Rent or Buy a House in Philippines...or Thailand?

Question

I understand that in both Philippines & Thailand will not allow me to own land, only own the house which is fine....BUT.... then there is property tax to take into consideration.

Philippines: (GOOD POINTS)

1. FOOD would be cheapest in

2. Renting/Buying PROPERTY would also be lowest.

Philippines: (BAD POINTS)

1. Property Tax (OWNING A HOUSE)

I believe what I read said that property tax is based on the value of your home, and you are taxed annually. So with a house worth about $100,000usd, expect to pay 25% of that amount per year? $25,000usd/year??? (CRAZY!)

Bottom line is If I choose to go to the PH I will have to consider pretty much renting If I dont want to pay property tax that is? Or if im mistaken how much is it really?

Thailand would be the same as Philippines except that its about (40-50% more expensive to live there) than PH. Upside to owning property is that they base it on your annual income? (property tax is 12.5%)

Many ppl say renting is the way to go rather than to buy a house, but then I p**s away my money in away by renting because in the end I have no assets.

So...do I give up my dream of owning a house? Because I cant fathom paying more than $2000/year in property taxes. Thats just like renting in a way..only this way you get to say you own it...and you can make any types of changes you want.

So if I wanna own a house and pay the least amount of property tax Thailand is the way to go? If I want to rent a house Philippines?

What do you think? Am I mistaken on the % of taxes? Advice? Should I choose someplace else entirely?

I am absolutely though moving to someplace in asia wherever it may be.

Answer 1

Rent, don't buy. It's not just cost-effective to buy a property. It's a lot easier to buy in the Philippines than selling. Rents are more expensive in certain areas in Manila (i.e., Makati). You can rent a nice semi-furnished condo in Metro Manila for around 10K-13K. Put the rest of your money in an interest-paying account instead. Yeah, the capital gains on the house is a real killer. Besides, renting on short-term (6 mos.) will give you a feel of the area, and you can always move somewhere after 6 mos. If you buy a property, you're pretty much stuck with it. Unlike the US, you can't write off the interest payments and property taxes if you're filing income taxes there. If the ratio of the monthly rent is 150 to 1 or higher, then you're better off renting. For example, if you're renting PHP 12,000 a month on a property which has a market value of PHP 2Million, then that's a ratio of 166 to 1 = good ratio if you're a renter, not so good if you're a landlord.

Answer 2

Renting would be the best on both countries. The rent is way cheaper and not even comparable to a mortgage so you are not really wasting your money. Once you buy a house, it becomes an additional responsibility for you financially and you cannot just move anywhere you want. The main thing to do is look around first for a place that has all that you wanted before renting it so you wouldn't hate living in there.. Buying a house can be justified though if you already have a spouse and at least 2 kids.. If it was only you or your spouse with just 1 child then I would advise to wait. Remember that you still have to buy a car or any sort of transportation to get around..

Your principle of owning a house just to say that you owe it and to have the ability to change anything on it probably needs to be changed.. Although it is good to own your own property so you can do whatever you want with it, owning it on a foreign soil might not be a good idea because it will not only drain on your resources but it will slow you down if you decided later on to travel around.. It would also not make sense if you only own a house and not the land.. You can be deemed as a squatter 20 years down the road when laws change again or when a scammer tries to get the land your house is in..

I really suggest renting 1st for the 1st few years and then apply for Philippine citizenship so that you could have the right to fully purchase a house and lot.. Also, try to live in different places in the Philippines just to feel where you think you can best adjust to and be comfortable with.. A condominium is probably okay if you really want to buy one without being a Filipino citizen yet.. At least, your money will go further in the Philippines and you can enjoy life better without the hassle of any major financial responsibility yet..

Answer 3

If you only need / want the place for 20 years, just rent and don't worry about all of the other problems.  It is such an American thing to want to OWN stuff.  Just pay as you go dude - if you "own" you have no more assuredness that you can stay there forever than if you rent.

Answer 4

I don't know where you got this idea that in the Philippines you pay 25% of the value of the house in annual taxes. Truth is property tax here is rediculously low and almost laughable. Our P2 million home in Iloilo city has an annual property tax of P10,000 or $ 240.

If your renting a house that is the landlords responsibility not the renters. Same for homeowners assn fees if you live in a nice gated/guarded subdivision.

The only residence a foreigner can own here in the Philippines is a condo period!

Leasing land on a 25x2 renewable lease and then building a house is a very bad idea. There is nothing to stop the landlord from cancelling the lease and taking possesion of the improvements (house) you just built on it.

The other thing to consider is visa requirements. Here you can stay on a tourist visa up to 16 months in 2 month increments.

If you  wish to get the SSRV (retirement) visa. The amount is only $10,000 deposit and your monthly income needs only be $800 a month. Compared to Thailand which is over double that amount for the ssrv visa.

Another plus is the Philippines is an english speaking country. If you live anywhere near evan a small city you won't need to learn a second language.

Here in Iloilo City rent for a nice 3 br 2 ba house in a gated/guarded subdivision is P20,000 a month plus utils. In the gated subdivisions catv and dsl are availible. 30 min plus outside the city rents are about 20% cheaper, but dsl and catv is very limited.

Renting is a better option to start. Long term leasing is also an option here.