Owning a home is an exciting responsibility, which should be taken seriously even if you’re an OFW living thousands of miles away. Monthly dues, real estate tax, and mortgage are just some of the things you will need to handle and pay for, even from afar.
Owning a home is both exciting and draining, especially when you’re far away from your motherland. On one hand, you know you have a property waiting for you once you come back to the Philippines to retire. On the other hand, taking care of your homeowner responsibilities as an overseas Filipino worker (OFW) can be quite challenging. However, as long as you keep a schedule and maybe have someone near the property to help you out, you should be fine.
Here is a list of some of the most important homeowner responsibilities for an OFW:
Monthly Association Dues
Sometimes simply referred to as monthly dues or association dues, this is the fee that homeowners associations (HOA) collect from their members, whether in gated communities, residential condominiums, or housing subdivisions. It is actually under a special law, Republic Act (RA) No. 9904, “Magna Carta for Homeowners and Homeowners’ Associations.”
Depending on the HOA’s bylaws, these dues may include not just association dues but also membership fees, beneficial user dues, and even other special assessments. The total amount is usually computed at a rate of per square meter, so not everyone would pay the same amount. Instead, it is based on the size of their property including both the total lot and floor area.
The aforementioned Magna Carta allows a paying member to enjoy rights such as the availment of these community services, common areas, facilities and the like, among other rights. Sometimes, a non-paying member will be deemed delinquent, so it is important to pay off these dues even if you’re an OFW and living abroad for long periods of time. Often, HOAs allow advanced bulk payments or post-dated checks so you don’t have to worry about paying them monthly for a set period.
Real Estate Property Tax
As with most things people pay for, owning a home means needing to pay real property tax (RPT). This is a yearly fee imposed on all types of real estate – buildings, land, and even improvements and machinery, per Title II of Republic Act No. 7160 otherwise known as the “Local Government Code.”
Homeowners, whether based locally or abroad because they are an OFW, absolutely have to pay this tax every year. For properties in cities and municipalities within Metro Manila, the RPT rate is 2% of the assessed value (a fair market value multiplied by assessment level) of the property, while it is at 1% for provinces.
This RPT can be paid in full annually (on or before January 31), which usually serves OFWs better since there are less time and effort involved, or quarterly (on or before the end of each quarter – March 31, June 30, September 30, and December 31). Additionally, settling your taxes in advance will allow you to enjoy a discount. Not paying RPT on time will result in penalties, even if off by just one day. The interest rate is 2% per month up to 72% (36 months). Whether based locally or as an OFW, you pay the RPT through the Treasurer’s Office of the Local Government Unit (LGU).
Mortgage (Housing Loan)
More often than not, a homeowner will probably make use of a housing loan, usually from either a bank or from Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno (Pag-IBIG). For the latter, it is through their Home Development Mutual Fund (HDMF) which is only one of the many benefits one can get from Pag-IBIG.
In fact, as of May 2015, Pag-IBIG Fund housing loan borrowers can get multiple housing loans under the condition that the total amount does not exceed Php 6 million and that they have proof of their financial capability to pay the said amount. This is helpful, for example, if you want to buy two adjacent vacant lots in order to build one home on them. Or, if you already availed a loan and want to acquire additional property, you can still get a subsequent loan as long as it’s within the allowed parameters.
Now, as an OFW homeowner, you’re still obligated to pay out this mortgage or housing loan (or loans) even when you’re living away from the Philippines. Members can pay their monthly Pag-IBIG contributions conveniently through credit cards (MasterCard or Visa) or even Globe’s GCASH. If you still cannot do this yourself, authorize someone does it on your behalf. The billing statement is available online as well from the Pag-IBIG website, along with other services like getting a member’s identification number (MID).
Whether you are renting out your property while abroad or having a caretaker or other family members living in it while you are away, make sure all the previously mentioned responsibilities are always taken care of. Additionally, consider things like regularly checking for pipe leaks, roof leaks, repairs and maintenance needed, and any other things you need to pay for or need to keep in top shape. And of course, make sure all utilities are paid whether someone is living there or not, and this includes electricity and water, and for some, it may include landline phone, cable, and internet bills as well.
Owning a home is a lifelong responsibility, and one should always make sure all payments and maintenance steps are followed through.
Sources: Law Philippine, Senate.gov.ph, and KMC Savills