Buying a property in the Philippines can be a complicated process, especially for those who are unfamiliar with the country's laws and regulations. One of the most important things to consider when purchasing real estate is making sure that you have all of the necessary documents and requirements. This can be a daunting task, but it's essential to ensure that the transaction runs smoothly and that you are protected legally. In this blog, we will discuss the must-have documents and requirements when buying a property in the Philippines, providing you with a clear understanding of what you need to prepare before investing in real estate.
Standard Documents
Acquiring real estate is a substantial investment that requires careful planning and preparation. To ensure that the transaction is legitimate and follows the legal process, it is essential to have all the necessary documentation. In the Philippines, there are specific legal requirements that property buyers must meet to purchase a property. These requirements may differ based on the type of property, its location, and other factors.
Community Tax Certificate
A Cedula or Community Tax Certificate is provided to an individual or company once they have paid the Community tax. This tax is paid in the area where the person lives or where the primary office of the company is situated.
Birth Certificate
A Birth Certificate is an essential document that confirms the birth of a child. It is an official record that contains information on the date and location of the person's birth, as well as their name, gender, the name of the mother, and often the name of the father. The term "birth certificate" can indicate the primary document itself or an authorized copy or representation of the original birth record.
Marriage Certificate
A Marriage Certificate is a paper that serves as evidence of a legally-binding relationship between two individuals, which establishes a social or familial connection between them. This union, which is frequently formalized through a wedding ceremony, may also be known as matrimony. Marriage is commonly defined as a social agreement between two people that combines their lives legally, financially, and emotionally.
Proof of Billing Address
To confirm your place of residence, you need to provide certain details, which can be obtained from various documents. These documents may include a utility bill, credit card statement, lease agreement, or mortgage statement, and they all serve as proof of residency. If you have opted for electronic statements, you can print a billing statement from your online account to serve as a valid proof of residency.
2 Pcs 1x1 ID Pictures
A 1x1 picture is an essential requirement when purchasing property in the Philippines as it serves as a valid form of identification. It must be a recent photo to ensure that the person in the picture is the same as the one purchasing the property, adding an extra layer of security to the transaction. Failure to provide a current photo may result in delays or even rejection of the transaction due to identification concerns.
Employees' Statement of Accumulated Value (ESAV)
This document, which is also referred to as the "Employee Statement of Accumulated Value" or "Pag-IBIG Contribution Printout," contains important details such as the member's name, Pag-IBIG ID number, TIN, employer ID, employer name, employer address, membership type, number of contributions, currency, employee contribution, employer contribution, "dividends," and the total accumulated value.
Member's Data Form (MDF)
The Pag-IBIG member data form (MDF) includes important personal information such as your Pag-IBIG MID number, Registration Tracking Number (RTN), employment status, work history, beneficiary information, and requires your signature. It is mandatory for all individuals, regardless of their employment status, to complete and submit the MDF form to the Pag-IBIG fund in order to become a member. This applies to those who are employed, unemployed, self-employed, or those who are seeking employment for the first time.
Income Documents (Self-Employed)
Business Registration
In the Philippines, having a business registration is a vital legal requirement that companies must obtain prior to commencing operations. This is a necessary step to comply with the provisions set forth in the Business Name Law or Republic Act 3883.
ITR for 2 Years
As defined by the Bureau of Internal Revenue (BIR), an income tax return (ITR) refers to a tax levied on a person's earnings. This encompasses income from employment, self-employment, property gains, business or trade operations, and other relevant income items.
Audited Financial Statements for 2 Years
For a self-employed individual or entrepreneur, a financial statement is a document that requires a certified public accountant's signature and must be included with the annual income tax return. However, in technical terms, financial statements are not merely simple documents but rather crucial reports or statements regarding the business that government authorities view as a vital requirement for operating a business.
Bank Statement
The Bank Statement is a record of all financial activities that have taken place in a specific bank account for a particular duration. This document details all the inflows and outflows of funds in the account and provides information about the account holder, account type, banking period, and all transactions related to the account. The Bank Statement also includes the beginning balance from the previous period and the closing balance from the current period, offering a comprehensive view of the account's financial status.
Picture of Establishment
A picture of establishment is an important requirement when buying a property because it helps verify the existence of the property, particularly if it's a newly constructed building or a vacant lot. It also provides a visual record of the property and can help in identifying it from among other similar properties. Additionally, having a picture of the establishment can assist in ensuring that the property being sold is in compliance with local zoning and building codes.
Income Documents: (Locally Employed)
COEC (Certificate of Employment and Compensation)
This refers to a certificate from the employer specifying the dates of an employee's engagement and the termination of his/her employment and the type or types of work in which he/she is employed. For purposes of this advisory, an employee whose employment is not yet terminated may also ask for a certificate of Employment.
Latest Copy of ITR
As defined by the Bureau of Internal Revenue (BIR), an income tax return (ITR) refers to a tax levied on a person's earnings. This encompasses income from employment, self-employment, property gains, business or trade operations, and other relevant income items.
Latest 2 Months' Payslips
A payslip is a document that records a person's earnings, which can be made either in paper or digital format. It contains details on an employee's salary, including any deductions such as taxes. In most countries, employers are required by law to give their employees a payslip. In some cases, it should be provided on the same day the payment is made, or within a week after the payment is made.
Income Documents: (OFW)
COEC (Certificate of Employment and Compensation) (Consularized)
This refers to a certificate from the employer specifying the dates of an employee's engagement and the termination of his/her employment and the type or types of work in which he/she is employed. For purposes of this advisory, an employee whose employment is not yet terminated may also ask for a certificate of Employment.
Latest 3 Months' Payslips & Remittances
A payslip is a document that records a person's earnings, which can be made either in paper or digital format. It contains details on an employee's salary, including any deductions such as taxes. In most countries, employers are required by law to give their employees a payslip. In some cases, it should be provided on the same day the payment is made, or within a week after the payment is made.
Bank Statement (If Applicable)
The Bank Statement is a record of all financial activities that have taken place in a specific bank account for a particular duration. This document details all the inflows and outflows of funds in the account and provides information about the account holder, account type, banking period, and all transactions related to the account. The Bank Statement also includes the beginning balance from the previous period and the closing balance from the current period, offering a comprehensive view of the account's financial status.
SPA Form (Notarized/Consularized)
An SPA refers to an agreement or contract made between two individuals. One individual, known as the principal, grants authority to the other individual, who is called the agent or Attorney-in-Fact. These two parties could be familiar with each other, such as family members, friends, a lawyer and a client, and so on.
In conclusion, purchasing a property is a significant investment and involves a complex process in the Philippines. However, ensuring that you have all the necessary documents and requirements will help you avoid legal troubles and protect your investment. By working with reputable and trustworthy real estate agents, lawyers, and other professionals, you can make the process of acquiring a property in the Philippines smoother and more manageable. Don't hesitate to seek guidance from the experts to make sure that you have all the essential documents and requirements in place, allowing you to enjoy your new home with peace of mind.