There’s more to buying a house than meets the eye. Unlike your regular purchases, real estate requires payments for incidental matters such as taxes to government and a commission to your real estate agent. Here are some costs to take note of when buying a home:
Taxes and other Fees
Generally speaking, homebuyers are required to pay for the notary fee, local transfer tax, and the capital gains tax. Apart from certain transactions involving low-cost housing or property not primarily held for sale or lease to customers in the ordinary course of business, sale of real estate are exempt from Value Added Tax.
Commission of the Real Estate Agent
Commissions paid to real estate agents comprise of an amount equal to 3-5% of the purchase price of the real estate. This is customary in this jurisdiction as it represents the hard work undertaken by the agent to facilitate such a transaction. Of course, this rate may be modified according to the agreement entered into by the parties.
Registration of the Real Property
There is also a registration fee required to be paid by the buyer at a rate of 1% of the purchase price of the real property. Upon registration, the registry of deeds of the locality where the property is located will issue a title for the buyer, and the same shall constitute an indefeasible proof of ownership under the Land Registration Decree – Torrens Title system.