner buy properties in Philippines

Yes, a foreigner can buy properties in this country, although there are a few rules that have to be respected in this case.


According to the Condominium Act, any expat can buy a condominium as long as he doesn’t own more than 40% of the entire building.


Also, do have in mind that a house that is a division of a townhouse community, falls under the incidence of the same act.


As a foreigner, you can choose to work with a property developer or real estate agency, depending on your personal preferences.


Any of these two will help you with the necessary steps to purchasing or reselling a property.


While buying a condominium is not a complicated process, actually owning a piece of land in the Philippines can become complicated.


According to the laws of the country, only Philippino citizens have the right to buy and own land in the country.


Exceptions are made in case the acquisition was made before the Constitution created in 1935, so owning such a property as a foreigner is legal.


Also, if an expat is married to a Philippino, he or she can purchase land through the spouse, so all documents will be made in the name of the spouse and the payment for the property must be made through the spouse’s accounts.


Another way to do this is to hold shares in a Philippino company that ends up purchasing land.


Again, there are a few rules in this case, as the company must have at least 5 shareholders and that the Philippino shareholders have 60% of the company.


Or you can obtain a long-term lease for a piece of land in the Philippines, both as a foreigner and foreigner company.


For start, the government will give you a 50-year lease for the land you want to own. Once this term expires, you can prolong the lease for an additional 25 years only.


In this case, Philippino investors have the chance to enjoy leases for unlimited periods.


property taxes in the Philippines
  • One of the reasons that it is such a good idea to invest in the property market of the Philippines is that the local economy is expected to grow at a better rate than the country’s neighbors.

    So, at the moment many investors take this option into consideration.

    If there is one inconvenience to property investments in this country, then there must be the rather high property taxes in the case of property owners that not residents of the Philippines.

    When it comes to property taxes in the Philippines, they are dictated by the property value and location.

    Thus, for properties located within the city of Manila, the property tax will be 1%, while properties located outside the city will have a 2% property tax.

    To be more precise, the property tax is a percentage calculated according to the value of the property.

    So, if the value of a property if PHP 25,000, then 1% of this sum will represent the property tax.

    Also, it is worth mentioning that income generated by renting residential units will also lead to the necessity to pay an income tax in the Philippines.

    And, in case you earn more than PHP 500,000, then the tax rate you will pay will be up to 32%.

    As a resident of the Philippines, you can benefit from income tax deductions, which can be taken from other taxes that you’ve paid, repairs, maintenance, and so on.

    These deductions can significantly lower the taxes you have to pay.

    For non-residents, no deductions are applied and a flat rate of 25% is applied to every kind of income.

    Also, when you’re transferring a property, there will be a 6% tax for this procedure, which is usually split evenly between the seller and the buyer.


Invest In The Philippines

So, you’re interested in Philippines property, but you’re not sure if this is such a good idea? Well, then take a look at the following reasons.


  • The demand for new properties is increasing

Together with the local economy, the population of the country is also growing, which means that the demand for residential spaces is forecasted to grow as well.


Some say that the number of residents in the Philippines is increasing way to fast, which may soon lead to a shortage of spaces to live.


The biggest increases will be noticeable in the capital city, of course, where the prices for a residence range between PHP 148,000 and 158,000 for every square meter.


Plus, the heavy traffic triggered by daily commuters that come in the city for their jobs is a clear indicator that there are very many people willing to pay rent for a more comfortable life.


  • Property prices in Manila may have increased, but others still remain highly competitive


It is true that looking at a condo for sale in Manila can ruin your investment plans, especially if you are checking out luxurious units.


But, this doesn’t mean that there aren’t other places with much more accessible prices.

Have in mind that the Philippines is composed out of more than 7,000 islands where you can easily invest.


Just check out Cagayan de Oro for example, a city with a property market well under the current demand, where the first condominium sold its units like freshly baked goodies.


  • The value of land will only get higher


If you want to take advantage of this aspect you need to start investing today.


Purchase properties in the Philippines while the prices of land are still acceptable because predictions show that they will continue to rise. And this means a much better profit in the future.


  • You can still enjoy competitive interest rates


The interest rates when it comes to loans granted for purchasing residential units are still not affected by the predictions concerning the rise of prices in the real estate market.


In other words, you can still get great interest rates for loans in the Philippines.

So, at the moment, the interest range anywhere between 5.3 and 7.8%. But, if you’re looking for a mortgage, then you will have interest rates between 7 and 10%, which are fixed and span over a period of 5 years.


  • The vacancy rates go down, while rental rates go up


It is more than obvious that there are more and more people in need of a home.


This demand leads to lower and lower vacancy rates in residential units, while the value of rent goes up.


So, if you choose to invest in Philippines property market today, you will enjoy rent rates that will steadily increase over the coming years, together with the demand in this sector.


businessman with mini house and US dollars

At the moment, property prices in the Philippines are still accessible, and so are interest rates in case you want to get a loan for buying a property.


Also, the forecasts telling that both the local economy and population will grow are great indicators that making such an investment will trigger a long-term income and great profit.


There’s really no point in waiting any longer because the prices in the real estate sector are expected to rise.


Prices in Manila are already quite high and soon other cities will follow, pushed by the increasing demand for residential spaces.


While it is quite difficult for an expat to buy land in the Philippines, the best solution is purchasing a condominium and selling or renting its


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