Are you an aspiring homeowner? With today’s evolving market and economic landscape, it is essential to get ahead and take advantage of the current real estate prices by choosing to invest now. You’ve done the research among the Philippine real estate developers, evaluated your lifestyle needs, and now you’re ready to make the move. However, not many aspiring homeowners are aware of the costs that come in purchasing their first home.
Most are enticed by the low monthly amortization for the downpayment and get surprised by the succeeding move-in fees, bank charges, and more. Most dub this as “hidden fees” when, in fact, they’re industry standard costs that every aspiring homeowner like you will encounter with any real estate company in the Philippines.
Fret not, we’re giving you a checklist of terms and fees to consider when buying your first home.
1. Transfer Taxes and Fees:
- Capital Gains Tax: If you’re selling a property, you’ll be subject to a capital gains tax. This tax is calculated based on the profit made from the sale.
- Documentary Stamp Tax (DST): This tax is levied on documents related to the sale of real property. The DST rate varies depending on the property’s value.
- Registration Fees: Fees are charged for registering the property transfer with the local government.
- Notary Fees: The cost of having the sale documents notarized.
2. Maintenance and Association Fees:
- Condominium Corporation Fees: If you’re purchasing a condominium unit, you’ll need to pay monthly or annual association fees to cover the maintenance and upkeep of common areas. This is usually charged per square meter of your unit or home.
- Homeowners Association Fees: Similar to condo fees, these fees are applicable to homeowners in gated communities and are used for maintaining common facilities and amenities.
3. Property Taxes:
- Real Property Tax: This annual tax is based on the assessed value of your property. The tax rate varies depending on the location and type of property.
- Special Assessment Taxes: These taxes may be imposed for specific improvements or projects in your area, such as road construction or infrastructure development.
4. Insurance:
- Homeowners Insurance: This policy covers damage to your property and liability for accidents or injuries.
- Fire Insurance: While often included in homeowners insurance, it’s essential to verify coverage and limits.
- Flood Insurance: If your property is in a flood-prone area, consider purchasing flood insurance to protect against potential losses.
5. Utilities:
- Electricity: The cost of electricity varies depending on your consumption and the local utility provider’s rates.
- Water: Water bills are typically based on consumption.
- Internet and Cable: These services are essential for many homeowners and can add to monthly expenses.
6. Home Improvements and Renovations:
- Maintenance Costs: Regular maintenance, such as painting, repairs, and landscaping, can add up over time.
- Renovations: If you plan to renovate your property, factor in the costs of materials, labor, and permits.
7. Legal Fees:
- Attorney’s Fees: Legal counsel may be necessary during the purchase process, especially for complex transactions or if you encounter legal issues.
8. Property Management Fees:
- **If you’re planning to rent out your property, consider hiring a property manager to handle tenant relations, maintenance, and rent collection. This service comes with a fee.
9. Furniture and Furnishings:
- Furnishing Costs: If you’re purchasing a new property, you may need to invest in furniture, appliances, and other furnishings.
10. Unexpected Expenses:
- Emergency Repairs: Be prepared for unexpected repairs, such as plumbing or electrical issues, that may arise.
- Natural Disasters: If your property is located in a disaster-prone area, consider the potential costs of recovery from events like typhoons or earthquakes.
Anticipating these additional investment costs will allow you to form a sound financial plan during the homebuying process. It’s advisable to conduct thorough research, consult with professionals, and factor in these additional expenses when evaluating your budget and investment strategy.
To ensure high end standards for your first home, choose one of the best Philippine real estate companies, Century Properties. Consider mid-rise living in a quiet gated community at the Residences at Commonwealth by Century, or choose resort-inspired living at the Resort Residences at Azure North. Its pre-selling units in Azure North are conveniently near Metro Manila via Skyway stage 3 exit with easy access to SM Pampanga, San Fernando.
Your hard earned money deserves utmost quality. Find your next home at www.century-properties.com
Glossary of Terms for “The Buyer’s Guide to Real Estate in the Philippines” Article
Term: Down Payment Definition: The initial payment made towards the purchase of a property, typically a percentage of the total price.
Term: Amortization Definition: The process of repaying a loan with fixed monthly payments that include both principal and interest.
Term: Hidden Fees Definition: In this context, a misnomer for standard industry costs associated with real estate purchases that are not included in the base price.
Term: Transfer Taxes and Fees Definition: A group of taxes and fees levied on the transfer of property ownership.
- Capital Gains Tax: A tax paid on the profit made from the sale of a property.
- Documentary Stamp Tax (DST): A tax levied on documents related to the sale of real property.
- Registration Fees: Fees charged for registering the property transfer with the local government.
- Notary Fees: The cost of having a notary public sign and verify the authenticity of sale documents.
Term: Maintenance and Association Fees Definition: Ongoing charges levied to cover the upkeep of shared spaces and amenities.
- Condominium Corporation Fees: Monthly or annual fees for maintaining common areas in a condominium building, typically based on the unit’s size.
- Homeowners Association Fees: Similar to condo fees, these are charges for maintaining common facilities and amenities in gated communities.
Term: Property Taxes Definition: Annual taxes levied by the local government based on the assessed value of the property.
- Real Property Tax: An annual tax based on the assessed value of your property.
- Special Assessment Taxes: Additional taxes levied for specific improvements or projects in your area.
Term: Insurance Definition: Financial protection against potential losses due to damage or liability.
- Homeowners Insurance: Covers damage to your property and liability for accidents or injuries.
- Fire Insurance: May be included in homeowners insurance, but it’s important to verify coverage limits.
- Flood Insurance: Protects against flood damage, particularly important in flood-prone areas.
Term: Utilities Definition: Essential services required for daily living, typically billed monthly.
- Electricity: Costs vary depending on consumption and the provider’s rates.
- Water: Bills are typically based on consumption.
- Internet and Cable: Optional services that add to monthly expenses.
Term: Home Improvements and Renovations Definition: Work done to improve the functionality or aesthetics of a property.
- Maintenance Costs: Regular upkeep expenses such as painting, repairs, and landscaping.
- Renovation Costs: Costs associated with major improvements, including materials, labor, and permits.
Term: Legal Fees Definition: Fees paid to an attorney for legal services related to the property purchase.
Term: Property Management Fees Definition: Fees paid to a property management company to handle tenant relations, maintenance, and rent collection for a rental property.
Term: Furnishing Costs Definition: Expenses associated with purchasing furniture, appliances, and other household items for a new property.
Term: Unexpected Expenses Definition: Unforeseen costs that may arise related to property ownership.
- Emergency Repairs: Unexpected repairs for plumbing, electrical, or other issues.
- Natural Disaster Recovery: Costs associated with repairs and recovery after a natural disaster.
