24 Hidden Costs of Buying Real Estate

When saving up for a home, you have to put together an amount that’s greater than the property’s price. 

The reason behind this is that the price of the property itself isn’t the only cost you pay for. 

Purchasing a home requires various payments that are often seen as hidden costs because they’re often not mentioned until the transaction begins.

To give you an idea of what you should also prepare yourself for financially when you buy your home, like getting your dream property in La Zagaleta in Bromley Estates Marbella, here are some of the additional charges involved in real estate.

The real property tax is an annual levy imposed by the local government unit as stipulated in Republic Act (R.A.) no. 7160. The amount can differ depending on where the property is; Metro Manila property owners are required to pay 2% of the assessed value of the home as real property tax, while provincial properties are taxed 1%. For condo unit owners, the amount is subdivided among all the residents of the whole condo building. For idle lands, LGUs will also collect a maximum tax of 5% of the assessed value of the land.

Under R.A. No. 5447, an amount equivalent to 1% of the property’s value is also collected yearly from property owners. This payment is accrued to the Special Education Fund (SEF), which aims to finance the construction of schools, the purchase of instructional materials, and other academic costs of the local government.

Property TaxTransfer tax is required for changing the ownership or title of real property from the seller to the buyer. Maximum rates are usually 50% of 1% of property value, but Metro Manila cities and municipalities are charged 75% of 1%.

The registration fee is paid for the registration of the deed of sale. For a property with a selling price not exceeding Php1.7 million, the registration fee will be a maximum of Php 8,796. If the price exceeds Php1.7 million, an additional Php90 for every excess of Php 20,000 or fraction of Php 20,000 will be charged.

Because a residential property is considered a capital asset, the seller is required to pay a capital gains tax amounting to 6% of the property’s gross selling price or fair market value or zonal value, whichever is higher.

The documentary stamp tax is charged to the buyer, and is paid to serve as evidence of acceptance, assignment, sale or transfer of an obligation, right or property incident. The amount to be paid is 1.5% of the selling price or zonal value, whichever is higher.

For those who are buying a property to serve as an investment, they are required to pay value-added tax in the amount of 12% of the gross receipts for lessors, 10% of the gross selling price or zonal value (whichever is higher) for cash sale or deferred plan sales; and 10% of installments received or constructively received for installment plan sales.

Creditable withholding tax (CWT) is charged when the transaction involves the sale, transfer, or exchange of real property considered as ordinary assets, which are basically properties normally involved in the seller’s trade or business. Rates range from 1.5% to 6%, depending on the selling price of the property and if the seller is not habitually engaged in real estate. However, a seller is exempted from paying the CWT if the sale involves socialized or low-cost housing.

Condo owners are required to pay association fees, which cover maintenance and cleaning of, and electricity in common areas; and security services. It’s also likely that the selling price doesn’t already include the parking fee, which is something to consider.

As for the person who worked with you through the transaction, processing fees have to be paid as well, while the broker’s fee should be equal to 3–5% of gross selling price. For those who are leasing out the property with the help of a manager, the profit sharing between the manager and you would typically be 70–30.

Before deciding to purchase a property under the assumption that it’s affordable based on the unit’s price, be sure to ask for a computation of all the fees involved in the whole transaction. This will prevent any surprises when it’s time to pay for the property and the amount differs from what is advertised.

Sources: abs-cbnnews.com, nreaphilippines.com, foreclosurephilippines.com, doingbusiness.org

This is a sponsored post.

Lamudi started in 2014 and is already deemed as the biggest online real estate website in the Philippines, which quickly became the most visited online property platform and currently have more than 700,000 visitors per month. Lamudi is a part of the Rocket Internet Group who also founded Zalora, Lazada and Carmudi.


Are you planning to buy a property soon? Keep an eye on these things! Receive cool updates like this when you subscribe to PisoandBeyond!


  1. Very well said.....reading your post here allowed me to instil further information on my mind as an inspiring small time investor in our country. Thanks a lot for sharing with your readers this post. Ciao. www.danyan2001us.com

  2. I thought the price of properties I see in adverts in newspapers is all there is. That there is no hidden charges of any sort. Its nice to know those things.

    1. The problem is none of these "agents" will tell you these things. hahaha

  3. For idle lands, LGUs will also collect a maximum tax of 5% of the assessed value of the land.Kensington Greece

  4. What information would you be able to get from a decent land contributing book? There are a numeral of online locales, which can bring out you learning and indicates on how start touch base at your land speculations appropriately. mcitycondosdeal.ca/floorplan-and-prices/

  5. Fixtures or personal property that are excluded from the contract or offer to purchase. Homes for Sale

  6. Regardless of your working style, whether you are working as a part-time or a full-time real estate agent always try to attend seminar and conventions so that you can gain the knowledge of the current market trends and interact with other agents - you might get some customers over there too For Successful real state Agent go Check Out REALESTATE KO Tips.

  7. If you were to purchase a property that initially looked okay but turned out to have some issues later local realty service

  8. Breathtakingly delightful utilization of words.
    I want to sell my home in Tallahassee

  9. Extraordinary things you've generally imparted to us. Simply continue written work this sort of posts.The time which was squandered in going for educational cost now it can be utilized for studies.Thanks villa for sale Marbella

  10. real estate prices are getting high in marbella
    marbella apartments / penthouses for sale
    apartments for sale marbella costa del sol bank reppossesions
    luxury penthouse seaviews in marbella
    luxury penthouses for sale or rent in marbella and marbella and Malaga apartments for sale
    Luxury villas for sale marbella , villas for sale Los Monteros, Villas for sale marbella, villas for sale sierra blanca, villas for sale marbella golden mile , villas for sale Nueva Andalucia, villas for sale puerto banus, villas for sale Guadalmina baja, villas for sale la zagaleta, villas for sale los arqueros , villas for sale la alqueria , villas for sale Los Flamingos , Townhouses for sale marbella, Apartments for sale Marbella, apartaments for sale nueva andalucia, Apartments for sale Puerto Banus, penthouses for sale marbella, penthouses for sale estepona, Plots For Sale Marbella , Plots for sale Estepona

    Luxury villas for sale marbella, villas for sale Los Monteros, Villas for sale marbella, villas for sale sierra blanca, villas for sale marbella, golden mile, villas for sale Nueva Andalucia, villas for sale puerto banus, villas for sale Guadalmina baja, villas for sale la zagaleta, villas for sale los arqueros, villas for sale la alquería, villas for sale Los Flamingos, Townhouses for sale marbella, apartments for sale Marbella, apartaments for sale nueva andalucia, Apartments for sale Puerto Banus, penthouses for sale marbella, penthouses for sale estepona, Plots For Sale Marbella, Plots for sale Estepona
    SpainForSale.Properties is an Exclusive Real Estate Agency offering Luxurious Properties For Sale and Rent on the Costa del Sol, such as: Luxury VILLAS FOR SALE EL MADRONAL SpainForSale.Properties is considered one of the most trusted Exclusive Real Estate Agencies in Marbella, Costa del Sol and other “Prime Locations” in Spain. Live on the Costa del Sol and Enjoy a Luxurious lifestyle in one of the most beautiful places of the World. Luxury Properties For Sale in Prime locations of the Costa del Sol: Mijas, Marbella, Benahavis, Estepona ….
    #LuxuryRealEstateMarbella #LuxuryPropertiesMarbella #Investment #PropertySpecialist #Immobilienmakle #العقارات #недвижимость #Fastigheter #Mäklare #ForSaleMarbella @SpainForSale.Properties
    @SpainForSale.Properties #Marbella #Costadelsol #PuertoBanus #VillaForsaleinMarbella #VillaForSaleMarbella #RentalsMarbella #ApartmentsForsaleinMarbella #PlotForSaleinMarbella #CostadelGolf

  11. This bit of blog shows commitment of essayist.

  12. Nice and I have a suggestion for you guy that if you want to get more knowledge about real estate, you can check my site:

  13. Thank you for this information.
    According to the new regime of CEA (Council for Estate Agencies), it has been remarked that a particular property agent needs to qualify for the RES examination that would ensure him/her to be qualified and execute the task of a real estate agency as well as professionally competent to handle every sort of real estate work effectively. RES course is the mandatory preparative course that needs to be attended before appearing for the RES examination. This is the path that would help one to become a full-fledged salesperson in the real estate agency of your choice.

  14. Allentown, Pennsylvania Real Estate Solutions For Sellers, Investment Property Buyers, And Investors. We buy, fix, and sell Pennsylvania real estate to improve our communities and help local investors participate in the real estate market right alongside us.sell house quickly allentown Pennsylvania

  15. To help protect buyers from misrepresented square footage the Real Estate Council of Alberta recently announced new guidelines regarding home measurement in the province.Calgary Real Estate

  16. If you have a property to sell, we recommend finding a buyer for your existing property before starting your search. Early preparation is key to a successful sale – we can help you establish its market value and find you a buyer.Meriden Houses For Sale

  17. Iranian-Realtor.com is the Persian leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration, and knowledge around the place they call home.Persian Realtor

  18. I really appreciate the kind of topics you post here. Thanks for sharing us a great information that is actually helpful. Good day! immobilienmakler mülheim an der ruhr

  19. Great Information sharing .. I am very happy to read this article .. thanks for giving us go through info.Fantastic nice. I appreciate this post. immobilienmakler mülheim

  20. So awesome focus! Yeah, at the time of buying any home or property there need many types of cost though we think for only one kind of payment. I got the whole content you pointed here with some authentic hidden cost ideas and explanation. Really brilliant and helpful. Anyway, for real estate legal help I would recommend real estate attorneys if you guys are in Sacramento, CA area. May be some guys here find it very interesting.

  21. Very authentic and useful issue you disclosed here for us. Buying home sometime may not hassle-free and in expected cost. Though many real estate companies offer prices without any hidden cost, after coming to the agreement it is seen that there are actually many additional costs have to pay. It's really a pain and tiresome matter. So, before making any deal with you must have to learn more about the company you are going to deal with. Anyway, I read through your precious post and got some important points to pick up to my home buying knowledge. This is really great. Ok, right this moment I can bring about Guelph realtor that can really help you much than your expectation.

  22. Extremely conducive exposure. I appreciate such kind of post as most of the property owners do not aware such kind of hidden cost. I was so much pleased to dig the deeper the details you clarified. Yearly property tax, 2% of the assessed value of the home as real property tax and many other cost you disclosed will surely be helpful for the readers from any region of the world as it hidden cost can be implemented anywhere by the local or national authorities and also real estate business ventures. Thank you very much for this wonderful focus. Well, are you guys live in Edmonton area? Alright, here's Roark Properties service to fix any type of property buying issue.

  23. Very useful content you gifted to your readers and fans. Yeah, it's true there are lot of real estate companies that attract customers with attractive offers. But very few of us try to find out the hidden cost they charged. Trainling to the end of your informative details I really found some points to pick into my poor knowledge. The real property tax, transfer tax, registration fees, value added tax and other points you focused look really helpful. Thanks a lot for sharing such well-valued issue. Anyway, for the real estate business owners in UK, I can recommend real estate classified sites in UK to promote their business and even for any property buyer can make a good deal just dropping their demand.


Join the Discussion!