For Filipinos, a house is a rite of passage. It takes financial, psychological, and emotional readiness to purchase a property.
While others find excitement in the days leading to a house purchase, others feel overwhelmed by accomplishing requirements. After all, the documents needed to buy a house in the Philippines can make up quite a long list.
Many homebuyers get stuck on what documents they need to secure, leading to delays, extra costs, and even failed transactions.
This blog helps homebuyers prepare for their major purchase, especially ensuring the documents to make transactions flow smoothly. These are the documents that you need:
1. Personal Documents
The first set of papers to gather are the homebuyer’s documents. These play a crucial role in verifying the buyer’s identity, financial stability, and legal capacity to make the purchase.
Having the proper paperwork ready ensures a smoother transaction and prevents unnecessary delays.
This section will review the key personal documents needed to buy a house in the Philippines to help you prepare for this exciting milestone.
A. Valid Government-Issued ID
To confirm your identity, you must provide at least two (2) valid IDs issued by the government. These can include:
- Passport
- Driver’s License
- UMID (Unified Multi-Purpose ID)
- PRC (Professional Regulation Commission) ID
- SSS or GSIS Card
- Voter’s ID
Why is this needed?
Banks, developers, and government agencies require a valid ID to verify the buyer’s identity and prevent fraudulent transactions.
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B. Tax Identification Number (TIN) and BIR Form 1904
Under Philippine law, a Tax Identification Number (TIN) is mandatory for anyone engaging in a real estate transaction, whether buying or selling property.
The government uses the TIN to track taxpayers and ensure proper tax compliance. It is crucial for the transfer of ownership, registration of the property, and the payment of necessary taxes associated with the transaction.
You must apply through the Bureau of Internal Revenue (BIR) if you don’t already have a TIN. Fill out the BIR Form 1904, designed for individuals applying for a TIN for purposes other than employment. Submit the form at your local BIR office.
Once processed, you will be issued a TIN needed for various steps in the home-buying process, such as paying the necessary taxes, registering the property, and ensuring the legality of transactions.
Why is this needed?
TIN is essential for tax-related documents, such as the Capital Gains Tax, Documentary Stamp Tax, and Transfer Tax, which you pay when purchasing a house.
C. Proof of Income
When buying a property, lenders, developers, and sellers need proof of your financial capacity to ensure you can meet the costs associated with ownership.
The required documents depend on whether you’re employed or self-employed. Employed buyers must typically submit payslips, income tax returns (ITR), and proof of employment.
On the other hand, self-employed buyers usually must provide business financial statements, tax records, and other documents demonstrating consistent income from their business.
These documents help verify your ability to afford the property.
For Employed Buyers:
- The latest three (3) months’ payslips
- Certificate of Employment (COE) indicating salary and tenure
- Income Tax Return (ITR) or BIR Form 2316
For Self-Employed or Business Owners:
- DTI/SEC Business Registration Certificate
- Latest Audited Financial Statements
- Mayor’s Business Permit
- Income Tax Return (ITR)
Why is this needed?
Financial documents are essential to demonstrate your ability to afford the property, ensuring lenders that you can meet the financial obligations.
They are also necessary when applying for a home loan from institutions like banks or PAG-IBIG, which require proof of income and economic stability.
Without these documents, lenders may not approve your loan application or proceed with the transaction.
D. Marriage Certificate (If Applicable)
If you’re married, you must submit a PSA-issued Marriage Certificate because properties acquired during marriage are considered conjugal property under Philippine law.
Why is this needed?
Both spouses must sign real estate documents unless a prenuptial agreement states otherwise.
2. Property-Related Documents
Property-related documents are crucial to verify that the house or lot you purchase has a legitimate and uncontested ownership title.
These documents help ensure that the property is legally available for sale and free from legal disputes, such as claims or liens.
They typically include the property title, tax declarations, and certificates that confirm the seller’s right to sell the property.
Reviewing these documents assures you that the transaction is valid and that no legal or financial entanglements can hinder the purchase of the property.
Additionally, they protect you from potential legal complications after the sale, ensuring that you acquire a property with a clean and transferable title.
A. Title (Transfer Certificate of Title or Condominium Certificate of Title)
The Transfer Certificate of Title (TCT) for land and houses and the Condominium Certificate of Title (CCT) for condo units are essential documents establishing legal property ownership.
These titles confirm that the seller can sell the property and is free from encumbrances such as disputes or claims.
Request a Certified True Copy from the Registry of Deeds of the local government that holds jurisdiction over the property to ensure that the house title is valid and accurate, as this official document serves as proof of ownership.
Why is this needed?
A clean title guarantees that the property belongs to the seller and ensures no hidden legal issues, such as unpaid mortgages, unresolved inheritance claims, or third-party interests, to protect you as the buyer from potential legal complications and provides peace of mind that the property you are purchasing is free from encumbrances that could affect your ownership rights in the future.
B. Tax Declaration
A Tax Declaration is a document issued by the local Assessor’s Office that indicates a property’s assessed value and provides information about the payment status of its real estate taxes.
This document helps determine the property’s current tax standing and can be used to verify whether the seller has paid all the necessary taxes.
It also provides an official valuation of the property, which can be helpful for both parties when finalizing the sale.
Why is this needed?
It is crucial to check the Tax Declaration before purchasing a property because any unpaid real estate taxes could lead to legal complications in the future.
If the property has outstanding taxes, the new owner may be responsible for them, potentially causing delays or additional financial burdens.
Ensuring that the property is tax-compliant protects the buyer from inheriting tax liabilities or facing legal issues that could arise from unpaid taxes.
C. Lot Plan & House Plan
When purchasing a lot or house-and-lot, a lot plan and house plan are essential documents to verify the accurate dimensions and layout of the property.
The lot plan outlines the boundaries and size of the land, while the house plan shows the house’s design, structure, and layout.
These plans are typically provided by the seller or developer, ensuring that what you are purchasing matches the property’s description.
Why is this needed?
These documents help protect the buyer by confirming that the land’s measurements are accurate and that there are no discrepancies between the property’s actual size and the listing.
Additionally, they ensure that no unauthorized extensions or modifications were done to the property, which could affect its value or compliance with zoning laws.
Having these plans gives the buyer a clear understanding of what they are buying and helps prevent future legal issues regarding property boundaries or construction.
3. Loan and Financing Documents (If Using a Home Loan)
Additional documents are required to complete the process if you’re financing your property purchase through a bank loan or PAG-IBIG.
These documents help the lender assess your financial situation and determine your eligibility for a loan. The needed documents typically include:
Bank or PAG-IBIG Loan Application Form: This form, provided by the lender, is necessary to apply for a loan formally. It outlines your personal and financial information and the property details you intend to purchase.
- Latest Bank Statements—These are required to verify your financial standing and demonstrate your ability to manage monthly payments. Lenders usually request several months of statements to assess your income, expenses, and overall economic health.
- Letter of Guarantee (LOG) or Loan Approval—This document confirms that the lender has approved the loan, stating the loan amount, interest rate, and other terms. It’s an essential part of the process that shows the lender’s commitment to financing your purchase.
- Deed of Sale (for resale properties)—If you’re purchasing a pre-owned property, this document confirms the transfer of ownership from the seller to the buyer. It’s necessary before the loan can be processed and is typically provided by the seller.
Why is this needed?
Banks and financing institutions require these documents to evaluate your financial capability and ensure you can meet the loan’s repayment terms.
They assess your income, economic stability, and the legitimacy of the property to minimize the risk of default.
Reviewing these documents lets lenders confirm that you can handle the loan’s financial obligations and ensure the property is legally available for financing.
4. Seller or Developer Documents
When buying a house from a developer or private seller or purchasing a foreclosed property, you will need additional documents to ensure the transaction is legally binding and smooth.
- Reservation Agreement – This document is necessary for pre-selling properties to confirm that you have reserved a unit. It proves that you have expressed interest in purchasing the property and sets the stage for the formal agreement once the unit is ready for sale.
- Contract to Sell—Once you’ve made the down payment, the seller will issue this contract, which outlines the agreed-upon terms and conditions of the sale. It marks when you are officially committed to purchasing the property, even though full ownership has not yet been transferred.
- Deed of Absolute Sale—This is the final document that legally transfers ownership of the property to you after you complete the full payment. It is executed when the financial obligations are settled and the seller formally relinquishes property ownership.
Why is this needed?
These documents are essential because they legally bind both the seller and buyer to the terms of the sale, ensuring that each party fulfills its responsibilities.
They also provide proof of ownership transfer, protecting both parties in disputes or misunderstandings.
Securing these documents ensures the property purchase is legitimate, transparent, and legally recognized.
Step-by-Step Home Buying Process in the Philippines
Now that you’re familiar with the required documents, here’s an easy-to-follow guide to the process of buying a house in the Philippines:
- Find a Property—Search for properties that align with your budget and preferences. Compare different options, locations, and features, such as size and amenities, to find the one that best suits your needs.
- Gather Personal and Financial Documents—Ensure you have all the necessary documents, such as valid IDs, proof of income, and tax records. These will show your financial ability to purchase the property and help with the loan approval process if you seek financing.
- Verify the Property’s Legal Documents—Double-check the property’s legal documents before proceeding. Confirm that the title is legitimate, the tax declaration is up-to-date, and there are no legal issues, like liens or disputes. To ensure its authenticity, get a Certified True Copy of the title from the Registry of Deeds.
- Negotiate and Finalize the Sale – Once satisfied with the property, negotiate with the seller on the price and payment terms. Discuss the down payment, installment plans, and additional conditions to ensure both parties agree.
- Sign the Contract and Pay the Fees – After finalizing the terms, sign the sale contract and pay any necessary taxes and processing fees. These can include documentary stamp tax, notarial fees, and registration costs, so keep a record of all payments made.
- Transfer the Title – The next step is to transfer the property title to your name. This involves registering the property with the Registry of Deeds, paying the transfer taxes, and updating the title to reflect you as the new owner.
- Move into Your New Home! Once the title transfer is complete, you can finally move in! Remember to have the utilities transferred to your name and ensure the property is fully secured before settling in.
By following these steps, you’ll be on your way to successfully purchasing a property in the Philippines, with all legal and financial aspects taken care of.
Final Tips for a Hassle-Free Home Buying Experience
The documents needed to buy a house in the Philippines are just one of the aspects of the fulfilling process of getting your own home.
These tips would help you avoid the arduous route others have taken:
- Partner with a reliable real estate agent or lawyer – They can help guide you through the process and protect you from potential fraud.
- Review all documents carefully – Ensure all documents are complete and legitimate to avoid delays or cancellations of your purchase.
- Check the property’s status at the Registry of Deeds – Always request a Certified True Copy of the title to verify its authenticity.
- Understand your payment options – Whether paying in full, applying for a bank loan, or using PAG-IBIG financing, choose the option that best fits your financial situation.
Conclusion
Buying a house in the Philippines involves several essential documents, but the process can be smooth and stress-free with proper preparation.
Whether you’re a first-time buyer or a real estate investor, knowing these requirements will help you make informed decisions.
Need help with your home-buying journey? Consult with real estate professionals to ensure a safe and secure transaction. Happy house hunting!
