Author Topic: Clarification  (Read 3925 times)

Offline Dirtyjay

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Clarification
« on: August 26, 2011, 10:44:31 AM »
Hi guys,

I\'ve read most of the posts on this topic and they are very interesting, but I wonder if I can get some clarification on a couple of things.

First, in several posts I\'ve seen figures of around 8,000 to 10,000 PHP per sq meter to actually build a house. That seems reasonable but sites that I\'ve visited for Phils builders give prices of about 25,000 per sq meter. Is the 10,000 level realistic?

Second, I presume the lots (property) is in the name of the Philippine spouse which would seem to be the only practical way to own land there. Again, the figures I\'ve seen here suggest a cost of around 1,000 PHP per sq meter for a lot. Is that a reasonable assumption?

Third, I\'ve seen several posts talk about engineers employed in building these houses. To me that seems odd for a one or two story home. Do you really need an engineer involved in something like that? I would have expected, once you have the designs done that a contractor should be able to build the home without an engineer.

Also, it would be really interesting to see some photos of these homes along with what it actually cost to put them up for both the land and the actual building itself. Some of the posts have that but in several the numbers are buried or confusing.

I\'m going to be looking at getting some land and building in the next year or so --- quite possibly on Tablas.

Thanks guys

Offline RUFUS

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Re: Clarification
« Reply #1 on: August 26, 2011, 11:35:11 AM »
Prices vary according to where you live.
P1000 per sq/m for land may be high in one area and a great deal in another.
As far as the rest of your questions, you will need to do your own research once you put boots on the ground for the answers you seek.
SO SAYETH THE RUFUS

Offline oneiloilokano

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Re: Clarification
« Reply #2 on: August 26, 2011, 03:31:53 PM »
P 10,000 PSM is not realistic. I spent P12,500 psm to build my home 3 years ago. That cost did not include the \"finishing work\" like paint, tiles, countertops and electrical fixtures. Nothing fancy just middle of the road decent stuff cost me over P150,000, not counting labor. Building materials have since gone up by 20%.

The cost of the property varies greatly as in all real estate by location.
Here in Iloilo City proper the cheapest subdivision property is P 4,000 psm and the most expensive is P8,000 psm.  Budgeting P1,000 psm would not be realistic at all here.
Yes the wife owns the property. I just paid for it.

Engineer/Archetect the names are interchangable here. Yes you need one because they have to be licenced to get a building permit.

Everything you thought you knew about building houses you can throw out the window.  I found that out the hard way through costly experiance.

My house pictures are at www.philippinesplus.com Just for the record it cost me P1.4 m to build, P1m for the 300 sqmtr\'s of property and another P150,000 in paint, tiles and electrical fixtures.

Offline Dirtyjay

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Re: Clarification
« Reply #3 on: August 26, 2011, 10:13:09 PM »
Thanks for the info Oneiloilokano, I appreciate the info.

The building permit thing makes sense I suppose, I will have to investigate that.

I looked at your ad on that website -- looks like a lovely home and I hope you sell it quickly.

As far as the cost numbers go you have confused me even more. In the ad it says your home is 203 sq meters on a 300 sq meter lot.
If I do the math you said you paid 1.4 million for the build plus another 150,000 for the \"finishes\". That is a total outlay of 1,550,000 for the complete build of the house. For a 203 sq meter house the math comes out to only 7,635 per sq meter which is actually lower than the other figures posted on this forum. Seems very inexpensive and encouraging.

For the lot itself, we are not planning to live in a subdivision for various reasons so I imagine the cost per square meter will be lower. I doubt that there even are any subdivisions on Tablas -- have never seen any ads for that sort of thing there.

The father and uncle of my wife have both worked in construction and the build would probably be on her home island so that should help to keep costs a little lower as well.

Yeah, I know full well that everything in the Phils is different than what we consider the norm or the \"right way\" to do things in North America. This can be both a good thing and a bad thing. I often look around me and wonder if we really have the right idea here in North America.

Offline oneiloilokano

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Re: Clarification
« Reply #4 on: August 29, 2011, 10:20:09 AM »
I should have been more specific. If you add in the cost of the property plus building you\'ll see it came out to just over P12,000 psm for the house and lot.
If your building outside of a subdivision make sure you know the differance between a \"deed of absolute sale\" and a tax declation certificate.
A deed is the title to the land and shows ownership. The tax declration is merely proof of paying taxes on the property. It is just a right to occupy public land at the convience of the local government. It does not give ownership rights. Many locals don\'t know the differance. Also make sure you go face to face with the owner of the property. The one who\'s name is on the deed. Real estate fraud is so common here it should be listed as a national pastime. Never deal in a property that was \"inhearited\" because there are most likely back tax issues and there could be several owners with one trying to sell the property behind the others backs. Cival cases here take a minimum of 6 years to make it to court. I know this because our family lawyer here took out a loan on property my wife had bought years ago. When we got tired of not being given the title after a year we hired another lawyer and found out the real deal.
Also be sure that the sellers show a official reciept showing the back taxes are up to date. There is also a title transfer fee of roughly 8% when you buy property. It is normally paid by the buyer.

Offline Dirtyjay

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Re: Clarification
« Reply #5 on: August 29, 2011, 09:48:22 PM »
Thanks again oneiloilokano.

Those figures now make sense and they are actually quite encouraging. If I use your numbers it means I can build a nice little house of around 1,200 to 1,500 sq feet for about $30,000 to $35,000. That would be a fantastic bargain.

I am assuming that on Tablas without a subdivision the cost of land will be much less. If these numbers are anywhere close to real then it certainly makes sense to build something.

I would be really interested to see if your numbers and experiences are similar to those that other members here have run into. So far there has been no input from anyone else.

It would be very nice if we could create a sort of reference file here for members of what can be done and approximately what it would cost. Yes, I know the costs of land and other things will vary depending on location, but at least a general idea of cost ranges and what they can get you is a good thing for anyone planning to move to the Philippines.

Jay

Offline fred

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Re: Clarification
« Reply #6 on: August 30, 2011, 12:22:18 PM »
People have been saying that 8 and 12 k per sqr meter is doable for at least the last 7 years.. In the last 3 years Cement has gone from 160.00 Peso per sack to 220.00..Sand from 550.00 to 1050 Pesos per Cubic Meter..Same with gravel and that is just for starters..
Im not saying that its not doable,just saying you will definitely not get what you might have expected 3 years ago!!

Offline oneiloilokano

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Re: Clarification
« Reply #7 on: August 30, 2011, 12:42:18 PM »
The numbers are real.
Fred brings up a valid point about the cost of materials skyrocketing from what they were a few short years ago.
Also from my experiance budget what you \"think\" your going to spend and add 20%. That will get you close :).
Going out into the countryside will get your land costs down, but increases your chance of land fraud by at least 100% building outside a subdivision.
Good luck and would like to hear what it costs you when the time comes.

Offline c_a_p_t_a_i_n_r_o_n

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Re: Clarification
« Reply #8 on: August 31, 2011, 12:24:44 PM »
To add to Paul\'s 8% tax, capital gains tax should be paid by seller, but if buyer is foreigner expect to be asked to pay that too

Offline Dirtyjay

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Re: Clarification
« Reply #9 on: August 31, 2011, 10:26:04 PM »
That is interesting Fred ---- from everything I have researched, the inflation rate in the Philippines has been around 4% to 5% for the past several years. Its odd that the costs of building materials would have virtually doubled. Especially since building is so critical to the development of a country.

Captain Ron, I am hoping that since the title to the property will be in my wife\'s name that the whole Kano thing can be avoided at least for the property portion. I am seriously expecting to be able to buy a small building lot in Odiongan or Looc for about 1,000 a sq meter. With this sparsely populated island being the home of my wife\'s family I hope that we will be dealt with fairly.

If I can get the land at that kind of price then we are talking about 300,000 to 400,000 PHP and the capital gains on that would range between $400 to just over $500 total. Worth knowing, but not a killer.

Thanks

Joachim

Offline richardsinger

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Re: Clarification
« Reply #10 on: September 01, 2011, 06:14:14 AM »
I\'ve been involved in a few property negotiations. From what I\'ve seen, the capital gains and transfer costs will usually be paid by the seller, but if the buyer tries to squeeze the price down too far the seller will ask the buyer to pay these charges. I think it\'s reasonable for the seller to want to make some profit on the deal. You just need to see the charges as part of the overall price and decide if it is ok for you or not. BTW in my area the 8% figure is not really useful, because it is based on a zonal valuation for the land/property, not on the actual selling price. If you have a contact at city hall you can find out the real charges quite easily.

I\'ve also seen a situation where the asking price suddenly jumped as soon as the seller saw that a kano was involved, but this was so blatant that it wasn\'t a problem at all. We just thanked her and walked away.

Richard

Offline fred

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Re: Clarification
« Reply #11 on: September 01, 2011, 10:21:50 AM »
Quote
That is interesting Fred ---- from everything I have researched, the inflation rate in the Philippines has been around 4% to 5% for the past several years. Its odd that the costs of building materials would have virtually doubled. Especially since building is so critical to the development of a country.


From my observation the prices of building materials in our area go up whenever there is a hike in fuel costs..Problem is that †after that,when there is a fuel price roll back the costs of building materials stay at the elevated cost.. To me its a scam and completely unregulated.
Another example is Gasul.. 7/8 months ago in our area we were paying 650.00 PHP per 11 Kilo`s.. After the eighth month I was shocked to notice that the new price was 900.00 Pesos!! †Next month it could jump to 1,200 PHP and I would probably never be able to find out why.
This is about the only country I know where land prices since 1980 have only ever gone up in value,never down..
The trend is my friend and thats why I have always bought land here for long term investment purposes..
It is what it is..Ive long since given up trying to make sense of it..He he.


Offline c_a_p_t_a_i_n_r_o_n

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Re: Clarification
« Reply #12 on: September 01, 2011, 01:38:23 PM »
There\'s quite a lot of pressure on building materials from Chinese sources, so as demand increases so does price

Good luck in hiding the Kano factor† :D


Offline graham

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Re: Clarification
« Reply #13 on: September 03, 2011, 09:01:06 PM »
To add to Paul\'s 8% tax, capital gains tax should be paid by seller, but if buyer is foreigner expect to be asked to pay that too

Dave,

I got caught on that one. Never even knew about it until I had to pay the BIR.

Joachim,

You will never avoid the \"Kano\" tax. News travels on the \"grapevine\" and it will
be known that you are interested in that land. **Sparsely populated, and you are
hoping you will be treated fairly**. People here are poor, as you well know. Just
like any other country in the world people are out to make as much money as
they can. I echo Capt. Ron...good luck.

Graham

Offline Dirtyjay

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Re: Clarification
« Reply #14 on: September 05, 2011, 08:26:22 PM »
Ok guys.

You are probably right about not being able to hide the \"kano\" factor and I know from personal experience that means I will pay a premium because they assume I am rich. Understandable.

If you really think about it though that 6% Capital Gains Tax on the land is not much in terms of the total dollars it adds to the cost of buying land and building a house. The overall cost still sounds incredibly cheap.

There is certainly nowhere in Canada that I can buy a plot of land and build a nice little house for somewhere between $30,000 and $50,000. Even if they soak me for a few extra PHP it still sounds very worthwhile.

Those sort of numbers are also much better than the costs I see on various websites for buying an existing house and lot. Most of those are in subdivisions and come out to much higher figures per sq meter. The house that oneiloilokano has listed is one of the very few that is being offered at something approaching the actual land and construction costs. It looks like a real bargain in fact.

I would still be very interested in seeing some pictures and figures from other people in this forum ---- I think it would be an excellent reference source for anyone looking to move to the Philippines.

 


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