Buying property in the Philippines as an Australian. What you need to know

Equally as well known for its delicious cuisine and bustling cities – as its stunning islands and white sand beaches – the Philippines is a popular destination for Australia tourists and expats alike.

Also offering a reasonable cost of living in comparison with Australia, it is easy to see why so many Aussies choose to relocate there. If you’re thinking of making the move to the Philippines, whether it be to retire, start a business or simply for a change, then you may also want to know what your options are for buying property there.

Read to discover whether this is allowed as an Australian and the processes involved. You may find yourself settled into life on this vibrant island nation sooner than you think.

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Note: This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent financial advice before making any form of decision.

Can Australians buy property or real estate in the Philippines?

Yes, however, there are some restrictions on this as Philippine real estate law does not permit foreign nationals to own property outright. What this means is that while you can purchase a flat or condominium as an Australian, you will not be able to buy or own land.¹

Further to this, you may only buy a flat or condo in a building if the current foreign ownership sits under 40% overall. This means you may be limited on where you can buy and will need to do your research carefully before buying – but we’ll talk more about this as we go on.

What is reciprocity when it comes to buying property in different countries

Some countries have what is referred to as Reciprocity or a Reciprocity Agreement for buying property. Intended to make these exchanges mutually beneficial, these agreements typically outline any protections and conditions for citizens of both nations when choosing to buy property in the opposing country.

In the case of Australia and the Philippines, no formal reciprocity agreement exists in terms of property. The Philippines currently levies stronger restrictions on foreign ownership than Australia for non-resident buyers..

What’s the property market like in the Philippines?

The Philippines experienced a record property boom between 2010 and 2018. However, several factors such as slowing domestic economy and eventually the COVID-19 pandemic saw the market sharply decline in the years following this.²

While is is slowly recovering and is now considered stable with encouraging growth projected, careful consideration is recommended before investing.²

Property prices for different types of property in different locations

Whether you choose to live in a busy city metropolis or popular beachside regions of Cebu and Boracay, pricing per square metre can vary significantly.

As foreigners are restricted to buying condos, which are largely equivalent to an apartment in Australia in terms of dwelling type, we have focused on pricing for these.

City/Region	Average Price per square metre
Manila³	PHP₱155,000 per sqm
Cebu³	PHP₱160,000 per sqm
Boracay³	PHP₱100,000 per sqm
Davao⁴	PHP₱133,000 per sqm
El Nido⁴	PHP₱158,000 per sqm

As seen on 19 July 2024

It is important to remember that these averages are by no means a firm indicator of what you can expect to pay. Just like anywhere in the world, exactly what you’ll pay per square metre will not only be down to location, but what amenities the property offers and how popular the region is.

How to find property to buy in the Philippines

Property agents and brokers

Just like Australia, property brokers and real estate agents must be licensed to sell property in the Philippines. Handled by the Professional Regulation Commission (PRC) agents must also sit an exam demonstrating their expertise to secure this license.⁵

It is recommended to find a trusted agent through your local network or by researching online. To check their credentials, you can visit the PRC website and search them by name as needed.

Property websites in the Philippines

Typically the preferred way to browse sale listings and prices throughout the Philippines dedicated real estate websites make it easier to find your ideal property.

Popular sites for searching out property listings throughout Germany include:

• Lamudi.com.ph
• Dot Property Philippines
• Myproperty.ph
• PH Realty

As if often the case throughout Asia, properties for sale may also be advertised through social media such as via Facebook marketplace. If you find a listing in this way, just be sure that you are dealing with a proper agent or property broker to avoid any risk of being scammed.

How to choose the right property to buy in the Philippines. What to consider

With both densely populated cities with residents in the millions to quiet coastal villages and everything in between, the Philippines offers a diverse range of properties and lifestyles depending on where you buy.

We recommend considering the following to determine which property will be best suited to your needs:

• Which city or region you like best
• Proximity to employment, schools, shopping, healthcare or similar
• What the public transport looks like
• The ideal property features such as the number of bedrooms and bathrooms you'd like
• Whether you desire a busy urban location or quieter spot outside the city
• The types of amenities you’d like access to within your condo building
• How safe the neighbourhood is and what type of security your building has
• Your budget range

Can you get a mortgage in the Philippines as an Australian?

You’ll find both local and global banks in the Philippines offering a wide variety of mortgage products. Yet while it can be possible to get a mortgage as an Australian, not all of these banks or lenders will be willing to lend. For those that do, strict criteria and lending limits may also apply.⁶

While you can approach these banks directly to check their current offerings for housing loans as a non-resident, working with a licensed mortgage broker is often the simpler solution.

Completely across which banks and lenders offer financing to Australian expats for purchasing a home, they’re also best placed to advise on which loans are most competitive and how to apply.

Documents needed for buying a property in the Philippines as an Australian

There are several documents you’ll need to arrange when buying a property in the Philippines. While some of these are required for all purchasers, as an Australian living in the Philippines, you’ll specifically need to make sure you have⁷:

• A relevant visa that verifies your right to live and work in the Philippines
• An Alien Certificate of Registration (ACR)– this is an ID card issued to foreigners by the Philippine Bureau of Immigration

What are the legal requirements for buying property in the Philippines as an Australian?

As noted previously, Australians, alongside other foreigners are legally restricted from buying certain types of properties or land in the Philippines.⁸

Aside from this and so long as you can provide the necessary documentation outlined above, the process can begin.

What are the taxes and fees usually levied on property purchases in the Philippines?

Just as you would expect in Australia, there are some taxes and fees you will need to cover as part of your property purchase in the Philippines. These include⁸:

• Transfer tax between 0.50-0.75% of the sale price
• Notary fees, typically around 1-2% of the sale price
• Registration fee of 1% of the sale price

Of course, if you have opted to engage a broker to assist you in your property search, you’ll need to factor in their fees too.

Steps to take to buy a house in the Philippines

Purchasing property in the Philippines follows a similar process to that of buying a home in Australia. Outlined below is the basic steps involved for buying a condo as an Australian citizen.³

• Research which bank or lender may be open to lending to you as a foreign national and if so, how much
• Start your property hunt, you may like to connect with a real estate broker familiar with your target locations
• Once you’ve found your ideal property you can then make an offer, usually submitted via a letter of Intent (LOI)
• Any negotiations regarding the purchase price can be made following the LOI
• After an agreement is reached between you as the buyer and the seller, you will then sign a reservation agreement and will need to provide a deposit
• Hire a lawyer to represent you and review the contract of sale and other key documents
• Sign a deed of sale once all terms are agreed upon and finalised
• Pay all relevant taxes and fees and then transfer the title and register at the Registry of Deeds and take ownership of your new home

Avoiding scams when buying a property in the Philippines

As an Australian buying property in the Philippines you may be targeted by fraudsters seeking to take advantage of your foreign status . To avoid falling victim to any property scams we recommend that you:

1. Only work with a registered agent that holds the proper permits
2. Beware of falsified land title documents used to deceive potential buyers and always verify these with a lawyer and relevant government agencies
3. Be extra cautious if searching for property via social media rather than professional real estate websites
4. If buying new or off plan, we wary of ‘double-selling’ scams whereby unscrupulous developers may sell to more than one buyer – always verify the credibility of a developer
5. Ask for recommendations from friends or industry experts regarding trusted lawyers for property transactions who will protect your interests

What else to keep in mind

Buying a property in the Philippines is not a guarantee or pathway to achieving residency or citizenship. To live and work there long-term, you will still be required to go through the normal government immigration processes to secure an appropriate visa or residency status.

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This article is purely for general information purposes and is not to be taken as financial advice. We recommend that you obtain independent financial advice before making any form of decision.

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Sources:

1. Sydney Philippines Consulate General - Owning Land In The Philippines
2. Global Property Guide - Philippine Property Market
3. InvestAsia - Philippine Real Estate Costs
4. Numbeo - Property Prices Davao vs. El Nido
5. PRC.gov - Examination Services
6. MoneyMax - Housing Loans In The Philippines
7. Federal Land - Documents required
8. Global Property Guide - Property Buying Costs

Sources checked on: 19 July 2024