Buying Land In The Philippines Part 8: Converting Land Use Type

Buying Land In The Philippines Part 8: Converting Land Use Type

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Reclassification can be done through the Municipal Assessor. It is important to be thoughtful about how reclassification, because different land use types are assessed at different tax rates. 

It may be cheaper to make only part of your land residential and the remainder some other type, like orchard etc.... 

Our lot was originally classified as coco land. The reclassification that we went with was 30% residential and 70% orchard. If we had classified our lot as 100% residential the taxes would have been much higher, so we only made the part where the house actually sits residential. 

Since most of the coconut trees had been cut down leaving only a few of them with other assorted fruit bearing trees we reclassified the remaining part as orchard, which is taxed at a lower rate than coco land and much lower than residential.

If we pay our taxes by December 31 we get a 20% discount. The discount is reduced each month until March 1. From March 1-31 the tax is just the regular rate. If you pay after March 31, the there is a 2% penalty. That monthly penalty will be added for up to 36 months an this goes on for every year the tax is not paid.

Davao provides a slightly different scheme on taxes. Davao City will give you the 20% discount if you pay the taxes in full by March 31.

Every municipality has its own unique tax scheme so check with your local assessor's office to find out the specific details for your municipality.

Points to keep in mind:
  • If you do not pay your taxes that you may be in danger of losing your land.
  • In some cases there is tax amnesty for delinquent accounts.
  • Be sure that all of the details on the tax declaration are complete and correct.

Buying Land In The Philippines Part 7: Land With No Title

Buying Land In The Philippines Part 7: Land With No Title

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If you have land that is not titled, then you need to contact DENR. DENR may perform a land survey. Understand that the information in this article is generic and some of the items herein may not apply to your specific case.
  • The land in question must be zoned residential. 
  • There can be no dispute or conflict as to who is the rightful owner.
  • Cost may vary for survey and titling process.
  • DENR in some locations may not have adequate personnel to perform the survey right away or at all.
  • The entire process can take anywhere from three months to one year (be proactive).
  • When the process is complete the owner shall receive an Original Certificate of Title (OCT).

Again, this is for land that has no title. If your land has an OCT or TCT already, then this does not apply to you. 

Potential buyers may encounter a seller who says they have no title. Just because a "seller" says they have no title to a plot of land does not necessarily mean that no title exists for that lot. There may be a title, but the "seller" just does not have a copy of it. They may not know a title exists or they may be concealing the truth about it.

If I was looking for land and the "seller" told me "I have no title" I would thank them for their time and be on my way. 

It is absolutely imperative for you to know whether a title exists. You must be certain of the boundaries of the land. You must check with the municipal assessor to see the tax declaration. You must check with LMB to know if there is a map. You must check with LRA to know if there is a title. 

If there is a title when you were told there was not one, then that is bad news. But if you confirm that there really is no title, then that is not good news. You just did a lot of foot work only to find out that you have a lot more footwork and expense ahead of you. Why would anyone want to pursue buying land without a title? I can understand if it is land that you have some personal connection to, but otherwise I would have to say that there are a lot of fish in the sea and plenty of them have a title already. Just my two pesos.