I Bought a Condo in Manila for $150,000 - Here's What the Contracts Don't Tell You

I closed on a condo unit in Manila for about $150,000 (roughly ₱8–9 million depending on the exchange rate). If you've never gone through a condo purchase in the Philippines, the contract stacks look impressive - but they hide stuff that can add thousands to your cost and headaches you didn't budget for. Below I'll walk you through the real things the contract or salesperson rarely spell out clearly, and practical steps to avoid trouble.

What $150,000 gets you in Manila

For reference, a $150K purchase in Metro Manila commonly lands you a mid-range 1‑bed or small 2‑bed in an urban development - sometimes pre-selling, sometimes ready-for-occupancy. But whether brand-new or resale, the listed price is rarely the full story.

Hidden costs and taxes (the big money parts)

Many people focus only on the downpayment and monthly loan. The contract side rarely emphasizes these line items enough.

• Documentary Stamp Tax (DST): 1.5% of the selling price or zonal value, whichever is higher. For a $150K sale (~₱8.4M), this can be well over ₱100,000.
• Transfer Tax (Local Government): Usually 0.5%–0.75% of selling price - paid to the city/municipality. Expect tens of thousands.
• Registration Fees and Notarial Fees: LRA and notary costs to register the transfer and issue the Condominium Certificate of Title. These add a few tens of thousands depending on scales.
• Capital Gains Tax (6%): Technically a seller's tax, but sellers sometimes negotiate or shift costs through netting or price adjustments. Always confirm who pays.
• Real Property Taxes: There's proration for the year - you might reimburse the seller for the portion they already paid.
• Bank/Loan Fees: If you use bank financing, expect appraisal fees, processing fees, mortgage redemption registration, mortgage cancellation fees - spoken of briefly in the loan binder, but they add up.
• Value-Added Tax (12%): Some developers charge VAT on top of the unit price if the project is VAT-registered. That can be a shock on pre-selling deals.

Bottom line: add roughly 3%–6%+ of the purchase price for taxes and registration (buyer's share), and expect additional bank and miscellaneous fees. Always ask for a "cash-out estimate" from the bank or lawyer before signing.

Reservation and "non-refundable" clauses

Reservation fees are usually small (₱20,000–₱100,000) and often non-refundable. Contracts often include:

• Strict forfeiture clauses if you default on the downpayment schedule.
• Long developer leeway for occupancy/turnover dates with limited remedies if they delay. Pre-selling developers sometimes give vague move-in windows; check the Turnover Date and remedies explicitly.

If your life changes (job loss, migration), Maceda Law protects installment buyers to an extent - but its protection applies mainly to installment contracts and has conditions. Don't assume "refundable" unless the contract says so.

Contract to Sell vs. Deed of Absolute Sale

Many condo purchases start with a "Contract to Sell" (CTS) while the developer retains title until full payment. A CTS can mean:

• The buyer does not immediately get the title.
• Developer may encumber the property (mortgage) while selling, which adds risk.
• Only after full payment will you get the Deed of Absolute Sale and the registered Condominium Certificate of Title.

Tip: If you're using a bank loan, ensure the bank will process the transfer and release the title properly. Get timelines in writing.

Measurement, floor area and "built-up" tricks

Contracts may list "approximate" floor area. Developers sometimes use "floor area" or "saleable area" that includes a share of common areas. Discrepancies appear at turnover:

• Check the measurement shown in the Deed of Absolute Sale versus the actual unit.
• In tight units, a few square meters can change value significantly.
• Ask for a final official floor area certificate and include remedies in the contract (prorated refund or price adjustment if short).

Bylaws, House Rules, and Unit Restrictions

The condo's bylaws (by the Condominium Corporation) matter. The developer's pre-selling documents or sample bylaws often hide practical constraints:

• Visitor rules, subletting policies, and short-term rental rules (e.g., AirBnB may be restricted).
• Pet policies: many condos ban or restrict pets.
• Renovation rules and approved contractors - expect approvals and possible penalties for unauthorized work.
• Parking slots are often not included and sold separately. The fine print can require you to buy a slot if you want one.

Before signing, ask for the sample House Rules and the Draft By-Laws. These will determine day-to-day life.

Association dues, sinking fund & special assessments

Monthly association dues pay for maintenance. What the contract underplays:

• Dues vary by developer and amenities - expect anywhere from a few thousand to tens of thousands per month depending on size and facilities.
• Sinking fund: usually a one-time upfront fund (usually 1–3 months of dues or a fixed rate). It's for future major repairs.
• Special assessments: If the building needs major repairs or upgrades, a special assessment can be passed to owners. Contracts usually allow the condo corporation to levy assessments - they rarely give caps.

Factor recurring dues into your monthly budget. Don't just look at the loan amortization.

Turnover condition and defects liability

Developer warranties exist but may be limited:

• Check the turnover inspection (the punch list): poor finishes, water leaks, electrical issues can be common.
• Developers often include a 1-year to multiple-year defects liability for non-structural defects, but the scope varies.
• For structural issues, pursue remedies under the Condominium Act and developer warranties; this can be slow.

Document everything during turnover and insist on a signed punch-list with deadlines.

Title problems and encumbrances

Always confirm the title status at the Land Registration Authority (LRA):

• Is the unit's title clean and released? Or is there a mortgage on it?
• With developer sales, the title to the lot and common areas usually remains with the developer until full turnover; ensure you'll get the Condominium Certificate of Title after full payment.
• Ask for a certified true copy of the title and a "no encumbrance" certificate where applicable.

A lawyer or licensed broker can help verify title issues.

Resale and capital gains considerations

If you plan to resell later:

• Capital Gains Tax (6%) and Documentary Stamp Tax apply.
• Sellers or buyers can negotiate who pays the costs - don't assume the other side will cover everything.
• If you financed the purchase, check the bank's pre-termination penalties or mortgage cancellation fees if you plan to pay off early.

Practical negotiation tips and checklist before signing

• Get an itemized list of all closing costs in writing: taxes, transfer fees, registration, notarial, bank fees, association initial dues, parking.
• Confirm VAT status of the unit and whether the price already includes VAT.
• Ask for a draft Deed of Absolute Sale and sample By-Laws/House Rules before reservation.
• Insist on a clear turnover schedule and remedies for delay.
• Have a lawyer review the Contract to Sell / Deed of Sale - concentrate on forfeiture, remedies, and who pays which taxes.
• Do a pre-turnover inspection with photos and a signed punch-list.
• If using bank financing, get the bank's full list of fees and a net-proceeds schedule.

Final practical numbers (rough estimate for a $150K purchase)

(These are illustrative-get exact quotes.)

• DST (1.5%) ≈ ₱120,000–₱140,000
• Transfer tax (0.5%) ≈ ₱40,000
• Registration & notarial ≈ ₱15,000–₱40,000
• Bank/appraisal/processing ≈ ₱20,000–₱60,000
• Association dues monthly ≈ ₱3,000–₱10,000+

So expect several hundred thousand pesos in additional immediate costs, and ongoing monthly fees to factor into your affordability.

Final practical advice

Buying a Manila condo can be a great investment and lifestyle move, but don't let the glossy brochure blindside you. Always read the full contract, get an itemized closing cost estimate, verify titles with the LRA, and have a lawyer or seasoned broker review paperwork. The best deals are those where both buyer and developer are transparent about costs, turnover timing, and what happens when things don't go as planned.

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