How to Handle Squatters, Informal Settlers in Your Property

Even as the Philippines marches on towards development, many Filipinos remain poor. In 2016, a survey conducted by the Social Weather Stations revealed that 10.5 million Filipinos identify themselves as poor.

With general lack of livelihood opportunities, inflation, high unemployment and underemployment rate and low wages for those who find work, a persistent problem among low-income families is lack of housing options.

So it is not unusual to find families living in makeshift shanties built with whatever material is available on hand. Though this illustrates the typical resourcefulness Filipinos are characterized for, building houses on government or private lands gets them in trouble sooner or later, while earning the formal term “informal settlers” or the derogatory “squatters”.

As a means to mitigate the problem of squatting in many urban communities, President Ferdinand Marcos in 1975 signed the Presidential Decree No. 772, otherwise known as Penalizing Squatting and Other Similar Acts. Under the Decree, people found to be occupying or possessing the property of a legitimate owner against the latter’s will were either imprisoned or fined depending on degree of violation.

However, PD 772 was eventually repealed by Republic Act 8368, also known as Anti-Squatting Law Repeal Act of 1997. R.A. 8368 not only ordered that informal settlers cannot be imprisoned, but also dismissed pending cases based on P.D. 772. The Act may have become sympathetic to poor families but many informal settlers have abused this provision, making it harder for rightful property owners to assert their ownership. The proper handling of such situation has been an issue among squatters, landowners, and law enforcers for a long time since both parties involved have rights that should be respected.

“With abusive squatters taking advantage of a tedious and expensive court action, it is sometimes better for property owners to take advantage of the principle of self-defense for new or ongoing intrusions,” according to Philippine Association of Real Estate Boards National Chairman Atty. Rey Cartojano.

According to Cartojano, the principle of self-defense takes place when a property owner uses reasonable force to physically resist intruder, or forcibly evicts them using reasonable amount of effort. However, he warns that this principle “must be used with calculation and much restraint with the advisable participation of barangay officials and police officers.”

Another option for property owners, who don’t want to invoke their right of self-defense which can easily turn violent, is to seek help from the barangay for amicable settlement or hire a lawyer to settle the conflict.

“The legal remedy for property owners for squatters and informal settlers are detailed under Republic Act No. 7279, otherwise known as the Urban and Development Housing Act,” Atty Cartojano said. He suggested the following steps for a property owner involved in a situation with an informal settler squatting his property.

  1. Establish the identify of involved informal settlers. Notify and seek help from barangay officials who are expected to mediate and initiate contact with the other party.
  2. Document instances of intrusion incidents in writing or video. Report incident to a police station that has jurisdiction over the property and record a police blotter relating to the incident.
  3. Seek the help of the barangay to arrange a possible settlement if a peaceful negotiation does not produce good progress.
  4. If barangay intervention proves to be unsuccessful, the property owner must then hire a lawyer who will handle the matter of evicting the squatters. The lawyer will be handling tasks such as serving the demand letters and filing the necessary court cases.

How long does the process take?

Once the designated lawyer issues demand for the informal settler to vacate the property the clock starts ticking in the legal remedy to settle the issue of occupying property against the owner’s will. Once the informal settler does not heed the demand, the case will have to be filed in court. Cartojano explained that depending on the caseload of the court, skills of the handling lawyers and the disposing ability of the handling judge, the entire process may take years to be completed.


Additional Costs You Are Expected to Pay When Buying Condo Properties

Just when you think that condo advertisement is where you need to invest your hard-earned dollars abroad or bounty from the disposal of another property, think again. In the guise of investment, and low upfront payment, plus your genuine desire to own a piece of that dream home in a desirable address, you could easily commit to a tantalizing offer.

Before making a commitment to acquire on be sure that your computations do not only include the price tag as mentioned in the advertisement and potential earnings, but also other related costs that are normally hidden behind unit price and attractive offers that appear on flyers handed by property agents.

One thing is for sure: buying a condo unit doesn’t come cheap.

Even if purchase by cash isn’t required — but gets perks such as steep discount and preferential treatment – a fraction of cost as down payment may still require mortgage loans to cover cash deficiency on hand.

It’s not unusual for buyers to take the route of availing of housing loans from banks or government pension funds to get that dream fulfilled. Yet the decision often leaves the buyer with higher cash liability as he or she gets to pay more interest for the condo in an installment scheme, but also pay interest for the bank loan. And we’re not yet even in the topic of other extra expenses associated with buying condos!

So what are the other costs expected to pay when I buy a condo unit?

Apparently it sounds scary but if you can’t conquer your fear, you’ll never be able to own your dream home. What’s important is to be aware of what to expect, and make calculate decisions before making a commitment.

So get to know how much are you willing to spend for a condo unit without getting cash-strapped for years or decades. How much do I earn a month or do I have other income streams? How much can I allocate to finance a new house from that income? If I need to take up home mortgage loans, how long can I (or my children) pay for it? What sacrifices do I need to make just to get that dream home — a symbol of success and source of pride to many Filipinos?

Many Filipinos who have dipped their toes into buying a condo unit out of persuasion from agents did not think long and deep enough. They don’t have enough cash or other income streams, even if the condo unit itself can become an income generator through lease income, Airbnb accommodation or appreciate its initial value as location becomes more attractive.

Behind in their amortization payments, they have given up ownership as their long desired home got swallowed into foreclosure.

So even if the agent says the you only need to pay P6,000 every month, don’t fall for such promises — there will always be expenses you can’t avoid from paying.

According to Arlyn Santos, national treasurer of Real Estate Brokers Association of the Philippines, such fees are not really hidden as they come directly next in the agenda soon as a buyer commits to buying a condo unit.

Let’s take a look at what you might expect to pay once you agree to purchase your dream home.

  • Documentary Stamp – 1.5% of selling price of property
  • Transfer and Registration Tax – 1.5% of selling price of property
  • Association fees – varies depending on cost of repair, maintenance and upkeep of common areas (elevators, security cameras, etc)
  • Broker’s fee – 2 to 3% of gross price of the property
  • Parking fees – varies and usually comes with a slot that needs to be bought separately
  • Utility charges – varies (cleaning and collection of trash, power and water on common areas)
  • Insurance premium for unit – varies depending on value of property, location, and other factors)
  • Real property tax – varies, depending on the value of property as evaluated by an authorized assessor, paid yearly

That’s quite the minimum you’ll pay on top of the monthly amortization obligations. Should you decide to sell it a capital gains tax worth a whooping 6 per cent of the selling price on Deed of Sale or zonal value, plus the broker’s commission. So there’s little relief of getting your hands off that property.

And even when you die, your grieving family will still need to pay estate tax imposed when transferring ownership of your real property so entering into the transaction of acquiring a condo unit is littered with fees that are legally collected from you the owner.

The purpose of this article is not fearmongering but a reminder to all those who wish to avail of properties such as condos, house and lot and other real property to look beyond the price and amenities. Consult with a competent, licensed real estate broker while making computations before deciding on any property transaction.


Property Investment in the Philippines: A Guide for Foreigners and Expats

The Philippines is in a midst of a property boom, yet compared to more mature markets where real estate prices are beyond reach to many, it’s still priced reasonably. Adding allure to the attraction is that the Philippines is home to among the friendliest people in the planet and a choice destination for retirees.

Even if the country is mired in bureaucratic red tape in many transactions — unnecessary steps and procedures litter around — acquiring property in the Philippines is fairly straightforward for foreigners.

Limit of Ownership
Under RA 4726 or the Condominium Act, foreigners can buy units as long as interest in the entire property does not exceed 40%.

Assistance by Registered Real Estate Brokers
Foreigners can own property in the Philippines, only that they have to meet certain eligibility requirements, which is not different from what other investment-friendly countries impose. So it helps to transact with legitimate and licensed real estate agents when planning to acquire properties for investment such as condominium units.

Besides local knowledge on most sought-after properties and legal know-how, real estate agents help in securing required documents, filling out forms, assist in signing a notarized and binding deed of sale, payment of taxes and fees, and issuance of title deed at the registry office.

With a typical rate of between 3-5% for transactions, fees paid to an agent is a reasonable amount for the knowledge and effort he or she assists in completing a deal.

Land Ownership
Although foreigners can own up to 40% of condominium units, they cannot own tracts of land, say the land where a house they plan to erect on. There are a few exemptions such as if their family ancestors acquired the land before the establishment of the 1935 Constitution, and passed on to them as heirs or; marriage to a Filipino citizen, although paperworks will show name of spouse.

In most cases land use for foreign-owned corporations are leased for long-term contracts, typically 50 years and renewable every 25 years. If a foreigner becomes a shareholder of a Filipino company that buys the land, keeping in mind that ownership is at least 60% Filipino, land acquisition becomes possible under the law.

Former Filipino Citizens and Balikbayans
Former Filipino citizens who have renounced their citizenship are considered foreigners and can no longer own similar ownership rights as domestic Filipinos. However, with many countries supporting dual citizenships, such right to property ownership in the Philippines becomes possible although the process may be more time-consuming.


How To Settle Estate of a Deceased Property Owner

When a property in the Philippines changes ownership, a transaction is invalid if the name on the title belongs to a dead owner. A transaction can only be consummated once the estate of the deceased has been settled.

Settlement of the estate does not only refer to change in ownership, it also means payment of any outstanding capital gains and estate taxes at the Bureau of Internal Revenue. In some cases, to avoid hassles and payment of arrears, sellers push through with the sale even if they are aware the owner has passed away already. But such short-term savings and convenience could hit a snag sooner or later so it’s always a good practice to do what is proper and ethical.

Extrajudicial settlement of estate can only be executed if the following conditions are satisfied:
1. The decedent left no will
2. The decedent has no debts or his debts have been fully paid.
3. The heirs are all of legal age or the minors are duly represented by their judicial or legal representatives.
4. A public instrument is duly executed by the heirs and filed with the Register of Deeds.

Otherwise, judicial proceedings is the likely route.

Here are the steps in accomplishing such procedure:

Step 1:
Fill out BIR Form 1904. This form is to be accomplished by one-time taxpayer and persons registering and applying for a TIN but in this case the estate of the deceased owner will have a separate TIN from heirs who intend to sell the property.


On the form:

  • On the Taxpayer Type, mark with an “X” the box indicating “One-Time Taxpayer”
  • On Classification, mark with an “X” the box indicating “Non-individual”
  • On Sex, mark with an “X” the appropriate box indicating gender of the deceased.
  • Write “ESTATE OF [deceased person’s name]” in the space provided for the Taxpayer’s Name.
  • On the Civil Status, mark with an “X” the appropriate box indicating civil status of the deceased.
  • On the Date of Birth, write the date of death of the decedent as it appears in the Certificate of Death.
  • Write the Local Address of the decedent in the space provided for. This should match the information indicated in the death certificate. If the deceased died abroad and has no Philippine residence, fill out the Foreign Address indicated in the death certificate and filing of the Estate Tax
  • Return should be made at the BIR Revenue District Office (RDO) No. 39 (South Quezon City) or the Philippine Embassy or Consulate where the deceased has died.
  • Mark an “X” on the box indicating Transfer of Properties by Succession (Death).
  • On Tax Types mark an “X” the box indicating Estate Tax.

Indicate the name of the Taxpayer/Authorized Agent and sign the same. Attach a photocopy of the certified copy of the Certificate of Death to Form 1904.

Step 2:
Prepare required documents. The following documents are required for submission to the BIR:

1. Notice of Death
2. Certified true copy of the Death Certificate
3. Deed of Extra-Judicial Settlement of the Estate
4. Certified true copy of the land titles involved
5. Certified true copy of the latest Tax Declaration of real properties at the time of death
6. Photo copy of Certificate of Registration of vehicles and other proofs showing their correct value
7. Photo copy of certificate of stocks
8. Proof of valuation of shares of stocks at the time of death
a. For listed stocks – newspaper clippings or certification from the Stock Exchange
b. For unlisted stocks – latest audited Financial Statement of issuing corporation with computation of book value per share
9. Proof of valuation of other types of personal property
10. CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos
11. Certification of Barangay Captain for claimed Family Home

Please check with BIR for updated checklist if the above is outdated.

Step 3:
Prepare Estate Tax Return (BIR Form 1801).
Fill up the name and the TIN of the Estate on the spaces provided in Form 1801.

Seek assistance of an officer of the day if you have questions in filling out the form, as well as the computation made on the review of documents submitted. However, if the estate of the deceased is more than P3 million then it would be wise to consult a certified public account to determine the initial computation of the taxable estate.

Step 4:
Pay the assessed estate tax as computed.
You may settle the estate tax with an Authorized Agent Bank of the Revenue District Office which has jurisdiction over the place of residence of the decedent at the time of his/her death. For smaller amount, it is often settled by cash. However, for larger amount and security is an issue, payment can also be made out to Manager’s or Cashier’s Check.

Should the payment be made at an Authorized Agent Bank, such as Landbank of the Philippines, the payee can be referred to as “Bureau o Internal Revenue.”
If payment is made through a Manager’s or Cashier’s Check, the following should be written as payee: “[BANK, BRANCH] FAO BUREAU OF INTERNAL REVENUE IFO [TAXPAYER’S NAME] [TIN OF TAXPAYER].”

Step 5:
Submit all requiremd documents and proof of payment to the Revenue District Office which has jurisdiction over the place of residence of the decedent. You will then be issued a claim stub with reference number you can refer to when you check if Certificate Authorizing Registration has already been issued.

Based on the evaluation of BIR, heirs may be asked to provide additional documents, especially pertaining to the deductions claimed by the estate. Processing takes at least 60 days.

Step 6:
Once the Certificate Authorizing Registration is released, the property can now be sold to a buyer. The Certificate Authorizing Registration, along with the transferring document – Extra-judicial Settlement of Estate, Affidavit of Self-Adjudication, etc. – and the Tax Clearance Certificate should be part of the documents to be presented when paying the capital gains and documentary stamp taxes covering the sale of the property.


Common Real Estate Scams in the Philippines and How to Avoid Becoming a Victim

Just like there’s illegal recruitment in jobs, misleading advertisements on television and deceptive multilevel marketing schemes employed by unscrupulous individuals, real estate is not exempt of fraudulent schemes.

Scammers, swindlers, con artists, they come in various titles, but they all perform the same thing — prey on people who lack knowledge in order to gain something.

While it’s easy to say if an offer is too good to be true, then walk away, it’s often too tempting to take it. So it pays to be armed with knowledge to parry these scams.

1. Paying reservation fees for unfinished properties.
Victims are urged to pay a reservation for properties yet to be built or currently under construction. This is under the premise that once you pay the fee, you’ll be allocated a unit and reserved a key to its doors. The selling point is that reservation fees are often much cheaper than actual mortgage amortization so it’s easier to come up with the amount under the assumption that you’re reserved a unit.

This creates a false sense of security as long as the supposed property remains unfinished.

In some cases, promises are broken as developer fails to finish the project on time, or worse, abandons it without signing off as finished project.

A natural route is to raise a complaint with the HLURB which can take many years to resolve, should this approach be the first option. As a result, there is no guarantee money can be recovered.

Employees work at a construction site in Manila on November 28, 2012. The Philippines said on November 28 that the economy expanded a better-than-expected 7.1 percent year on year in the three-months to September on the back of a robust services sector.  AFP PHOTO / NOEL CELIS        (Photo credit should read NOEL CELIS/AFP/Getty Images)

Employees work at a construction site in Manila on November 28, 2012. The Philippines said on November 28 that the economy expanded a better-than-expected 7.1 percent year on year in the three-months to September on the back of a robust services sector. AFP PHOTO / NOEL CELIS (Photo credit should read NOEL CELIS/AFP/Getty Images)

2. Property is sold to more than one buyer.
A buyer fails to act and do not immediately transfer the title from the seller’s to his/her name could become a victim of this trick if the seller finds another buyer who makes another offer. The second (or any subsequent) buyer becomes entangled in the mess and could be another party in contention especially if the seller refuses to return the money of a duplicate purchase.

In such case, the court will settle the dispute and could mean costly litigation to the buyer.

3. Sale of real property using a fake title.
Buyers fail to check the authenticity of a property title. Due diligence should be made at the beginning of the price negotiation and this means checking of relevant documents not just whether they exist but also if they are genuine.

Related: How to spot a fake property title

A thorough check for records at the Registry of Deeds helps validate a claim of the seller. Should you notice something suspicious, money should not change hands unless it is settled, and no amount of seller coercion should prompt you to proceed with the transaction.

4. Sale of property to be forclosed at steep discount.
Filipinos working abroad are often bombarded with affordable offers of properties for investment at deep discounts. However, even those who are in the Philippines and can verify documents and check out the property can also fall victim to this scheme.

A property in question is made to appear as for sale, but is actually under forclosure proceeding which means the supposed owner will soon lose the right to the property. Yet, in an effort to cash-in on the property, the owner or a representative presents documents that appear valid. A further check later reveals the true state of the property. The buyer parted with his ir her money but did not get something valuable in return.

5. Real estate investment seminars run by unethical parties.
By organizing an event related to real estate subject, some unscrupulous individuals or groups can easily attract interested parties to attend such seminars and become captive audience to the sweet talks and false promises. Gifted with the talent of persuasion and using slick language, they sell themselves as experts in property investment backed up by good marketing and flashy presentation.

They often promise quick returns of investment and dropping names of notable brands in the industry. And just like multilevel marketing, many buyers are drawn into their offers. But soon as commitments to invest pile in and money changing hands, these so-called experts start to disappear without a trace.

How to Avoid Becoming Scam Victims?

1. Perform a due diligence
This means you have to do legal due diligence. This includes inspecting the property personally and checking the accompanying documentation thoroughly. It is also a good idea to hire a seasoned lawyer to do the job for you, even if it means adding extra expense just to ensure that all documents, title and property are all in proper order and fraud-free.

2. Seek help from licensed real estate broker.
While we described a number of scam tactics above, we believe many other real estate professionals work with honesty and integrity. It pays to transact any property purchase or lease through them. In case no one can refer you to a license real estate broker, the Professional Regulation Commission has an online listing of all licensed real estate service professionals in the Philippines which can help facilitate your selection process.


How to Apply for Building Permit in the Philippines

A building permit is a permit to be applied by the owner or administrator of a building to comply with the regulations set by the National Building Code. This is has to be secured before construction will commence.

This permit usually comes with ancilliary permits such as
• The architectural permit
• Civil/structural permit
• Electrical permit
• Mechanical permit
• Sanitary permit
• Plumbing permit
• Electronics permit
• Fire Safety Clearance, Barangay Clearance, bill of materials, ECC, PTR & PRC of professionals

Before the applicant can secure this permit, he or she has to ensure that other requirements related to the construction of the building has to be inspected and approved, with authorized signatory visible in certain documents.

For example, an engineer should ensure that the electrical layout is safe, the applicant should show proof he or she is the owner of the property or that he or she has legal documents proving the building is constructed or renovated on a tract of land being leased to him or her.

Documentary Requirements:

1. Ownership of the lot property
a. In case the applicant is the owner of the lot where construction will take place:
a1. Certified true copy of Transfer Certificate of Title, on file with the Registry of Deeds.
a2. Tax Declaration
a3. Latest Real Property Tax Receipt

b. In case the applicant is not the registered owner of the lot:
b1. Duly notarized copy of the Contract of Lease or Deed of Absolute Sale

2. Application forms
a. Application for Building Permit (5 copies)
b. Electrical Permit Forms (3 copies)
c. Sanitary Permit Forms (3 copies)

3. Five sets of complete detailed plan

a. For construction of two-storey building:

  • Structural Design Analysis – signed and sealed by Civil Engineer at every page

b. For construction of more than two-storey building:

  • Boring and Plate Load Test
  • Seismic Analysis

Proof of Property

  • Photocopy of Transfer Certificate if Title (TCT)
  • Photocopy of tax Declaration of Property-lot (Certified True Copy) – 5 copies
  • Photocopy of Current Tax Receipt (5 copies)

Copy of License of Engineers and Architects

  • Photocopy of PTR # and PRC license of all involved engineers and architects

    Applicants will be issued a list of requirements to fulfill.

Procedure on Building Permit Application

1. Prepare the list of requirements while you secure a checklist and application forms from the Office of the Building Official.

2. Along with the filled out forms and required documents as outlined in the checklist, submit them to the Office of the Building Official.

3. If the submitted requirements are complete, you will be granted an acknowledgement/follow-up slip.

4. Within 10 working days, you will receive an order of payment from the Releasing Section of the building office. Settle the charge at the cashier’s office.

5. After five days, the building permit will be released after the submission of proof of payment (official receipt).


Fees depend on the value of property, area of construction/renovation and other factors.


How to Verify Authenticity of Property Title

Property value normally increases as time goes by considering developments and the location of this property and you could look into a couple of thousands to millions in your return of investment. With the increasing demand of property, it would be easy to buy a property that could be a scam or a fraud. To prevent these unfortunate misfortunes, here are places in which you can verify the authenticity of you property titles.

1. Registry of Deeds.
Registry of Deeds can be found in every city or municipality that you live in. It is the public repository of ‘Titles’ for titled and untitled real properties anywhere in your area. If you want to know the authenticity of the title of the property that you bought, it is important that you personally visit the Registry of Deeds of the location of you property to do the initial verification.

2. Municipality or City Assessor’s and Treasurer’s Offices
The Assessor’s office is where you can find the accurate technical description of the property, requisition for vicinity map of the subject property for your BIR clearance or DAR clearance.

The Treasurer’s office holds the record for real property tax payments, arrears and delinquencies.

These two offices can only issue clearances, certified copies and maps of the places that they hold jurisdiction to.

How to Transfer Real Estate Titles in the Philippines (From A Sa

3. Housing and Land Use Regulatory Board (HLURB)
If you are planning to buy a condominium or subdivision developments, the HLURB is where you can seek consultation and submit complaints. Any subdivision or condominium project can’t start selling, advertising or offering a project without any permits and approvals secured from the HLURB.

HLURB is responsible for the following matters concerning subdivision and condominium developments:

  • Registration and licenses of subdivision and condominium projects, farm lots, memorial parks an columbaria, including the issuance of licenses to sell by developers.
  • Observing and checking the progress and the quality of development and construction of registered or licensed projects.
  • Updating and revising rules, guidelines and standards on housing and real estate
    Evaluating and approving (or disapproving) Master Deed and Declaration of Restrictions of condominium projects and any amendment or revocation.
  • Registering and supervising Home Owner’s Association activities.
  • Requiring the mandatory registration of real estate brokers, dealers and salesmen engaged un selling developments under HLURB jurisdiction.
  • Serving as the adjudication body for the following: disputes between developers and buyers, intra (inter) homeowner’s association conflicts, appeals from decisions of local zoning bodies.

4. Land Registration Authority (LRA)
LRA is a government agency responsible for issuing decrees of registration, certificates of title and register documents, awards and patents. LRA is the repository of all titles in the Philippines and is a good place to go back and trace the property’s history.

5. Department of Environment and Natural Resources (DENR), Bases Conversion and Development Authority (BCDA), National Housing Authority (NHA)
These government agencies are responsible for issuing special grants or awards to qualified beneficiaries.
DENR approves (or disapproves the application of public land patents (e.g. homestead, free patent, sales patent)
BDCA transforms former military bases into a place where civilians can use.
NHA spearheads housing programs primarily for the lowest 30% of the urban population


If your title shows that it is an ‘Original Certificate’ then the appropriate place to verify the authenticity of this document is the Registry of Deeds and the LRA. Furthermore, if it says that it is acquired through free patent, then the grant ownership from DENR.

If the location of your property is a former military base, you can trace the origin of this title with the BCDA.


How to Choose the Right Housing Loan For You

With burgeoning costs of real estate investment and an unsupportive bank balance thinking about buying a house can be quite discouraging. But how long can you keep postponing? The prices are only going to hike and with flourishing expenses one can never save enough to buy a house without a bank loan. With some research, a common home buyer can make a quality investment by choosing the right housing loan.

Here are some tips that will help you choose right housing loan for you.

  1. Know your financial capacity: – To be able to obtain a housing loan, your financial standing is assessed based on three things:
  • Your income: – This is considered to help the lender determine whether you will be able to repay the loan or not.
  • Your credit history: – Managing your money is as important as having it. You credit history tells the lender your ability to judiciously manage your finances.
  • Your debt service ratio: – This ratio will determine the part of your monthly income that will go into amortization. For financial stability make sure that no more than 30 percent of your income goes into housing.
  1. Ascertain the amount you should borrow: – The bank doesn’t sanction you a loan based solely on your income. The estimated value of the property you intend to buy is also kept in mind. Banks may lend amount up to 80% of property’s selling price. You should borrow only the amount you will easily be able pay back.
  2. Study alternative financing options: – Determine which home financing scheme offers loan you can afford. To help you figure out your options here is a list of the loans available for Filipino home buyers:-
  • Bank loans: – For home buyers the first choice while looking for loan are commercial and universal banks. That is mainly because they provide larger loan tenor and least interest rates.

But banks are very strict in approving the loan and ask for many documents which include government ID, income tax return for employees, certificate of employment, and pay slips. Take assistance of a loan officer to help you choose a bank according to your needs.

  • In-House financing: – An uncomplicated and simple financing scheme, In-House financing only requires :-
    • Down payment
    • Verifiable proof of income

But being very simple, this financing scheme provides house loan at 14-18 percent which is higher than others and the loan tenor is also very short.

  • Social Security System (SSS) Home loan: – To opt for this scheme you must either be a member of Social Security System (SSS) or a Filipino worker whose age is not more than 60 years. The interest rate of an SSS home loan is 9-14 percent per annum and payment term is 5-30 years. If your loan exceeds 15 years then the interest rate is renewed every six months.
  • Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno) Fund: – It is officially named as Home Development Mutual Fund (HDMF). This program offers loan for long tenors of 20-30 years.
  • The facility is exclusive for members who have made at least 24 monthly contributions and with no existing loan with another bank or a Pag-IBIG housing loan that had been foreclosed.
  • The maximum amount that can be loaned is Php6 million and the interest rate is 8-11.5 percent.
  • Three qualified members within the second degree of affinity can apply for a single loan to finance the same property.

This funding option is quite flexible and affordable which is why it has helped minimum wage earners in buying their own house.


Understanding Philippine Capital Gains Tax

Capital Gains Tax is imposed on gain that the seller gets from a sale, exchange or other transfer of capital assets that are located in the Philippines. Pacto de retro sales and other forms of conditional sales are included in this.

  1. Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital Assets (Taxable and Exempted)


BIR Form 1706


The following documents are required

  • One photocopy of the Notarized Deed of Sale or Exchange along with the original
  • Certified true copy of tax declaration on the lot
  • Improvement during nearest time of sale
  • One confirmed copy of BIR ruling for tax exemption
  • Approved tax debit memo
  • If the transaction is tax-exempt then the “Sworn Declaration of Intent” as described under Revenue Regulations 13-99
  • Documents supporting the exemption
  • Photocopy of the following
      • Original Certificate of Title
      • Transfer Certificate of Title
      • Condominium Certificate of Title (for a condo unit)


Go to an Authorized Agent Bank (AAB) in the Revenue District where the property is located to file the Capital Gains Tax return in triplicate.

If there is no AAB in the area then you can file the return with the Revenue Collection Officer directly. You can also file it with Authorize City or Municipal Treasurer.

If you are a One-Time Transaction (ONETT) taxpayer then use eBIRForms for filing the tax returns.


The tax rate for real property is 6%



The deadline for filing the Final Capital Gains Tax is within 30 days after each sale, exchange, transfer or other disposition of real property.

  1. Capital Gains for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange


BIR Form 1707


  • One photocopy of Notarized Deed of Sale/ Exchange of shares of stock along with the original
  • Photocopy of Deed of Acquisition
  • Proof of Cost or fair market value of the stocks at the time of acquisition
  • Photocopy of Certificate of shares and evidences of expenses related to sale
  • Tax debit memo that is approved duly


You need to go to the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered to file the Capital Gains Tax Return.

File the return with the Revenue Collection Officer or Authorized City or Municipal treasurer if the place does not have an AAB.

File tax returns using eBIRForms if you are an ONETT (One-Time Transaction) taxpayer.


For amounts less than or equal to P100,000- 5%

For amounts more than P100,000- 10%


File tax returns within 30 days after each sale or disposition of shares of stocks or real property.

If there has been an installment sale, file the return within 30 days after the receipt of first down payment.

File a single return for multiple transactions in a day.

  1. Annual Capital Gains Tax for Onerous Transfer of Shares of Stocks not Traded Through the Local Stock Exchange


BIR Form 1707A


You need to go to the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered to file the Capital Gains Tax Return in triplicate.

File the return with the Revenue Collection Officer or Authorized City or Municipal treasurer if the place does not have an AAB.


For rates below P100,000- 5%

For rates above P100,000- 10%


Individual Taxpayer: On or before April 15 of each year.

Corporate Taxpayer: On or before the fifteenth (15) day of the fourth (4) month following the close of the taxable year


How to Apply for Taxpayer Identification Number (TIN)

Tax Form

BIR Form 1902 (download copy)
Application for Registration for Individuals Earning Purely Compensation Income and Non Resident Citizens/OCWS/Seamen Earning Purely Foreign Sourced Income


Documentary Requirements

– Birth certificate or any valid identification showing name, address and birth date; or -Passport with visa; or
– Employment contract


– Accomplish BIR Form 1902 and submit the same, together with the required attachments to the RDO having jurisdiction over the place of residence of the applicant.


Application for registration shall be accomplished and filed before filing a return, statement or declaration as required in the Tax Code and payment of any tax due.