Hidden Costs When Buying a Condo in Cebu

Buying a condominium in Cebu can be one of the most exciting financial decisions, especially for investors, expats, and locals who want to live in a modern and convenient environment. Cebu’s condo market is thriving, with projects in prime locations such as IT Park, Lahug, Mandaue, and near major shopping centers like Ayala Center and SM Seaside.

However, while most buyers focus on the purchase price per square meter or the down payment scheme, there are many hidden costs that often surprise new condo owners. These expenses, if not prepared for, can affect your budget and even your investment returns.

In this article, we’ll break down the hidden costs when buying a condo in Cebu so you know exactly what to expect beyond the unit price.

1. Taxes and Government Fees

a. Documentary Stamp Tax (DST)

The Documentary Stamp Tax is imposed by the Bureau of Internal Revenue (BIR) at 1.5% of the selling price or zonal value, whichever is higher. This is one of the biggest extra costs and is often overlooked during the buying process.

b. Transfer Tax

When you transfer ownership of the condo unit, you must pay the Transfer Tax, which is typically 0.5% to 0.75% of the selling price, depending on the local government where the property is located.

c. Registration Fee

To register the property under your name at the Registry of Deeds, you must pay a Registration Fee. This usually amounts to 0.25% of the selling price, plus miscellaneous charges.

d. Capital Gains Tax (CGT) or Creditable Withholding Tax (CWT)

If you’re buying from an individual seller rather than a developer, the seller is supposed to shoulder the Capital Gains Tax (6%). However, in practice, some sellers negotiate to share this cost with the buyer. When buying from developers, they may instead charge the Creditable Withholding Tax (CWT), which can indirectly add to the buyer’s expenses.

Tip: Always clarify with your broker or developer who shoulders each of these taxes to avoid surprises.

2. Association Dues and Monthly Fees

Once you own the condo, you’ll need to pay association dues (also called condo fees). These cover building maintenance, security, common area electricity, garbage disposal, and amenities upkeep (like swimming pools and gyms).

• Typical rate: ₱70 to ₱120 per sqm per month

• Example: For a 40 sqm condo, monthly dues can range from ₱2,800 to ₱4,800.

These fees increase over time as operational costs rise, so long-term owners should factor in potential hikes.

3. Move-In Fees and Utility Connection

Many developers require a move-in fee, which can cover elevator use, manpower assistance, and temporary permits. This fee can range from ₱5,000 to ₱20,000, depending on the building.

You’ll also need to pay for utility connections such as water, electricity (VECO), and internet. Installation deposits and connection fees can add another ₱5,000 to ₱15,000.

4. Parking Space Costs

Not all condos in Cebu come with parking slots. In fact, parking is often sold separately.

• Price range: ₱800,000 to ₱1.5M for a single parking slot in prime areas like Cebu IT Park or near Ayala Center.

• Monthly dues: Parking also comes with its own association dues, adding to your recurring expenses.

If you own a car, failing to account for this cost could disrupt your budget.

5. Furnishing and Interior Setup

Developers usually deliver units as bare or semi-furnished. Bare units may only have cement floors, painted walls, and a bathroom. Semi-furnished units might include basic fixtures like kitchen counters and cabinets.

To make your condo livable, you’ll likely spend on:

• Appliances (aircon, refrigerator, stove)

• Furniture (sofa, bed, dining set)

• Interior design (lighting, partitions, décor)

Depending on your taste, the furnishing cost can range from ₱200,000 for basic setups to ₱1M+ for luxury interiors.

6. Value-Added Tax (VAT)

If the selling price of the condo unit is above ₱3.6M, you will need to pay 12% VAT (unless exempt under specific government incentives).

This is a huge additional cost that many buyers overlook. For instance, a ₱5M unit could have an extra ₱600,000 in VAT.

7. Mortgage and Loan-Related Expenses

If you are financing your condo through a bank loan, you will face several hidden costs:

• Appraisal Fee: ₱3,000 to ₱5,000

• Processing Fee: ₱5,000 to ₱10,000

• Mortgage Registration Fee

• Fire Insurance and Mortgage Redemption Insurance (MRI) – required by banks, adding thousands per year

These costs pile up and should be factored into your financial plan.

8. Resale and Rental-Related Costs

If you plan to rent out or sell your condo in the future, you should be aware of these:

• Broker’s Commission: Usually 3% to 5% of selling price or monthly rent.

• Property Management Fees: If you hire a company to manage your rental, expect 10% to 20% of rental income.

• Withholding Tax on Rentals: For rental income, you may be required to pay 5% to 10% withholding tax depending on your setup.

9. Special Assessments

Condo corporations sometimes impose special assessments for major repairs or upgrades (e.g., repainting the entire building, upgrading elevators). These are one-time large payments that can range from ₱20,000 to ₱100,000+ depending on the project.

Owners have no choice but to contribute, so it’s an unpredictable but real cost.

10. Currency Exchange and Foreigner Restrictions

For foreign buyers, another hidden cost can be related to currency exchange rates and remittance fees. Sending money from abroad to pay for the condo can incur charges of 1% to 3%, especially if not managed strategically.

Also, foreigners are restricted from buying land but can own condo units. However, only 40% of units in a building can be foreign-owned. If this quota is full, you may have to pay a premium for a unit still available to foreigners.

11. Maintenance and Repairs

While association dues cover common areas, the interior of your unit is your responsibility. Over the years, you’ll need to budget for:

• Aircon cleaning and repair

• Plumbing issues

• Appliance replacement

These costs may not be huge individually, but they accumulate over time.

Conclusion

When buying a condo in Cebu, the sticker price is just the beginning. Beyond the per-square-meter cost, buyers must prepare for:

• Government taxes and fees (DST, Transfer Tax, VAT)

• Monthly association dues

• Parking costs

• Furnishing expenses

• Mortgage-related charges

• Special assessments and long-term maintenance

By factoring in these hidden costs, you can make smarter financial decisions and avoid unpleasant surprises. Whether you’re purchasing for personal use or investment, being aware of the true cost of ownership will protect your budget and maximize your returns.