Apartment in Philippines?

B

Babsy

Registered User
Messages
17
Hi Guys,

I’m new to the overseas investment game so bare with me…

Anybody ever consider buying property in Asia?

I just returned from visiting some friends in the Philippines (Manila).
I am now toying with the idea of buying a condominium (apartment) over there. A very high-end apartment (best part of town) would cost about 130,000 euro (including stamp duty, legal fees and paper work) but a conservative rental income quoted by the management company was about 900 euro per month. I was very sceptical about this figure so I did some research myself on various web sites and talking to people on the ground and they confirmed this!

During my visit I found it very difficult to rent an apartment and paid about 50 euro per night for a very basic one

Property appreciation is running at about 10-15% as well…
GDP was 5% last year and is expected to be similar this year

Obviously there are additional costs, management company (1 months rent per year), maintenance (euro 90 per month)

I have access to trusted solicitor in Manila (friends uncle) and have friends there…

My two big issues at the minute
1) TAX
There is no double taxation agreement between Ireland and the Philippines so a good citizen needs to pay tax in both countries. I was trying to figure out can tax paid in the Philippines be deducted from the gross amt to be taxed on in Ireland? Looking at the IT 70 form on the revenue website it states - “Deductions are also normally available in respect of such income for sums in respect of foreign tax paid.” Does the “normally” apply in my case???

2) Disposable income of Filipino Workers
With min wage about 8 euro per day and the “average” person in a good job can only expect 400 euro per month how can people afford to rent??? I know some companies pay their employees rent and often rent apartment for overseas visitors…

what do you think ???
 
There are plenty of people in the Philippines with money, the locals with money prefer to own, rather than rent long term. If you have good trustworthy (the Key to the whole enterprise along with location) management company, there should be no problems renting to foreigners. It really depends on the management company, don't be afraid to discreetly incentives the staff doing the renting. As with most Philippine companies the staff are paid very little, while the owners are make a fortune. You also have to make sure you are buying the property it the proper price and not the foreigner price, the 'proper' price may not be what is on the glossy brochure. Legally only 40% of a condo block can be owned by foreigners. You would also need to check out getting your money home. There are 'limits' on how much you can take out of the country.

The locals prefer to invest their money in a 'Pension House' which would be more like a block of Bed Sits here, like pre 1980's Rathmines. Rent them cheap and pile them in, don't worry too much about maintance and you will never be without tenants.!!

Towger.

Just to add: I would be slightly wary if you have someone actively trying to get you to buy the property, it is common in the Philippines for the person who introduces the purcher to the seller to be paid a finders fee. There is CGT for the seller on all property sales. It should be no problem if buying in well run Condo development, but I don't think the property can be registered until it is paid by the seller. Generally they don’t bother with using a Lawyer when selling/buying property, just DIY it, lots of forms/photocopying, queuing up at the tax office and town hall etc. It only takes a few days to do the paper work, but it might take a week or two for the town hall to type up the new documents (all manual). Having that of 'I' was buying property I would use a Lawyer, but I have gotten roped in to queuing up in the town hall when buying land! I was hold that I lawyer would cost 200-300 euro and are a waste of money!



Towger
 
Last edited:
You must log in or register to reply here.
Menu
Log in
Register