The following are some of the most commonly encountered questions on Land Title and/or Land ownership in the Philippines.

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Should you buy from a socialized housing or one in a high-end development? Well, you already know that it depends on many factors including affordability, accessibility, your personal preferences or the needs of your family.

How much is a typical low cost house? How are houses categorized and what is the price range of houses on each category? This article will attempt to answer such questions.

As per Memorandum Circular No. 04 series of 2006, the Housing and Urban Development Coordinating Council (HUDCC) has categorized housing units based on the selling price of the units. Below are the categories, the corresponding price range and a brief description of each.

SOCIALIZED HOUSING

Price Range : P 300,000 or lower
Lot Area : 30 sqm to 50 sqm
Floor Area : 18 sqm to 30 sqm

These are the lowest priced housing units in the category. Typically, the houses are row type with no amenities. The roads are narrow, and in many cases, no sidewalks.

LOW COST LEVEL 1

Price Range : From P 300,000 To P 1,250,000
Lot Area : 50 sqm to 100 sqm
Floor Area : 35 sqm to 55 sqm

Houses are usually bare or box type with only one toilet and bath, and the home interiors are left for the buyer to improve. Sometimes the community would have a few amenities.

LOW COST LEVEL 2

Price Range : From P 1,250,000 to P 3,000,000
Lot Area : 100 sqm to 150 sqm
Floor Area : 80 sqm to 120 sqm

The houses in this category are finished type with a minimum of 2 bedrooms. You will usually find a swimming pool or clubhouse as standard amenities for this type of community.

MEDIUM COST

Price Range : From P 3,000,000 to P 4,000,000
Lot Area : minimum of 100 sqm
Floor Area : minimum of 70 sqm

This type of project has improved amenities like guard house, entrance gate perimeter fence, club house and play courts plus the usual swimming pool. Houses are of much better quality than the previous categories.

OPEN MARKET

Price Range : From P 4,000,000 and above

This development is sometimes referred to as High-end. It has all the amenities in the MEDIUM COST project and even better ones. The buyers in this category are mostly educated, have money and know what they are buying. In many cases, the buyers are the ones who hire their own architects to design the house according to their preferences.

If you are clueless about home financing, as many home buyers are, here are some tips that you can use to help you determine how much you can afford to finance your home purchase.

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Each type of financing scheme has its own advantages and disadvantages. To determine which one is appropriate to you, it is best to start looking at your own budget and financial capabilities. Some financial institutions (banks, credit unions, money lenders, etc) will require income documents from your and/or your co-borrower to determine which one applies to you.

Listed below are the characteristics of each type of payment scheme.

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Definition of Terms

Value is the utility or attribute of a property to satisfy human want or command other properties in exchange. Elements of value:

• Scarcity. Limited supply of desired property increases its value.
• Utility. The power of a good to render a service or fill a need.
• Demand. The desire of a good or service; implemented by purchasing power.

Cost is the combination of the factors of production to produce improvement or development. It may or may not be equal to value depending on whether costs are warranted or wisely made. Cost is historical and is a measure of things that happened in the past.

Price is an expression of an individual’s estimate of value in terms of money. It may equal, exceed or be less than the value depending on whether the buyer is fully informed, acts under duress, or buys on favorable or unfavorable financing terms.

Economic Principles of Value

1. Principle of highest and best use states that the value of a property is directly related to the use of that property; it is the reasonably probable use that produces the highest property value. The current use of a property may or may not yield its highest value.
2. Principle of substitution. In concept, every good or service has a substitute or alternative. This principle states that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution.
3. Principle of conformity. The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.
4. Principle of progression. The value of a property of lesser quality will tend to be increased by being in association with a properties of higher quality in the same area.
5. Principle of regression states that a property of higher quality in a neighborhood of properties of lower quality seeks the value level of the properties of lower quality.
6. Principle of increasing and diminishing returns. “When one of the factors of production is held fixed in supply, successive additions of the other factors will lead to an increase in returns up to a point, but beyond this point returns will diminish” Any student of economics is aware of that. It was first written by Anne Robert Jacques Turgot. Applied to real estate, it means that as successively greater increments of land, capital, management or labor are applied to a property a greater yield is produced until a maximum is reached and there is a decline.

1. Land must be used for residential or business purposes only.
2. Land acquisition may be through sale, donation, tax sale, foreclosure, or execution sale.
3. If the land is for residential purpose, a maximum of 1,000 sq meters of urban land or one (1) hectare of rural land is allowed.
4. If the land is for business purpose, a maximum of 5,000 sq meters of urban land or three (3) hectares of rural land is allowed.
5. A maximum of two (2) lots not exceeding the maximum limit in total combined area is allowed. Lots must be located in different cities or municipalities.
6. Either rural or urban lots, but not both, can be acquired
7. Either one or both spouses may avail of this privilege, but the above limits must be observed.

Holders of Dual Citizenships are allowed full rights of possession of real estate in the Philippines.

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A person who owns a real property also has the Bundle of Rights over that property, which includes the following:

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To clear things up, here is a brief lesson on real estate etymology:

The term “real estate” came from the French “royale” and the Latin “status”. In other words, “real estate” was originally equivalent to “royal estate.” The “royal” usually refers to the head of state; the state being the ultimate owner of the land over which it reigns.

“Sang real” means “royal blood.”

“El Camino Real” means “The Royal Road.”

Get it?

Now that you already know, you can tell your friends that real estate has nothing to do with reality whatsoever.

In the meantime, bear in mind that the State, and in this context The Philippine Government, is the ultimate owner over all real estate in the Philippines. Try not to pay your Real Property Taxes and you will see what that means.

Some move to save, others to spend. Some move to escape the heat back home, others to have more of it. Some move to be close to their families, others to be far away from them. Some move temporarily, others permanently.

Whatever your reasons for moving to the Philippines, wouldn’t it be nice to learn something about the place you want to live in?

The following are some of the most valuable tips you will ever have.

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